Don't. Waste. Time.


Stuff we startups do that doesn't delight users:

Office space
Launch parties
Health insurance plans
Salary negotiations
Founder equity splits
Series F stock
Office Food
Team-building activities
CRM systems
Bookkeeping
Head count
Working in SOMA
Convertible debt caps
Valuations
TechCrunch
Karma scores
ISOs
Powerpoint
Business Cards
Banks
Lawyers
Desks
1099s
Bug Trackers
Agile Processes
Advisory Boards
Hiring
Cap Tables
Payroll
Meetups
Meetings


Of course, much of this stuff still needs to get done.  At some point.  And some of it really is important to the process that eventually creates delight for users.  But none of it directly delights users.  They're all inputs.  None of it is product.  When you build a great product, one that delights users and achieves product-market fit, you'll have lots of time to work on all these things and optimize them to your heart's content.  When your product is not even built yet, none of this stuff matters.  But your startup, in the pre-product phase, is basically a ticking time bomb.  The only thing that can prevent it from exploding is user delight.  User delight attracts funding, enhances morale, builds determination, earns revenue...Until you get to user delight, you're always at risk of running out of money or, much more likely, losing a key engineer to something more interesting.  Time is your most precious resource.

Don't. Waste. Time.

Paul Graham mentors startups to avoid these time sinks: "The most dangerous way to lose time is not to spend it having fun, but to spend it doing fake work."




Some strategies for not wasting time on fake work


Delay it

Anything that can be postponed should be.  If your startup never makes money, you won't care about setting up that bookkeeping system.  In fact, you'll wish you had that 10 hours back to talk to more users.  It's not even the hours that matter though, it's the mental focus.  You want your only two top-of-mind subjects to be your product and your users.  Just about everything can be fixed later.

Fix things once they break

The best bookkeeping solution is a shoebox.  I swear by it.  At FlightCaster, we didn't leave our shoebox system until we had acquisition interest.  When they asked for a balance sheet, we paid a bookkeeper and CFO to quickly fix everything.  A couple thousand dollars later, everything was totally organized.  


Solve problems quickly, even if only partially

When you incorporate, there will be 347 options you can think about.  Founder provisions, stock structures, by-laws, etc.  Don't worry about them.  Just solve this task as fast as possible with the simple defaults.  In general, just try to do whatever a bunch of other high quality startups have done.  Don't even bother to understand the options until later.  When you're ready to raise an equity round, take a few days with your advisors and lawyers and amend all your documents to get it right.  The only thing that can't be changed later is the 83B--get that done correctly within 30 days of incorporation.


Outsource all over the place

I've purchased health care plans so many times now I know exactly what I'm looking for.  I still use an insurance broker though.  I have Raj from Expert Quote take care of everything for me.  Yeah, he gets a commission, but if it saves me a bunch of annoying calls with Anthem, then it's worth it.  It's one less thing for me to think about.


Later on, hire a good part-time CFO

A part time CFO will do all your administrative tasks for you, either themselves or by hiring someone to do it for them.  It's awesome.  Yeah, you probably think you want to learn all this stuff in order to be a better informed founder, but seriously, you don't.  Whether you understand, at this point in your career, how city and state taxes work is simply not important.  Give up some control, stay focused on product and users.


Don't obsess over vanity stuff

We still haven't made business cards for 42Floors.  Why?  Because we just haven't gotten around to it yet.  I prefer Bump anyways.  Or I use old business cards. Or I just grab the other person's card  and snap a photo of it using CardMunch.


There is a good time to learn all this stuff by the way.  When you're not actively doing a startup, go learn this stuff.  Read these books.  Make it a casual hobby.  Just don't think that getting good at this stuff will make you significantly more likely to build a great product. 

If you just HAVE to work on any of this stuff, click on any of the items in my laundry list at the top.  Each link is a snippet of help that should help you solve your problem quickly, though probably not perfectly.

That should be good enough.  For now.

 

 

 

Find discussion of this post on Hacker News

***
 
 

And please come check out my new startup, 42Floors

We're fixing commercial real estate.  Forever.

Sign-up to learn more at 42floors.comand like us on Facebook, and follow us on AngelList, and follow us on Twitter.

 

******************
I'm Jason Freedman.  
I've got a sweet-ass new company: 42Floors.  
Previously, I did FlightCaster.
I welcome connections on Linkedin,  FacebookAngelList and Twitter.

 

 

We're going to the mats.

Clemenza:  That Sonny's runnin' wild. He's thinking of going to the mattresses already.

Sonny:  No, no, no! No more! Not this time, consiglieri. No more meetings, no more discussions, no more Sollozzo tricks. You give 'em one message: I want Sollozzo. If not, it's all-out war: we go to the mattresses.

—The Godfather

 

It's time for 42Floors to go to the mats.  We're hunkering down.  It's go time.  My loving girlfriend has approved this.  My friends understand.  My family is supportive.  Getting a startup off the ground takes an almost superhuman effort.  It takes obsessiveness.  It takes 100% time commitment.  It takes tremendous focus.

For the past 9 months, I've been living the good life in San Francisco.  I've been working hard on 42Floors, but not obsessively hard to be honest.  I actually lead a fairly balanced life with a daily workout, reasonable hours and weekends mostly off.  That's not bad.  I've done a few extracurricular activities, most important of which was helping create NFTE Launch.  During this time, I've gotten my broker's license and learned a ton about my industry.  I've met with 100s of entrepreneurs and spoken by phone to almost everyone that contacted me through this blog.  It's a been wonderful time.

 

But it's time to go to the mats.

 

When we started FlightCaster and Openvote before that, we had to live with each other...because we didn't have enough money to afford separate rent.  We look back fondly at those times when 5 of us were living in a 3 bedroom apartment.  Yeah, we had no space.  Yeah, some of us slept on the floor.  Man, we worked our asses off during that time.  There's something magical that happens when you devote yourself to something with such intense focus that the rest of the world is forgotten.  It's not sustainable.  It may not be healthy.  But it's the single best way to launch a company.

So, the 42Floors crew talked this over and we all agreed that we wanted to go to the mats.  We're moving out of our respective apartments.  We're all switching to a Maker's Schedule.  We rented a house in Redwood City for 5 months for all of us to live in and work out of.  

We can't fucking wait.  While it'll be hard work and the intensity will get to us at times, we also know what makes going to the mats so special.  It's really an opportunity to perform at our absolute highest levels.  When's the last time you've done your best work?  How many times in your life have you worked at peak capacity?  How many hours a day are you really productive?  This will be the most productive time in our lives.  It's pretty cool.

You know what else is cool?  Our sweet-ass startup house!

When I saw this place on Craigslist, I knew that it was just made to be a startup house.  Check it out:

Pretty sweet, eh?!  Startup life may be really hard...but that doesn't mean it can't also be fun.

 

Find discussion of this post on Hacker News

***
 
 

And please come check out my new startup, 42Floors

We're fixing commercial real estate.  Forever.

Sign-up to learn more at 42floors.comand like us on Facebook, and follow us on AngelList, and follow us on Twitter.

 

******************
I'm Jason Freedman.  
I've got a sweet-ass new company: 42Floors.  
Previously, I did FlightCaster.
I welcome connections on Linkedin,  FacebookAngelList and Twitter.

Use AngelList for customer development...and then raise money.

When I first heard about AngelList, I thought it would never work.  They had grabbed some of the top investors in the tech world and put them on a distribution list for entrepreneurs to spam?  How could that possibly work? 

And then we started hearing about a startup here and there getting a little funding from someone off of AngelList.  I couldn't tell whether it was bad startups finding dumb money or just personal connections orchestrated personally by Nivi and Naval.  Either way, I didn't take it that seriously.  I was in the middle of our FlightCaster acquisition; raising a round of funding was the last thing on my mind.  Whenever people asked me for fundraising advice, I was never down on AngelList, but I never remembered to bring it up.  It just wasn't relevant yet.

It is now.  Mark my words, 2012 will be the year AngelList explodes with traction.

AngelList is for real.  It's here to stay.  And it's going to totally change the way we all raise money.  I don't know if Nivi and Naval planned it this way from the beginning, but they've turned AngelList into Facebook for startups.  It's not just a funding list, it's a full blown social network specifically designed for social credibility in startups.

Before I explain, I'll give you the super quick primer on AngelList for those of you that haven't use it.

Startups go on AngelList and create a profile for each entrepreneur and for their startup.  The startup profile includes a very brief screenshot section, a place to post advisors, current investors, and some financial information that has privacy toggle settings.  Investors can create a profile that post their previous investments, their areas of expertise, and what types of investments they like to make.

So far, pretty simple stuff.  Well-executed and clear.  There are a bunch of other little features on the profiles like status updates, references, etc.  But overall, it's still very similar in content to Crunchbase.

The magic comes in how the social dynamics of AngelList are managed.  AngelList uses Twitter-style following instead of Facebook-style friending.  Anyone that wants to follow a startup or an investor can follow them.  We've seen this show before.  On Twitter, your follower count is a pretty significant indicator of social proof.  On Angel List, it works the same way. 

 

Having a few hundred followers is a way to signal that there is pent-up demand for information about your startup.  I think of it as priming the pump.  It's not as powerful as the social proof that comes with telling the world that some A-List investor just put money into your startup, but it's the signal that comes out earlier.  

In the pre-AngelList days, we used to accomplish this feat by creating buzz amongst investors.  As anyone that has done the Sandhill Shuffle will tell you, startup investing is an incredibly small and social community.  When we raised for FlightCaster, almost every VC with whom we met knew our story before we got to them.  Like most entrepreneurs, we stacked our meetings all at once so that our name popped up multiple times in VC chatter.  We met with 50+ investors during our pitch process...in two weeks.  It was the busiest week of my life.  It was also incredibly inefficient, very distracting to product development, and very risky to us.  We had no way of knowing if the timing was right, no insight into our level of buzz, no feedback loop on our accomplishments.

Now, with AngelList, you can show that pent-up demand online, through your follower count.  We put 42Floors on AngelList before we had even firmly decided on our product.  When we first posted our profile, we had only figured out our problem, fixing the broken process of commercial real estate, but we hadn't yet nailed a minimum viable product. Our profile is still super empty. All we really say is the problem we're solving.


We're not currently fundraising, but I'm having lots of great conversations with investors right now.  And this has become the most surprising additional perk of AngelList.

 

AngelList is a massive source of great customer development.

In building our commercial real estate product, we've needed to talk to lots of brokers, landlords tenants, real estate investors, etc.  Some of these people are hard to reach.  I keep posting to AngeldList each of my 'needs'.  As I've said before, investors are great at providing valuable introductions.  One, they like helping out and two, it's a way for them to prove their value-add as an investor without having to commit to cash.  


When we finally start fundraising, I'll use AngelList to broadcast who our early investors are to the rest of the investor community.   By that time, we'll have hundreds follows that have learned about our progress from day one.  This is how we answer Suster's call to invest in lines, not dots.

All of this means you need to start now!  If you wait until you're actually raising, you won't have time to build up a following and it won't work as well.  You don't have to have your investment deck ready yet.  You don't have to have your advisors ready yet.  Set-up your profile as fast as you throw your Launchrock page up.  As always on this blog, here are a few suggestions to get you started.  More to come as we experiment...


AngelList Reading

Thoughts on AngelList, "Social Proof", "Spray & Pray", & The Network Effects of Large Scale Investing — Dave McClure

"AngelList Fucking Rocks. Period.  it's the single greatest innovation in our industry in the last 5 years (aside from LinkedIn, Facebook, Twitter, & Quora) and it's great for almost all participants. and while social proof can be abused / misused, so can gasoline... doesn't mean you shouldn't fill up your gas tank and go back to riding horses."

 

Venture Capitalists Actually (Slightly) More Active Than Angels on AngelList — All Things D

"AngelList counts about half of the investors in each category as active participants. Active seed fund investors have taken 5.6 AngelList intros on average, active multi-stage VCs have taken 5.4, and angels have taken 5.

Of the VC firms, General Catalyst Partners has the most intros, at 64 spread among five partners. The rest of the top five are Atlas Venture, Bessemer Venture Partners, First Round Capital and Charles River Ventures."

 

Why would a seasoned entrepreneur use AngelList? — Quora

"It's the difference between going door-to-door to sell vacuum cleaners and placing an ad on Google. One approach is a pain in the ass. The other is fast, easy, efficient.

Or think of it like this: you do everything else online, why wouldn't you raise your money online? You put your code on GitHub. You put your servers on Amazon. You buy customers on Google. You market on Twitter. And you can raise your money on AngelList."


Is AngelList technically violating the general solicitation rules of Regulation D by sending out mass emails requesting investment? — Quora

"(i) AngelList is not soliciting investors in violation of Regulation D because they have a “substantial and pre-existing relationship” with all of the investors; and (ii) AngelList is not a “broker” requiring registration because they are not receiving a commission or being compensated for their assistance."

 

 I tried to go after cold money and make it warm. Instead, I should have gone after warm money and made it hot. — Jen McCabe

"AngelList is amazing. Worth it. Worth it. Well worth it. Do it. Be ready. Take time to prep and maximize your opportunity. Study how to hack the system, like any other."

 

 

 

Find discussion of this post on Hacker News

***
 
 

And please come check out my new startup, 42Floors

We're fixing commercial real estate.  Forever.

Sign-up to learn more at 42floors.comand like us on Facebook, and follow us on AngelList, and follow us on Twitter.

 

******************
I'm Jason Freedman.  
I've got a sweet-ass new company: 42Floors.  
Previously, I did FlightCaster.
I welcome connections on Linkedin,  FacebookAngelList and Twitter.

Obliterate Startup Depression

One of my favorite parts of the startup community is that we generally all acknowledge that we're not playing a zero sum game.    We create value by creating new markets and disrupting old, inefficient markets.  Sure, we compete against each other as well, but in general, the communal spirit of entrepreneurship is a rising tide that lifts all boats.

We need to do an even better job of supporting each other though.  And more so than just with introductions, helpful blog posts, advisorships.  We need to support each other on a personal level.  We need to acknowledge that almost every entrepreneur goes through startup depression at some point.  And most of us go through startup depression quite regularly.  

I go through it all the time.  During FlightCaster, it hit me several times.  The worst of it was 12 months into the company.  As a team, we were struggling on lots of fronts.   Our business development was going slowly, our complex prediction system kept breaking, and our team was starting to argue.  We weren't getting enough users to our site.  Paul Graham warns all YC companies that this period will come.  He calls it the Trough of Sorrow:


Oh man, it was the worst.  I fought with my cofounders, who also happen to be some of my closest friends.  We had heated meetings with our investors, trying to explain why things were not going smoothly.  Not only could I not fix everything, many of the problems were my own fault.  I could feel my team starting to doubt my leadership.  I couldn't blame them, I was too.

On the inside, I didn't just feel bad or sad or stressed.  Worse, I felt empty.  Startup depression is like running an ultra marathon on no sleep.  It's the lack of energy that is so tough to overcome.  It sucks.  I didn't approach each day with creativity and endless passion.  It was just hard.  And it was so so tempting to give up.

And I would give up.  I remember those mornings  when I came into work late.  I would wake up at normal time and just not get out of bed.  Maybe I'd watch reruns of the Office or mindlessly browse Reddit.  I'd mope around my apartment wanting anything but to go to work.

This is startup depression.  It happens.  It happens to all of us.  We get it and deal with it in different ways, but we all get it.  There's no way to avoid it in this line of work.  Entrepreneurs choose this life and the rollercoasters are very real.

I have emerged from every one of my startup depressions just fine.  Sometimes, it lasts days and sometimes it lasts just a few hours.  I always come away stronger and I've learned a lot in the process.  I want to share a few of the things I've learned.  


How to Obliterate Startup Depression

Get help from your cofounder
Max Levchin of Paypal and Slide fame just spoke at Y Combinator's Startup School.  He talked fondly of the time Peter Thiel, his cofounder at Pay Pal, told him straight up that everything would be fine.  They were in the midst of a funding round going south and Max was losing faith.  With a few timely comments and rock solid confidence, Peter put Max on his shoulders that day.  That's what cofounders do.  I would never have made it through FlightCaster without my cofounders' support.  Cofounders need to support each other during the down times.  It's perhaps the single most important task your cofounder can do for you.

Get a startup advisor
In a previous post, I talked about the difference between a strategic advisor that helps you raise money by lending credibility and a startup advisor that helps you navigate all the small shit.  A startup advisor that is only 12-18 months in front of you on the path will know exactly how you feel.  He'll be able to tell you honestly whether everything will be alright.  Sometimes it will be, sometimes it won't.  But you need an outside perspective to help you see the difference. Want to know whether you have a great startup advisor?  If you haven't gone to them during your down moments, than you don't have one.  Get one.

Invest in your own health
The single greatest perk of the company that bought FlightCaster was the health program. They had a nutritionist on staff that bought all healthy foods and an on-site gym that had an incredible communal workout program.  Check out the video I made for them while there.  You may not be able to afford an on-site gym for your startup, but you can still invest in health. Create good habits when things are going well and stick to them when things go south.  Right now, I go climbing every Tuesday and Thursday morning with an old friend.  No meeting is ever scheduled during that time.  It's perhaps the most important standing commitment on my schedule.

Be open with your community
Too many of us fall victim to startup bravado.  We always portray our startups as unstoppable successes.  I hear it all the time when I talk to people.  The first 10 minutes of a conversation are about how great everything is going.  If I stick around long enough, we finally let our guards down and admit just how much we're struggling.  Communities like Hacker News and Y Combinator can be daunting because we witness such success from our peers.  It is intimidating.  However, if you're honest within a community like this, you will always be impressed by the response.  Check here, here, and here for great examples.

Be conservative in other parts of your life
With a startup, you tie up most of your net worth in a single, illiquid stock.  That stock is heavily correlated with the stability of your salary, your availability of healthcare, and your mental state.  For this reason, you should not have any risk in the rest of your finances.  I keep all my money in an FDIC-insured bank account.  Sure, I would like to make a better return, but I can't take the risk of compounding my losses if the markets tank.  Startup life is hard enough already, don't lose your money with optimistic investments.  Money troubles is an incredibly efficient way to trigger depression.

Create company rituals
You need some way to break free as a company when you hit the seemingly endless Trough of Sorrow.  One of our traditions at 42Floors is winning or losing each day.  Some days we lose.  We're open about it.  A few weeks ago, we got chewed up by a potential investor.  We were all down on it.  As we were moping around the office, I sent everyone home.  We lost that day.  Tomorrow is a new day.  And we celebrate the fuck out of the days we win.  During my first company, I never celebrated our first term sheet because I didn't want to count my chickens.  That was stupid.  A term sheet was a huge fucking accomplishment!  And by the time we signed definitive documents on that round, we were so chiseled that we felt beaten up.   At 42Floors, we celebrate every day that we win.  Right away.  Whether it be a term sheet, a code push, or a happy user — wins should be cherished.  You never know how long it will take to get another one.

Get your house in order
During FlightCaster, I moved apartments during our funding round.  Wow, that was horrible.  In the midst of gut-wrenching highs and lows, I also didn't have a stable place to live.  Fight the startup battle at full strength.  There's nothing better than going home to great roommates, caring friends, and a loving significant other.  I joined a communal ski house when I moved out to the Bay Area.  My favorite part about my ski house is that no one there cares about technology or startups.  We don't compare investors, we don't talk user traction.  It's awesome.

Talk openly about depression
Don't be afraid of the word.  Depression is not some word to be whispered under your breath or handled with kid gloves.  Getting depressed doesn't make a person weak.  It doesn't mean that someone will be unsuccessful.  We all have depression at some points.  We also all have jubilation at some points.  The high and lows come as a package.  You rarely get one without the other.  I talked extensively with an old colleague about the ways we each dealt with depression.  It's much easier to battle it when you're not hiding it.  And if you need professional help, go get it.   Whatever you do, don't bottle everything up inside.

 

Of course, you can't really obliterate startup depression.  But you need to have the mindset that  it's beatable.  You should treat it just like you would any user acquisition problem or business model challenge.  Create processes to solve it.  If you don't treat it as a tangible problem that needs solving, you'll be like a toy boat floundering in rough waters: helpless to control your own fate.  And with startups, rough waters are always on the horizon.

We're getting closer and closer to the launch of 42Floors.  I can't tell you how excited I am to share what we're doing with all of you.  I really think we have a chance at fixing commercial real estate. I'm also nervous.  I call the period we're in now Delusional Optimism.  All of our ideas look gorgeous in Photoshop.  No customers have left us.  We haven't run out of money.  We haven't faced bad press.  We haven't had users choose the back button over the sign-up button.  No depression, no problems.  Delusional Optimism is the best.  And it can't last. 

Shit's about to get real.  Things will get tough.   Bring it on.  We're ready.

 

 

 

Find discussion of this post on Hacker News

***
 
 

And please come check out my new startup, 42Floors

We're fixing commercial real estate.  Forever.

Sign-up to learn more at 42floors.comand like us on Facebook, and follow us on Angel List, and follow us on Twitter.

 

******************
I'm Jason Freedman.  
I've got a sweet-ass new company: 42Floors.  
Previously, I did FlightCaster.
I welcome connections on Linkedin,  FacebookAngel List and Twitter.

Advice to advisers: Stop being so nice.

 

In my first company, I had built a polling application that was doing decently as a social website on college campuses and as a Facebook app.  We were working hard to think of new ways to acquire customers...classic B2C type stuff.  We had some connections to IBM and we started talking with them about how we could sell them on our platform.  Somewhere along the way, we thought that this app could be a great fit for enterprises as well.  Some kind of internal productivity app.  


Let me repeat that.  We were going to sell apps to IBM.


IBM toured me around the company with tons of conference calls.  I made proposals, calculated estimated costs, built mockups.  I worked my ass off.  I reached out to my advisors for help on the sales materials to make them perfect.  As money in my company was dwindling down, I stopped paying myself.  I was on the verge of closing a deal with IBM and optimistic that we would make it through.  We eventually did run out of money, so I funded the company a few more months on my own.

Finally, I pushed for a go/no-go meeting with IBM.  After months of talking and lots of excitement, my IBM contact said they were still interested by wouldn't have a budget for the product.  They said check back next fiscal year.

A sad ending to my little company.  We struggled another few weeks on our B2C strategy.  But we were done.  And it was my fault.

Not because I failed to close IBM.  I know now that we were never going to close IBM.  IBM doesn't do deals with startups.  They were happy to give an eager young entrepreneur a bit of their time, but they never had any intention of writing a check for our services. I should have never gone down that road at all.  Who knows if we would've been successful with our consumer apps, but I can say for sure that we would have had a better chance of success if we hadn't gotten so distracted with IBM.

Now, I know as an entrepreneur, I'm supposed to break down walls and do things that others don't think is possible.  But seriously, was this really the best use of our time?  I had no experience with enterprise software or B2B sales.  Our product wasn't even really a good fit.  AND IBM?!  With 20/20 hindsight, I can't think of a worse company to sell into.  They're big.  They're slow.  And wait for it...they're a fucking tech company!  Why would they ever need our help?

To be clear, this little strategic misstep was 100% my fault.  I pushed for it.  I was naive.  And I paid the price for my suckiness. 

But I got so much help along the way.  Advisers that proofed my proposals, answered my questions.  They mentored me.  They cared about me and wanted me to feel good.

This is hard to say, but I wish they had believed in me less.  Encouraged me less.  Supported me less.  I wish someone, anyone, had put a stop to my foolish ideas.  I'm incredibly confident and stubborn.  I believe I can do anything.  So additional support is kind of wasted on me.  What I really needed is someone that could break through my confidence and tell me straight that I was being an idiot.

It is possible to be this type of adviser.  I now ask better questions of my advisors and explicitly welcome their roughest criticisms.  I gravitate towards those advisers that rip into me with skepticism and challenging questions.  One of my oldest friends has been that adviser for years.  He never believes a word I say.  He pushes me to be better.  I love that.

Now, when I advise entrepreneurs, I try to help in any way I can.  If I don't believe something, I don't hold back.  It's not easy.  I actually would rather be supportive, but I know that the marketplace is not supportive.  It's unfeeling, never satisfied, and totally merciless.  Better to get tough feedback now, rather than fail later.

I've been working with one young entrepreneur that is starting a fundraising round and wanted advice on his pitch deck.  He's waaaaaay too early to be fundraising.  He should be spending 100% of his time building his product and pursuing traction—not wasting time with endless coffee chats and pitch deck making.  He's a stubborn guy (most good entrepreneurs are...) so it was pretty hard to get through.  But, man did I rip into him.  I mean, he came to me for advice, so I wasn't going to hold back.

I felt bad afterwards.  And for a minute, I wished that I had been more supportive.  But only for a minute. This was his response the next day:


Thanks for the advice a few nights ago, it was a much needed smack upside the head.  Thanks for being the voice of reason--a lot of our friends gave us good tips on how to make a nice pitch but you're the only one who was like "what are you doing? why do you need money? stop this!" and it looks like that is probably the right question.

I'm not a dick.  I'm direct.  
(Though I admit, it can be hard to tell the difference)

***

To all my advisors:
Thank you so much for all your support.  I really do appreciate it.  You're an incredible part of my life and I hope, if you just read this, you don't view me as unappreciative. And the next time you beat the shit out of me with your skepticism...Thank you.


Find discussion of this post on Hacker News

***
 

And please come check out my new startup, 42Floors

 

We're fixing commercial real estate.  Forever.


Sign-up to learn more at 42floors.com,

and like us on Facebook.

and follow us on Angel List,

and follow us on Twitter.

I would also greatly appreciate introductions to potential advisors.  We're not fundraising until the spring, but I'm happy to 'get coffee' with people who are interested in getting to know us.  

******************
I'm Jason Freedman.  
I've got a sweet-ass new company: 42Floors.  
Previously, I did FlightCaster.
I welcome connections on Linkedin,  FacebookAngel List and Twitter.

Entrepreneurs is good people. Introducing NFTE Launch!

nftelaunch.org/bayarea

 

 

For the last couple of years, I've been volunteering for an organization called the Network for Teaching Entrepreneurship (NFTE).  Founded in 1987, NFTE brings business plan competitions into underserved high schools across the country.  Some families have parents that teach this stuff to their kids naturally through role modeling and at the dinner table.  Others rely on NFTE.  It's cool shit.

I noticed that there were always one or two students that wanted to take their idea further.  They had that itch that so many of us have spent our lives scratching.  They wanted to move beyond business plans and actually build something.  But they didn't know how.

And so...we created the NFTE Launch Week.  The goal was both simple and audacious:


Help aspiring entrepreneurs launch a real product in 4 days.


Props to Krista Katsantonis at NFTE Bay Area for believing me when I said this was possible.  I told her that our curriculum would be straight lean and customer development.  I promised her that the Bay Area entrepreneurial community would step up and mentor these kids.  

You guys didn't disappoint.

Four days before the week was scheduled to begin, I wrote one blog post asking for mentors to sign up and posted it on Hacker News.  I told you guys that we needed 3 hours of your time, no preparation or commitment needed.  Show up for a morning or afternoon session, pair off with the teen entrepreneurs, and help them move their product forward.  That's it.

The response was incredible!  Within a day, dozens of experienced entrepreneurs had signed up to be mentors!  Boo-yah!  I gave only two guidelines for the mentors:

  1. You can't type for them.
  2. You have to leave them self-sufficient.

Otherwise, do everything you can to help them move their company forward.  And they went to work.  Here's what got created:


Crystal was initially struggling to think of an idea.  Chris from Central.ly, helped her think through a dozen different product ideas until she landed on the TogetherPouch. Crystal is now making a group-snuggie that is targeted towards her own friends.  It's a totally unique blanket-pouch, in the shape of characters she creates.  By day 2, she had a prototype.  By day 3, she had a website and was set up to receive orders.  I would not be surprised to see TogetherPouch as the most popular Sweet Sixteen gift this year...



DeShawn came to NFTE with a love for making electronic music.  He had been selling his music as background music to indie artists and game makers, mostly in cash transactions to people he knows.  With a few days of hard work and missteps, the mentors helped DeShawn figure out how to set up a Weebly website with Soundcloud as a backend to host his music.  Now anyone, anywhere in the world, can purchase exclusive rights to Deshawn's original music.  Check it out.

Viviana brought a love of making jewelry for stretched ears and is now running her own small business.  With the mentors' help, she created Free the Soul.  She's now social media savvy and is talking with fans of her artwork on Facebook and Twitter.


Vivian is catering a magical Bubble Tea experience to startups in SF.  The mentors taught her Hustling 101.  Our new bizdev wizard, networked her way into getting Heroku to be her first customer (without our direct help!).  She's now working on a way to creat a shelf-stable version of Bubble Tea that she can sell in local stores.

And much, much more...

Huong, Tashayla, and Beatrice are all selling products online through some combination of Weebly, Wordpress, and Etsy.  Huang is running a t-shirt company called Always Adamo.  She specializes in Couples T-shirts, in which the graphics of each shirt work together.  Tashayla is making Doglets, totally unique dog bracelets for those dog owners, like Tashayla, that love and adore their dogs (perhaps, too much...).  Beatrice is using her art skills to make vintage jewelry.  


***

On Day 4, our aspiring entrepreneurs launched an MVP of their companies in front of 50 local entrepreneurs.   They're now meeting every other week in community dinners to check-in on each others' progress, get help from mentors, and hear stories from successful entrepreneurs.  The NFTE Bay Area office is already hard at work fund-raising for the program and making the 2012 Launch program available to more aspiring young entrepreneurs.

I've got to tell you—this has been one of the coolest things I've ever been a part of.  The mentors really stepped up and did what they do best: help launch companies.  It was totally natural, effective, and awesome.  The teens supply all the energy; we just show them how use the right tools.  It's cool shit.

 

You should get involved.  Here's how:


And finally, special thanks to Abe Cajudo for making our awesome video and Ahmad Varoqua for putting together our website in no time at all.

Find discussion of this post on Hacker News

******************
I'm Jason Freedman.  
I've got a sweet-ass new company: 42Floors.  
Previously, I did FlightCaster.
I welcome connections on Linkedin,  FacebookAngel List and Twitter.

Not all who wander are lost

 

When I was 19, I stepped on to Duke's campus as a freshman, ready to learn, party, and prepare for my career.  I met with my career advisor and planned a course load aimed at pre-med with a major in political science.  I figured I would either make it big in politics or become a doctor.  You know, one or the other.  Probably best to prepare for both by taking the right classes from day 1.  Not once did I ever think I'd become an entrepreneur.

Funny thing about entrepreneurs...we're not very good at following plans.

I never really connected to Duke academically in any meaningful way while I was there.  My favorite classes in the end were a whole bunch of American Literature courses.  I also took golf and yoga.   I was in flagrant disregard of the career preparatory effort that consumed so many of friends. But mostly I was lost, not ready to think seriously about what I wanted to do when I grew up and shocked that everyone else seemed so certain.

I learned entrepreneurship at Duke...but never through a class.  My true calling came while incubating a little project that my parents hoped wouldn't distract me from my studies.  While a freshman, I refused to pay $175 for a loft and took a trip to Home Depot in my roommate's car.  With $45 worth of wood and materials, I made the ugliest, most rickety, unsafe loft you've ever seen.  I had my roommate sleep on it.

Two days later, a fairly unsavvy friend asked me to build one for him as well.  And thus, before orientation had even ended, Student Lofts was born and I was an entrepreneur.  I didn't think of myself as an entrepreneur, but that's what I was.  I built 15 lofts that year and 30 the next.  Junior year, I had a team of friends show up in August to build lofts in the parking lot.  And senior year, we cornered the market by building a website and putting a flyer in the pre-frosh mailer.  The $175 incumbants were blindsided.  I maxed out 14 credit cards to pay for materials, hired 10 workers from Durham, and sold almost 200 lofts at $200 a pop.  That's right bitches.


It was badass to make a bunch of money.  But by the spring time, I was back to lacking direction.  What was I going to do, leave Duke and become a loft maker?  Being an entrepreneur is not glamorous.  I didn't get flown out for in-person interviews like my consulting friends.  I didn't get a signing bonus.  Everyone kept asking what I planned to do after Duke.  I had no response. 

If you're 20 years old and unsure of what you'll do when you grow up...don't fret.  Welcome to the club.

I'm coming up on my 10 year undergrad reunion.  I'm not a doctor and I didn't go into politics.  I still have never received a signing bonus.  It's taken all 10 years, but I can finally tell my college buds what I plan to do when I grow up.  Damn it feels good.

 

Find discussion of this post on Hacker News

 

***
 

And please come check out my new startup, 42Floors

We're fixing commercial real estate.  Forever.


Sign-up to learn more at 42floors.com,

and like us on Facebook.

and follow us on Angel List,

and follow us on Twitter.

 

Sign-up now to among the first to participate when we launch.  It's cool shit.  Don't miss out.

I would also greatly appreciate introductions to potential advisors.  We're not fundraising until the spring, but I'm happy to 'get coffee' with people who are interested in getting to know us.  

 

******************
I'm Jason Freedman.  
I've got a sweet-ass new company: 42Floors.  
Previously, I did FlightCaster.
I welcome connections on Linkedin,  Facebook, and Twitter.

[edit: changed title to 'Not all who wander are lost']

 

There is no such thing as CEO of a pre-product startup. Get off of it.

Just chatted with an entrepreneur that has gotten himself into a bit of trouble.  When he started his company, all of his cofounders took C titles.  He was CEO, his best friend and co-founder was CTO, and their marketing friend became CMO.  That was 2 years ago.

Now the company is rocking along and they're scaling like crazy.  His best friend/technical cofounder is in way over his head and they have the capital to hire someone really experienced.  The problem?  The new hire wants to be CTO.  Best friend cofounder doesn't want to give it up.

Well, Fuck.


These are the type of problems that customers don't care about.  This internal squabbling is a distraction that can rob a startup of one of its most valuable assets: morale.  Startups thrive on everyone working their asses off, believing in a dream that often appears nearly impossible.  The glue that binds everyone through the tough times is that it's fun.  When a startup loses its fun feeling, you can be sure problems are on the horizon.  Infighting over petty shit like titles is one of the most efficient ways of zapping morale.


And when it comes to companywide issues, there's only one person to be held accountable: the CEO.  This one is clearly on him.  Yeah, the current CTO is being childish and petty, but he's not the root cause.  Here's how the CEO got himself into this mess.

When he was starting this company with his best friends, they had to pick one person to be CEO.  Investors always want to know and it's a bad sign if a company hasn't picked a leader.  Very quickly, our newly minted CEO started introducing himself as 'Cofounder and CEO of AwesomeSauce Inc.'  There's was an inflection his voice as he spelled out C-E-O.  It was pride.  I should know, I used to love to say it. 

It feels damn good to call yourself the mother-fucking C-E-O.

The problem is it's barely true.  Really, you're just a cofounder.  With a little 'c.'  99.99% of all decisions (probably 100%) are still being made with full consensus of the founders.  You don't have direct reports.  You don't report to a board that has the power to fire you.  You take out the trash just like everyone else.  In fact, you do so more than other people because they're too busy building the product and you don't want to disturb them.  But when you prance around with your C-E-O, you make your cofounders want the same thing.  And so you hand out other C titles...it's only fair. 

And now you're in a mess.

My suggestion is ditch titles completely.  For as long as you can.  Eventually you'll need them when you're looking to hire more from outside and when heirarchy becomes a necessity.  But until then, skip it.  And if your early guys ask what they should put on their resume,  tell them put anything down.  Seriously, whatever they want.  Who cares?

For my most recent startup, we nipped this sucka right in the bud from the beginning.  We agreed that everyone is either a cofounder or an early employee.  That's it.  There is no sign of the CEO label.  Facebook, Linkedin,  public presentations, Crunchbase, conversations with friends...everywhere.  It's cofounder.  And damn, I'm fucking proud of it.

Find discussion of this post on Hacker News

 

***
 

And please come check out our new startup, 42Floors

 

We're fixing commercial real estate.  Forever.


Sign-up to learn more at 42floors.com,

and like us on Facebook.

and follow us on Angel List,

and follow us on Twitter.

 

Sign-up now to among the first to participate when we launch.  It's cool shit.  Don't miss out.

I would also greatly appreciate introductions to potential advisors.  We're not fundraising until the spring, but I'm happy to 'get coffee' with people who are interested in getting to know us.  

 

 

******************
I'm Jason Freedman.  
I've got a sweet-ass new company: 42Floors.  
Previously, I did FlightCaster.
I welcome connections on Linkedin,  Facebook, and Twitter.

Why aren't you building your startup for early adopters?



It's time that we all re-read Geoffrey Moore's book, Crossing the Chasm.  Seriously, stop whatever you're doing right now, download a copy to your kindle, and spend the next 3 hours reading.

I started thinking more and more about Crossing the Chasm the past few days after judging a startup pitch competition. I'm no expert at picking which companies will do well and which won't.  In fact, I'm pretty adamant about not giving bullshit advice about another company's product.  I do, however, have very strong opinions about the process.  And during this round of pitches, I found myself asking the same question over and over again to the teams:


Why aren't you building your startup for early adopters?


Each team pitched awesome concepts for full-industry transformation.  One team wants to change the way research is done for major corporations.  Another plans to disrupt online dating.  And one is ready to transform HR process in the enterprise.  Big markets.  Disruptive ideas.  Awesome stuff.

And each team should stop everything they're doing and read Crossing the Chasm.  They need to re-orient their launch plan around marketing to early adopters.  While the investment pitch is often focused on how you'll transform an entire industry, your actual startup battle plan for launching your startup should be 100% focused on early adopters.

Moore's main point is that companies have a fairly predictable path they take on as they serve their users/customers.  The Crossing the Chasm part is really hard.  If you think back, some of our favorite startup success stories had to execute somewhat of a veer to jump the gap from early adopter to mass market.  Twitter was originally a tight community of geeky early adopters that were staying in touch with each other in real-time.  It crossed the chasm  when it became a popular way to follow celebrities or news such as CNN and Oprah.  And now it's approaching a near ubiquitous form of real-time communication, celebrity-folllowing, link-sharing, media distribution, etc.

What if Twitter had started their company as a way for celebrities to broadcast their message to their fans?   Do you think it would have succeeded?  Moore would tell us no.  Celebrities and their fans aren't early adopters in the same way that Bijan Sabet or Robert Scoble are.  Twitter's early geek crowd got it off the ground and nurtured it to critical mass.  At that point, there was clear utility for CNN and Oprah to join in full force.  

 

Don't cross the chasm until you have to.

source

What I saw in all these startup pitches is that they were building their dream solution to a problem.  Fortune 1000 companies don't like to take risks with innovative startups, no matter how compelling the product.  They'll take meetings.  They'll get really excited about working together.  But before signing, they wait for a solution to be well-proven.  There's just no reason for an IT procurement manager to risk his job over some new startup that may hit the deadpool in the next 18 months. 

It's okay to pitch to investors your ambitions for disrupting an entire industry, but don't smoke your own dope.  Build for early adopters.

 

Find discussion of this post on Hacker News

***
 

And please come check out my new startup, 42Floors

 

We're fixing commercial real estate.  Forever.


Sign-up to learn more at 42floors.com,

and like us on Facebook.

and follow us on Angel List,

and follow us on Twitter.

 

Sign-up now to among the first to participate when we launch.  It's cool shit.  Don't miss out.

I would also greatly appreciate introductions to potential advisors.  We're not fundraising until the spring, but I'm happy to 'get coffee' with people who are interested in getting to know us.  

And finally, if you're searching for office space in the Bay Area right now, let me know and we'll go to the ends of the earth to help you!

******************
I'm Jason Freedman.  
I've got a sweet-ass new company: 42Floors.  
Previously, I did FlightCaster.
I welcome connections on Linkedin,  FacebookAngel List and Twitter.

Don't try this at home. How credit card arbitrage funded my first company.

 

Getting a startup off the ground takes time, talent, and money.  Time can be stolen from various parts of your life with some determination and prioritization. Talent can be eventually learned or acquired with cofounders.  Money's different.  You can do a lot of things to reduce the need for money, but it usually takes some capital to get your idea off the ground initially.

I still remember the night I met with my 2 cofounders of my first company to talk money.  We had been working on Openvote for about 6 months while in business school together.  It was our first startup,  and so far, it had been super fun.  We had a vision for changing the world, and we weren't afraid of the hard work or the low likelihood of success.  I remember this particular evening in part because the weather was horrid.  We were sitting in our bud's living room in New Hampshire with a wind howling outside.  Though warm inside, we were all very tense.  With no technical cofounders onboard (I was so silly in those days!!), we needed money to hire coders.  With a few other items budgeted, we had determined that our startup needed a bare minimum of $20k to get off the ground.

One of our co-founders came to the conclusion that he couldn't put any money into the company.  With a wife and a kid on the way, he couldn't justify any financial risk.  He also couldn't go without a salary.  It was a really painful moment, but we had to cut him loose as a cofounder.  I hold no judgment.  Startup drag coefficients are very real.

My other cofounder was able to come up with $4k, but couldn't risk anything more.  We agreed that I would be responsible for the last $16k.

For some personal background, I do come from a financially stable family.  My parents could have covered the $16k to help me follow my dreams.   But I didn't ask them (and neither did they offer).  The financial pressure and responsibility of my startup was to be fully on my shoulders. 

But I didn't have the $16k or anything close.  I had spent the first part of my twenties working at summer camps, pulling in a whopping $31k a year.  Then, I went to business school where all my friends had expensive tastes in restaurants and vacations.  At this point in my life, I had access to about $5k in cash and was substantially in debt with loans.  That $5k was already not enough to fund my personal expenses for the rest of business school.  I budgeted that I needed $22k to cover the startup and my personal costs.

I could have gotten a normal MBA-type internship and earned a bunch of money.  But I was also impatient.  I knew that our startup had momentum and delaying for any reason was off the table for me.  

 

And, so I raised my money through credit card arbitrage: $22k across 14 different cards. 

 

Financing problem solved.  Now we could continue with building our startup.  Of course, I knew that debt never solves money problems, it just delays them.  But for a startup at embryo stage, delaying problems can be nearly as good as solving them.  I'm going to tell you how I did it, but first, my quick disclaimer.  I don't ever recommend this strategy to anybody. Fucking around with credit card debt can do bad, bad things to you.  But if you insist...

How to Play Credit Card Arbitrage

 

Research the fuck out of credit cards
If you're going to do this strategy, you need to make yourself the world's expert on credit card terms and conditions.  You're playing with fire with credit card companies.   A big part of their business model is built on deceiving customers with hidden terms.  This, this, and this should get you started.  Pay close attention to the risks.  Be careful in your reading.  Most sites that talk about this stuff are monetizing through credit card affiliate fees.  (FYI—I have zero affiliate or monetized links in this post).

Check your credit score
Go ahead and get all your credit reports.  You get them free once a year.  Fix any mistakes and make sure that your credit score is as good as it can be for the time being.  While you're at it, research the fuck out of credit scores.  This, this, and this should get you started.

Find introductory APR credit cards
The game of credit card arbitrage is played because many banks offer introductory 0% APRs for the first year.  They also often offer a few courtesy checks with low cash advance fees of somewhere around 3%.  This means you can write yourself a check for a 3% transaction fee and pay it back within a year with no further interest.

Apply for all the cards all at once
Once you start increasing your credit, your credit score will drop.  But there's a lag in processing the change.  If you apply for a whole bunch of cards at once, your credit decisions will all be based on your original score.  You can stagger them a bit to increase the time you get for credit card arbitrage and to take advantage of account balance transfers which are often initially 0%; however, you risk getting denied for cards or receiving very low credit limits.

Put your cash into interest bearing accounts
I recommend uber risk-free accounts.  I usually just stick with ING's money market savings account.  The point is not to create wealth with this investment, but to help cover the transaction costs.  Your high-beta gamble  is on yourself and your startup. 

Sign up for automatic minimum payments
You'll need to cover the minimum payment every month. Set up to have each of them paid automatically out of your bank account.  It's really easy to fuck everything up if you're not super organized. 

Set the clock for repaying your credit cards
You have 12 months to pay everything back.  Get cranking on something that makes money and get yourself out of this trouble you've created for yourself...

 

 

So, yeah.  That's about it.  For me, it worked out both terribly and perfectly.  The terribly part is that our startup failed, and I never paid myself enough to pay the cards back.  At the end of Openvote, I was saddled with all this credit card debt, plus opportunity cost loss from no salary, plus no job.  It was a tough time.  Even though I was exhausted from the startup's failure, I had earned myself 6 months of working days, nights, and weekends on boring consulting jobs just to get back to even.  It sucked.

But I don't regret it for a second.  It many ways, it worked out perfectly.  It was during that really tough time that we founded FlightCaster.  I had learned just how much I love startups, and it was no longer based on some romanticized view of entrepreneurship.  My friends that deferred their startup dreams for high-paying consulting jobs got no closer to learning how to build a startup and, worse, became accustomed  to the life that a high salary affords. 

I, on the other hand, learned that the risk and hardship of startups and debt were worth it because I was happy.  And, as a Mastercard customer 12 times over, I can say confidently that that shit is priceless.

A Caveat:  Don't do this.  Don't do any of it.  Learn how to code so you don't need to hire programmers.  Get yourself into one of the bagillion incubators out there.  Find a part-time job that you can do to make money on the side.  Do something.  But whatever you do, don't fool yourself into believing that lacking $15k is what is preventing you from doing a startup.

Find discussion of this post on Hacker News.

***

And please come check out my new startup, 42Floors

 

We're fixing commercial real estate.  Forever.


Sign-up to learn more at 42floors.com,

and like us on Facebook.

and follow us on Angel List,

and follow us on Twitter.

 

Sign-up now to among the first to participate when we launch.  It's cool shit.  Don't miss out.

I would also greatly appreciate introductions to potential advisors.  We're not fundraising until the spring, but I'm happy to 'get coffee' with people who are interested in getting to know us.  

And finally, if you're searching for office space in the Bay Area right now, let me know and we'll go to the ends of the earth to help you!

******************
I'm Jason Freedman.  
I've got a sweet-ass new company: 42Floors.  
Previously, I did FlightCaster.
I welcome connections on Linkedin,  FacebookAngel List and Twitter.