humble pie.

Thank you to everyone who has been supportive of me with this blog since I started it last year.  Many of you have voiced your appreciation for posts that you've found helpful.  It's been a really fun experience and a nice way to pay it forward as so many people have mentored me on my own path.  The fact that FlightCaster got acquired halfway through my first year of blogging just made the whole thing easier.  The acquisition gave me a credibility bump and empowered me with confidence.  I generally find that my best posts (based on my feelings for them, not just reader counts) have a nice balance of me as a person and suggestions for other entrepreneurs.  I have tremendous pride in what I do and I love doing it.

 

But I feel like a sham.

 

I'd like for this blog to be more honest, so I have a few things to share with you.  I'm not nearly as proud of my actions at FlightCaster as I make myself out to be.  To be 100% clear, I'm incredibly proud of my team, my cofounders, and all the awesomeness that we created together.  Working with my best friend to create our dream was a pure honor and I'm fortunate to have been a part of it.

But I'm not proud of how I did it, and I feel like I get more credit for our outcome than I deserve.  Part of the reason for that credit is that I actively promote it myself.  But inside, I know that I mostly just got lucky.  And I got lucky in spite of myself. 

I'm sorry.  This isn't coming out very well.  Let me try to be more clear.

 

From day one, I feared failure and it affected every decision I made.

 

There, that's mostly what I wanted to say.  I was not really a courageous founder; I mostly wanted to not fail.  My first company failed and I ran out of money (both my company and me personally).  When we started FlightCaster, I felt that I was lucky to get another opportunity at startup life.  For the first few months, we worked our asses off and it was awesome.  But soon, I started feeling stressed about the possibility of failure.  With one failure under my belt, I felt that another failure would put an end to my startup dreams.  By this time, we'd gotten into Y Combinator, one of the greatest startup handicaps ever created. If I couldn't succeed with YC's help, than I was truly incapable.

My fear of failure caused me to make several stupid decisions.  First, I built our team up too big, too quickly.  Then, because I was so nervous about not having enough momentum, we built out our product faster than our customer development process dictated.  Before launch, we'd created our flight delay prediction back-end with a working website, iPhone app, and Blackberry app.  That's insane!  Three front-ends before launch!  Each with 1-2 people building it.  And I know why I did all that.  I was so fucking scared of failing to raise money post-Demo Day, that I felt like I needed to show we were further along than we really were.

I'm incredibly proud of the investor crew we put together.  But the truth is that, again, my fear drove my decision-making during the raise.  We took on too much money, too early.  Pretty much against everyone's advice, including that of our investors.  And it was my call.  If I'd had more confidence, we could have gone 6-12 months longer with a smaller team and on less money.  We could have validated our product and built our company before giving up too much equity.  But I equated 'not raising enough money' with 'failure.'  I look at some of our batch-mates who waited a year after YC to raise money and they now have the foundations of really sustainable businesses.  I'm so proud of them.

Even our acquisition was driven by fear.  We had another round of funding on the table, but I so wanted to call FlightCaster a win and didn't want to risk walking away with nothing.  Yeah, we were stoked about the company that was acquiring us, and it looked like a good opportunity for us, for our employees, and for our investors.  But I love working for myself. Was this what I really set out to do—to sell my company only two years after starting it?

The truth, again, is yes.  Everything I did with Flightcaster, I did consciously or unconsciously with an eye towards selling the company quickly, getting out, and getting my win. 

Am I glad we sold?  Absolutely.  At the time, it was the best possible conclusion to a series of decisions that had led us there. But it's time for me to be more honest with all of you and to tell you that I'm going to do a better job next time.  I'm not going to let my fear of failure drive my decisions next time around.  If we fail, we fail.  A startup failure won't affect how my family sees me, how my friends see me, or how my girlfriend sees me.  And I'm never again going to let the possibility of failure affect how I see myself.

 

***

 

So, with all of that now said, I want to tell you that I'm starting a new company.  It's called 42Floors.  We're going to fix commercial real estate.  For some reason, commercial real estate never adopted the internet.  That will soon change.  I'll have a lot more to say about the company in future posts but for now, just know that I'm giving it my all this time.  I want to build a company that I can someday tell my children about.  I have visited my grandfather's company, and I know what courage it took him to build it.  I have dreams that my grandchildren will someday walk the halls of a company I created, and they'll be proud of the impact I made on the world.

I also plan to hold on to the truly honest posts like this one so that my children and grandchildren can know that I got scared too. The fact is, I'm still scared that I'm going to fail.  I can't completely get rid of the feeling.  I am simply choosing to no longer be bound by that fear.  We may make it, we may not.  But I'm determined to be more open and more courageous in the process. 

I would love it if you'd help keep me honest.  While I appreciate your support, I most appreciate the skeptics out there who push me to do better. From here out, please consider your 'unsolicited' advice...very much solicited and appreciated.

I thank you in advance.


Please come check us out.


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.

 

Find discussion of this post on Hacker News.

******************

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

Volunteer opportunity in SF next week: Help teens build websites and launch companies

tl;dr Come volunteer for 3 hours in SF next week. Become a NFTE Mentor and help aspiring teens from low income communities become entrepreneurs. 

Not available or not startup-savvy? Please share this with your SF friends that might be interested.


***


Over the past year, I've been volunteering in underserved high schools in South San Francisco through the Network for Teaching Entrepreneurship (NFTE). I have 8 teens that are aspiring entrepreneurs and I'd like your help. We're doing a one-week startup bootcamp and I need start-up guys to come in and be mentors. Come meet with a group for a morning or afternoon and help them with whatever they currently need help on.


Who are some of the entrepreneurs and what are they making?

Crystal has made dark chocolate covered strawberry bouquets that are beautiful and delicious. She wants to learn how to sell them on the internet.

Deshawn has created a cheaper recording studio. He wants to help Bay Area indie artists record their own music.

Huong is an artist. She's made unique t-shirt designs and she wants to figure out how to produce them and sell them 
online.

Tashayla is a dog lover. She's created a sparkly 'dog bracelet' that she wants to sell online to other girls that are crazy about their dogs.

Viviana is into piercing and stretching. She's wants to help people create their own body art products online.


Why I care about this and why you might too

Earlier this year, I watched Waiting for Superman—the documentary about our failing public schools. This is an opportunity to provide a solution in our own way. I can't fix the ridiculous teacher union problem, but I can work with high school students on the one thing I know: making something people want. We have a group of students that have the audacity to believe that they could start a company. They are starting with far fewer resources than most. They're severely lacking in computer skills. We can help them...

None of this is technical stuff. For most of these students, helping them sell a few thousand dollars worth of their products and then go to college would be a massive achievement. My interest is in starting a domino effect, wherein other students from their schools see that through hard work and some entrepreneurial spirit, they can make money and be successful.


What we're going to do next week

I'm running a 5 day bootcamp. The goal is to help these guys progress from having a product and an idea to actually selling their works online. We're going to help them set-up websites and marketplaces using Weebly, Foodoro, Etsy, etc. We're going to help them market their products with their own Posterous, Twitter, etc. We're going to help them set up payment processing and invoicing. We're going to help them learn about PR and teach them how to hustle.


How you can be involved

I'm looking for a group of startup-savvy people to be mentors next week. You'll need to commit to a morning or an afternoon. No preparation necessary. There's no structured plan. I believe that if we just surround these guys with some awesome people, we can help them massively accelerate.

Tuesday 9-12 and 1-4: Building a product, payment processing, setting up a website 1/2
Wed 9-12 and 2-5: Setting up a website 2/2, marketing
Thursday 1-4: Recording your pitch (we're having a videographer come in)
Thursday 5-7: NFTE donor happy hour 
Friday: 9-12 and 1-4: Building a roadmap, next steps

All mentors and their associated companies will be recognized on our website.

 

Can't Make it?  Other ways to help

PR help:  This is a story that needs to be told.  We need some help crafting a release and pitching the story to national journalists.  I would estimate 5-10 hours of PR assistance.

Videographer:   We're building a  website for the program with videos from each entrepreneur and one video about the program.  We need sometime to come film on Wednesday, July 20th.

Join the list:  Can't help now, but want to stay in the loop?  Contact me and I'll add you to the non-spammy list.

 



Contact me now and sign-up

Please contact me with a time next week that works for you and your phone number. Please also share this with anyone from your company that is interested in a volunteering a few hours.


Thanks,


Jason

 

 

 

Find discussion of this post on Hacker News

******************
I'm Jason Freedman.  I co-founded FlightCaster.  
You can, if you like, follow me on Twitter: @JasonFreedman.
Or send me a Linkedin request or become my bff on Facebook

Let's not get greedy with these bubblicious seed rounds

I recently chatted with Josh Felser of Freestyle Capital.  We talked about all sorts of things going on in StartupLand.  Josh is part of a loosely connected crew of successful, serial entrepreneurs that now spends its time investing in early-stage entrepreneurs.  While Josh is now a VC who is responsible to LPs, he is still close enough to his founder days to remember how challenging the startup path is.  As a result, he is a trench warrior who works his ass off right alongside the entrepreneurs in whom he invests.

Fortunately, there are a lot of of these guys in the investment ecosystem right now.  We sometimes call them Super-Angels or Micro-VCs.  Whatever the terminology, you know them because they invest collaboratively in syndicates, are accessible to founders of all shapes and sizes, write helpful blogs, and work their asses off.  We were lucky to have several of them in FlightCaster's financing.

Compare those attributes to our perceptions of traditional VCs who are far more regimented in a process that is not easily accessible to those that haven't already been around the block.[i]  While the traditional VC may have the capital you need to scale your growing company, it's this new group of investors that many of us are choosing for large seed rounds instead of jumping straight to a traditional Series A.

During our chat, one of Josh’s comments really stood out. He expressed regret that given today's high valuations, he has had to pass on some companies that he otherwise would surely have invested in.  It's a sentiment I'm hearing more and more often from some of my favorite investors in Silicon Valley.   Josh subsequently tweeted:

@dsamuel & i have been disciplined about seed valuations in our portfolio.  we aren't the cheapest partners but we work our arses off. 

While I do love seeing these guys continue to hustle and sell themselves, I’m starting to worry about how often I’m hearing this.[ii]

 

***

 

So listen, my fellow founders, I think I know what's going on here:  These are the good days. We're cashing in.  Raising money has been so horrendous for so long, and the processes have always been in the investor's favor.  And now it's our time.  

In the past 18 months, the landscape has changed dramatically.  We now have widely-accepted convertible notes that reduce paperwork to almost nothing.  We can close moneywithout a lead investor.  We can change the terms by the hour, party-round style.  We can use social proof to our advantage through Angel List We can capitalize on traditional VCs who bid up valuations to price out angels.  This is all happening during an up-market or bubble, whatever you want to call it.  The bottom line is, we're fuckin' killing it. 

The problem, though, is that we are beginning to let this shift in leverage go to our heads.  It’s time for us to slow down a bit and check ourselves.  I'm starting to believe that we are more often than not failing to optimize on the right terms in our rounds. 

I know for a fact that many of our best investors are frustrated about this but have been hesitant to speak out on the subject.  Since AngelGate faded away, the seed stage investor community has remained relatively silent on this issue, even though it caused so much (inside baseball) drama in late 2010.  I have no desire to re-hash that incident, but I do think it's time for us entrepreneurs to have a frank discussion about our responsibilities in this particularly founder-friendly investment environment.

My suggestions below are not as well formulated as they are when I speak to more trivial subjects, such as emailing busy people or being in stealth mode.  This is a far more complicated subject, and I don't really have enough experience to understand the larger trends that are at play here[iii].  I'd love to hear your thoughts, pushback, suggestions, etc.—especially if you've been through several of these cycles. 

To start us off though, here are my thoughts on what we should keep in mind while raising bubblicious seed rounds:


Optimize for the right investor
You will have each of your first investors on the cap table for the life of the company. The single most important item on any term sheet is the name signed at the bottom.    You should think a lot about who you want that investor to be.  He’s going to be  present for many important moments in your professional and personal life.  You will depend on him for countless small requests.  You will need to trust him for big picture advice and mentorship.  You will want him to care about you as a person when you're down.

Stop obsessing about valuation
We are all waaaaay too wrapped up in valuation comparisons.  Seed-stage valuation is what head-count was two years ago: the worst way to boast about your company. 
Mark Suster talked recently about raising at the high end of the normal range.   The fact is, it’s often better not to have the highest possible valuation at the seed stage because it means that you don't have to stretch as far to make it to your Series A.  You need to be clear-headed about this issue and not so concerned with bragging to your founder friends about how much your startup is worth on paper.

Take time to build relationships
Make sure you give your investors time to get to know you.  The new style of orchestrating a lightening-fast round is vastly superior to the “old” (i.e., 1.5 years ago) method that took several months to complete.  However, while we've made the process faster, we’ve done so at the expense of building quality relationships with our investors.  Try spending more time talking with investors before you officially begin fundraising.  Be very clear that you're not yet ready to chat about money, but that you want to chat with them anyway.  Take the time to build rapport.

Golden rule
First-time entrepreneurs have a bit of the kid-in-a-candy-store mentality right now.  Money is easy to get, so why not grab it on the best terms possible?  Whether we’re in a bubble or not, we all know that founder leverage will wane in the future.  Most of our companies will invariably experience tough times at some point.  If you're building a big company with several rounds of financing, you need to think ahead to that time when your
 traction will have stalled.  You will need that key bridge note from inside investors or a flat round that doesn't crush you.  If you have your investors feeling like you took advantage of them in 2011, what do you think is going to happen when the tables have turned?

Support hustling investors
Please realize how good we have it with our current crop of investors.  These guys are successful serial entrepreneurs who have found a business model and lifestyle that allows them to use their time, money, and connections to help us start companies.  Meanwhile, the entire VC industry is heading toward 
a major contraction.  The question is, who do you want to win when it contracts — the old school, traditional VCs with their painful, rigid processes or the uber-accessible, hustlin' smaller-scale investors?  Shop at your higher-quality, local market where they remember your name... 

Finally, to be clear, I am not saying that we should be leaving money on the table or treating our share prices as charity.  We should be 100% focused on maximizing our true value, which means optimizing on terms other than just valuation.  If we do that, we as founders will run more successful companies that will, in the long run, make us all a lot more money.

Am I off base here?  Sound off.

 

 

 

Find discussion of this post on Hacker News

******************
I'm Jason Freedman.  I co-founded FlightCaster.  
You can, if you like, follow me on Twitter: @JasonFreedman.
Or send me a Linkedin request or become my bff on Facebook

 



[i] Though, to be fair, many VCs have gotten exponentially better in the last 24 months.  I would argue they have done so in order to compete with Angels/Micro VCs.

[ii] It’s also worth mentioning that there is a surge in the number of startups seeking capital, so guys like Josh can still find opportunities to invest in which terms are, as he says, “optimized for success for both the founders and investors.”

[iii] Rare dose of humility!

Top 10 reasons investors are like high school girlfriends

 


10. They're more attracted to you when you play hard to get

9.   They want to know up front if you're in it for the long haul

8.   They care more about your looks than what's on the inside

7.   They are attracted to guys that are experienced

6.   They talk about you to their friends…and share everything

5.   They're all looking for the next big thing

4.   They play games with your emotions

3.   They're just in it for the money

2.   They'll move on faster than you will



And the number 1 reason venture capitalists are like high school girlfriends:


1.   Can't live with 'em, can't live without 'em!

 

 

 

 

 

Happy July 4th everyone!

 

 

 

 

Find discussion of this post (if any at all) on Hacker News

 

 

******************
I'm Jason Freedman.  I co-founded FlightCaster.  
You can, if you like, follow me on Twitter: @JasonFreedman.
Or send me a Linkedin request or become my bff on Facebook



Please, please, please stop asking how to find a technical co-founder.

Listen guys, I'm sorry.  But, I just can't do it anymore.  I can't keep having this conversation with every non-tech founder.  It's just too painful.  On you, on me, and everyone else that you've approached.  I was once on the search for a technical co-founder, so I can empathize.  

But, seriously, Please stop.   

Back in the day, I remember going to my favorite startup mentor, Gregg Fairbrothers, and asking him for help finding a technical co-founder.  Here's what he said:

I can't help you with that, but all the good entrepreneurs seem to figure it out.  Hopefully you will too.

Man, I still love that answer.  That's being a founder.  If you have a problem, go figure out a way to solve it.  As a professor, Gregg was always teaching me larger lessons instead of just answering my question directly.  The cynic might say that he was punting because he didn't have advice to give.  However, he helped me on hundreds of other startup questions.  I believe he was communicating to me that putting together my team was solely on me.  No additional instruction required...or possible.  That's why I love going back to him for life advice.

But I digress, back to you.  You have a very specific problem which you need solved.  You need to find technical co-founder.  This post is my very best effort to help you think through your problem (and by selfish extension, hopefully to never have to answer this question again).

So, here's the really big mental leap that everyone seems to forget:

You don't find a technical cofounder, you earn one.


And that right there is why I get so bored of this question.  It's not like I can really help you 'find' a technical co-founder.  You have to earn a technical co-founder.  And until you realize that, no one will want to work with you.  

So now I ask you, what have you done to earn a technical co-founder?

And don't say that you're the idea guy. Having an idea is one piece, but it's a very, very small piece.  In fact, it's so small that it's actually better to earn a technical co-founder without the idea in place so that you guys come up with it together.  When neither person has an idea prepackaged with some degree of emotional attachment, it becomes far easier to engage in honest customer development, rapid iteration, and all the other lean processes that will eventually help you find product-market fit.  And more importantly, earning a technical co-founder without resting on the merits of your idea forces you to prove yourself in other ways.  And that's good for everyone involved.

So, here's the deal.  Go out and do all of those things that people always do to find talent.  Talk to friends, talk to friends of friends, go to conferences and meetups, etc. Check out the websites that are always popping up (though they don't generally attract quality).

When you meet people through all these various ways, realize that every technical person has one of three options:

A.) Partner with you.
B.) Recommend you to a friend.
C.) Forget about you.

Your goal is to not continually hit Outcome C.  And the way to do that is to earn their respect. The following is not a recipe you can follow that magically produces a technical co-founder in the end.  However, do a bunch of this stuff and the odds that someone recommends you to a friend becomes much higher.  And each of these steps will both make you a better entrepreneur and move your startup along.

How to Earn a Co-Founder

Learn to Code
Stop everything else that you're doing right now for your startup and learn to code.  If you take the time to learn enough to build some small project, you'll learn the language of talking to hackers, and you'll earn some respect.  99% of non-technical guys looking for a technical co-founder won't put in the effort.   This is your single best way of standing out.  You'll learn to naturally see the value of Hacker News and Stack Overflow.  You'll learn to appreciate how things work.  And hopefully you'll enjoy it, which will allow you to have real conversations with hackers about what they do.  Will Miceli wrote the best blog post I've ever read on exactly this strategy, including awesome links for getting started.  Don't know where to start?  Zed Shaw will get you started.

Build the Front-End
What's to stop you from building the front end of your site right now?  You could get design done with 99 Designs, send it off to PSD2HTML, throw it up on Wordpress, and SHABOW! you've got a website.  Of course, there's no backend, no data, none of the special sauce that'll make your concept work...BUT, you'll have proved that you know how to market your idea and build a beautiful product.  Hopefully, you'll learn a ton about your product, but at the very least you can show an interested hacker more than a napkin business plan.

Throw up a Trial Balloon
I'm sure if you think really hard about it, you can come up with some real things that you can do to test your concept hypothesis.  And I'm not talking about more MBA-type research.  Hopefully, you already know the importance of customer development.  Find a way to fake your concept so that users don't know it's not actually built yet.  Take that front-end you built and funnel interested users into a beta waiting list.  Having real users on a waiting list will help you earn a high quality technical co-founder because you'll be pre-empting his biggest fear: that his work will be a waste of his time.

Build a following
Let's say you're building, for example, an automotive parts marketplace.  Go start a blog serving the automotive community.  They are your future users anyway, and you're going to have to figure out a way to market to them.  What better way than earning them now as readers and later converting them to users?  And use Twitter to your advantage.  Building up a following north of a 1000 people is hard because that's more than just your friends.  Which means you have to say interesting things and share helpful links.  It's marketing yourself.  It'll prove your intelligence and your marketing abilities to your future co-founder.

Spend Some Money
When a hacker joins an unproven, non-technical entrepreneur, he's risking his most important asset: his time.  Yes, you're also risking your time, but you have different risk profiles.  While he already knows he can code, neither of you knows whether you'll be able to deliver as the business co-founder.  You need to prove that you've got your proverbial skin in the game too.  Go spend some money on offshore coders and get a prototype built.  Or offer to pay a salary to your technical partner.  My first technical co-founders started as employees.  I paid them cash from day one using credit card debt.  Over time, I earned their trust, and we became equal co-founders.

If you're a hacker in need of some startup advice, ping me anytime—we'll grab a beer and chat startups.  And if you're a business guy that earned a technical co-founder by learning to code, please tell me about it!  I'll buy you a beer...you've earned it.

Find discussion of this post on Hacker News

******************
I'm Jason Freedman.  I co-founded FlightCaster.  
You can, if you like, follow me on Twitter: @JasonFreedman.
Or send me a Linkedin request or become my bff on Facebook

Pivots are for the lucky. There's a better way.


I had an amazing conversation with Sam Rosen and Dana Levine of Speakergram this week.  Speakergram is a pretty cool company that connects speakers and event organizers.   While talking about a bunch of notable, recent pivots, they shared their new business plan with me, and we talked about whether it would count as a pivot. 

We realized that there are actually two types of pivots.

The first is the classic company do-over.  This is when a company fails at a product and effectively starts their company over with the same team, same cap table, and money already in the bank.  There are fabulous success stories of do-over pivots: Groupon pivoting from The Point, Yelp pivoting from email recommendations, and everyone's recent favorite (in process), Stickybits pivoting to Turntable.fm.
 
Kudos to anyone that pulls off a full pivot.  And if your company is in a similar situation, where you've lost faith in your original vision, then hell yes, you have to do something. But be careful.  I find our perceptions of pivots suffer from a survivor's bias.  While do-over pivots have worked in the past, they're usually not the optimized strategy.   There's a culture emerging in Startup Land where full pivoting is almost part of the strategy. 

Even if you manage your cash flow well, you risk the loss of momentum that is so vital to a startup's life.  Engineers that were recruited under some awesome, bold vision get antsy when the company can't find direction.  Once a company decides to pivot, it becomes a ticking time bomb ready to implode.

 

There's a better way  

Sam used the word veer  to talk about some sweet new ideas he and Dana have for Speakergram.  In the course of building Speakergram, they've landed on some really powerful needs in the market.  Like good entrepreneurs, they've smart enough to really listen to their early customers and gravitate towards their customers' biggest needs.  Through disciplined customer development, they've worked their way towards a market and a problem that is much grander than their original idea.  (You'll have to ping them directly to learn about it...)

While I promised them I wouldn't say here what they're doing, I can tell you that it fits perfectly with what they've already done.  They're going to have an unfair advantage in building it because their current users already want it, it aligns with their brand, it matches their skill set as a team, and it fits the the general vision they sold to their investors.  And yet, it's not some trivial optimization.  It's a 15 degree pivot that allows them to leverage their earlier work for a much bigger opportunity.  It's a veer. 

I have no idea if Sam and Dana will make it big.  I can say, however, that Speakergram will have a much higher probability of success because this is not just some lottery ticket, haphazard, I-hope-to-get-lucky, pivot. 

 

One last footnote:  I usually hate to caveat my own posts, but I should say that there is a perfectly fine time to do a full start-over pivot.  And that's doing it early, before you have investors bought in on a vision.  One of the many great things Paul Graham does during Y Combinator is help founders choose do-over pivots before they get too far down the wrong road.  Watch the FloType interview as a perfect example.

 

 

Find discussion of this post on Hacker News

******************
I'm Jason Freedman.  I co-founded FlightCaster.  
You can, if you like, follow me on Twitter: @JasonFreedman.
Or send me a Linkedin request or become my bff on Facebook

Why are business schools failing at the education of entrepreneurship?

Dear MBA friends, professors, fellow entrepreneurs:

It's time for a real discussion about why our business school programs are failing at the education of entrepreneurship.

This is not yet-another rant about how business schools students suck at startups.  That's been done, over and over again.  I would like to engage you all in an actual discussion.  I have one goal: to help our business schools get better at teaching entrepreneurship.

I judged a business school entrepreneurial pitch event in May.  Teams of hard working MBA students had spent 10 weeks preparing investor pitches for their companies. Faculty were heavily engaged.  Successful entrepreneurs were brought in to judge the teams.  And as I listened to each team present, all I could think about was how silly this all was.  Absolute silliness.  These students' presentations were so removed from what actual investment presentations look like.  One judge told me in the hall that he had seen more entrepreneurial savviness from a 12 year old's lemonade stand.  He was only half-joking.  And this was an elite top 10 program.  What is going on? Seriously, what is going on with our MBA programs??

It wasn't from lack of effort.  They had worked really hard.  I talked to many of the teams and this project was one of the most important activities they had done in business school thus far.  They were truly proud of their hard work.

It wasn't from lack of support.  The faculty were fully engaged and passionate about teaching these students.

It wasn't from lack of good ideas.  Some of these students had ideas that I know could be immediately fundable if done right.  I saw several that had the potential to become big businesses.

Seriously.  What is going on?  I talked to several faculty members.  These are scholars and teachers for whom I hold the upmost respect.  I told them that this whole eship program was a disservice to these students.  The students had not only failed to learn about entrepreneurship, they had learned many things that were just plain wrong, totally divorced from real world application.  This program was not a foundational piece of education that would help them be successful once outside of classroom. It would hurt them.  As in, they would literally have been better off without going through the experience.

 

And here's the kicker.  The faculty members agreed.

 

That's right.  They know.  They know this is awful stuff.  And they're desperate to get it right.  They know that their entrepreneurship programs are an eye-sore, and they want to make changes.  They're turning to alumni for advice.  They're creating strategic steering committees to discuss the problem.  They want solutions.

It's time for a real discussion.

 

***

 

I've been thinking a lot about this for the last several years.  And I've got some opinions to share on the topic.   Let's be real though.  There aren't going to be easy answers.   We need to dive into some tough topics, and I need your help to do it.  For the time being, I'm focused specifically on helping actual business schools.  As a Y Combinator alum, I know that there are other ways to teach entrepreneurship outside of the classroom.  This is my attempt to focus on fixing it inside the classroom. I've listed out a few initial questions I would like to tackle:

1. What are the root causes leading to business schools failing at the education of entrepreneurship?

2. What are the current best practice for teaching entrepreneurship in a business school setting?

3. What solutions can we recommend to business school faculty to help them make real positive change in the curriculum?

I would like your help with these questions.  Please feel free to leave your comments here on the blog or on Hacker News.  Also feel free to write your own blog post and link to it in the comments.  Please email me your more substantive thoughts at humbledmba AT gmail.com.  I would like to find several people that are interested in joining me in a collaborative follow-up post.  Please send me your perspective — I won't publish anything without your permission.

Please also forward this on to your MBA and entrepreneurship friends and colleagues.  I am contacting Tuck, my alma mater, to have some candid conversations with them.  I would love to hear from people at other schools.  I'm going to do several more posts on this subject.

I'm really looking forward to this discussion.

 

Most Sincerely Yours,

 

Jason Freedman

 

 

 

Find discussion of this post on Hacker News

******************
I'm Jason Freedman.  I co-founded FlightCaster.  
You can, if you like, follow me on Twitter: @JasonFreedman.
Or send me a Linkedin request or become my bff on Facebook

 

Meanwhile, just East of Silicon Valley, in Tupelo Mississippi...

I did an unvacation in Tupelo, Mississippi this past week.  An unvacation is my new M.O., in which I travel to someplace fun but don't take significant time off while there.  My old friends Henderson and Rebecca live  in Tupelo, and it was a really special opportunity to spend some time with them.  One of the many great benefits of doing startups is that it's not that difficult to work from anywhere.  So for the last few days, I've been working out of cafes in downtown Tupelo, enjoying the warm Southern hospitality.

I love working from other places because it helps me leave the echo chamber of Silicon Valley.  Within the U.S., Tupelo, Mississippi is about the farthest one can possibly be from Silicon Valley.  My friends Henderson and Rebecca met at Ole Miss (Hotty Totty!).  They've been married for 4 years now and have made Tupelo their home.  Henderson is practicing law and Rebecca is teaching high school, while also working on her masters.  They have rabbits in their backyard, and they look forward to starting a family together. And just like everyone in Tupelo, they think about money.  They save every chance they get.  And while they're not poor, they can't afford to waste.  Henderson and Rebecca are good people, working incredibly hard to build their lives together.  I'm so proud of them.

After 4 days, I'm now heading back to San Francisco.  With a bit of perspective, I've been thinking a lot about what we're all doing here in StartupLand.  Specifically, I'm thinking about our startups and how they are affecting life for Henderson and Rebecca in Tupelo.  There is one moment from this trip that has randomly become stuck in my mind


Before I left Tupelo, we asked a passerby to take pictures of us.  We each handed her our own camera for the picture.  She took the pictures and handed our cameras back to us.  


So I know this is nuts, but whatever, I'm a startup guy.  I immediately thought of photosharing services, of course.  We were using separate cameras!  I thought of all the entrepreneurs I know that are working their asses off to be involved in that exact moment.  Instagram, Facebook, LiveShare, Color, Path, TwitPic, Posterous, and on and on and on...

It makes me just a bit sad.  Henderson and Rebecca asked me all weekend to tell them about what goes on in Silicon Valley.  They felt like I was a window into this world where the future was being written one line of code at a time.  I wanted to tell them about all the incredible innovations that are occurring in startups right now.  Cool, new technologies that will make their lives better in incredible ways.  I wanted to demonstrate something awesome that would immediately play a role in their lives.  And while I did tell them about a lot of cool stuff.  I left feeling like it was unsubstantial.  

 

Is it just me?  Does anyone else feel this way??

How many of us are solving real problems?  How many of us are doing something that is going to improve the lives of Henderson and Rebecca in Tupelo, Mississippi?  How many of us are making something that is going to help them save money or help them make money or help them increase their quality of life?  

It's been 3.5 years since Tim O'Reilly told us all to stop throwing sheep and do something worthy.  He told us that day, "You have to ask yourself, are we working on the right things?"

 

***

I'm glad we've moved past throwing sheep at each other on Facebook.  I'm glad we've moved past acquiring users by downloading someone's contact list and spamming their friends.  The startup ecosystem is much healthier than it was in 2008.  But still, I'm concerned.  As a fellow geek and early adopter, I'm psyched for one of the photo-sharing concepts to really take off.  I think it'll be sweet to instantly share pictures with my friends in cool new ways.  But I know it's not a huge problem for Henderson and Rebecca.  It's just not an issue that affects them.  I'm concerned about how many of us are working on problems that just don't matter all that much to the rest of the world.

This is just a reminder for all of us, myself included, to stay focused on solving problems.  Real problems, not just the ones that ride the current popularity wave.  Build something people want because it makes their lives better.  When we all stay grounded in this focus, we as an entrepreneurial community do great work.  I know it's possible to make money with fads and flips, but the real value for us all is in solving real problems.  

I apologize for being melodramatic, but fuck it, this is how I feel.  Henderson and Rebecca in Tupelo, Mississippi are counting on us to do meaningful work.  I want to make them proud.

 

 

Find discussion of this post on Hacker News

******************
I'm Jason Freedman.  I co-founded FlightCaster.  
You can, if you like, follow me on Twitter: @JasonFreedman.
Or send me a Linkedin request or become my bff on Facebook

The 2-step trick to getting sweet-ass job referrals

 

I talked with an uber-talented 27-year old the other night.  She's been working at the same startup for 3.5 years, helping it grow from 7 employees to over 100.  While she started as a utility infielder, helping out with everything that needed doing, she's now become a sophisticated online marketer.   She's ready to try something new, and she asked me if I could be helpful.   I don't know her well, but I'd be comfortable making reasonably introductions on her behalf. We had the following exchange:

 

Me: What are you looking for?

Her:  Anything, really.  I just want it to be a good a fit.

Me:  What sized company would be right?

Her: I'm comfortable with both big and small companies.  It's more important that I like the people.

Me: Is there a particular industry that interests you?

Her: I want to be passionate about the product, but I'm otherwise industry-agnostic.

Me: So, how can I be helpful to you?

Her: If there are any good startups you'd think would be a good match, I'd love an intro.

 

Well, this just drives me fucking crazy.  I actually really want to help this person.  I also have the ability to help her.  But I need her to help me engage.  She doesn't realize it, but she's making it very hard for me to really provide concrete help (read: introductions).  Because she was flexible about everything, I can't really think of a good contact to offer.  I like making introductions when it feels like there is a high probability of a match.  However, I don't want to waste anybody's time, so I won't help her throw darts at the startup map.  Her inability to make any specific preference decisions makes it sound like she hasn't thought through what she really wants.  I'm thinking in the back of my head:  go figure out what you want, and then come back when I can actually be helpful.  But what I tell her is this:

 

Sounds good.  I'll let you know if I hear of anything.

 

And I won't.  She won't pop into my head again.  Maybe if someone in the next 2 days randomly asks me if I know anyone in online marketing looking to make a jump. Maybe then.  But really, she just lost out on an opportunity to make some real progress in her job search.

And here's the kicker.  She was being 100% honest.  She's done small and big companies.  She's done several different industries.  When she says she wants to be passionate about the product and have a great fit with the team, that's all true!  She has honed in on what works for her.  She thinks that by being flexible, she's expanding her possibilities.  

However, the opposite is true.  She'll have fewer opportunities come her way because people like me can't figure out how to help her.  But there's a trick to solving this problem.  It's not super hard to pull off, and I've seen it work fabulously for many people.  Here's the trick:

 

Step 1: Create a Specific Plan A

This little trick is all about positioning.  Whenever you talk to someone about job search stuff/career advisory stuff, give them a very specific interest.  For instance, tell me that you're interested in joining a seed-stage team focused on mobile payments.  Or a post-Series A startup doing social discounts.  Or a high-growth startup in advertising optimization.  Whatever!  Just make it very specific.

If she had said she was interested in mobile payments at the seed-stage level, I would have immediately thought of several people with whom it would be ideal for her to chat.  I would send a warm intro saying that she shares a similar passion and ask them if they would be willing to chat with her.  These people, regardless of whether they were hiring, would be happy to make further introductions if she impressed them with her passion and intelligence.

And now, she would be making progress.  Talking to great people.  Meeting founders of startups.  This is HOW she'd find that group of people out there that will make a great fit.

 

Step 2:  Create a Specific Plan B, Plan C, and Plan D

Now that you're making progress meeting people related to Plan A, start a new stream of networking around Plan B.  Let's say you're also interested in social discount companies.  When talking to a new person that could be helpful with introductions or advice, tell them that you want to get into social discounts.  Don't make mention of mobile payments.

And presto!  You've got a new stream people to meet.  New startups, new founders, new opportunities for serendipity to strike.  

As long as you're being respectful and not wasting anyone's time, most people won't care that you have other interests.  You can even caveat it a bit if you want to let people know that you have other interests outside of your 'focused' plan.  But don't caveat too much.  One, having multiple interests usually goes without saying and two, the goal here is to present an ability to focus.

 

 

 

If you're one of those talented people that works incredibly hard, has contagious energy, but hasn't quite found the the perfect place yet...ping me on LinkedIn and I'll do anything I can to help.

 

But one final note.  There are some people that seem to network as a full-time obsession.  If you're one of those people and you take this advice to an extreme, you'll come off as unauthentic and untrustworthy.  As with anything, apply some reason and some respectful tact in how you handle yourself.

 

 

Find discussion of this post on Hacker News

******************
I'm Jason Freedman.  I co-founded FlightCaster.  
You can, if you like, follow me on Twitter: @JasonFreedman.
Or send me a Linkedin request or become my bff on Facebook

Don't waste your money on lawyers

When I started my first company Openvote, I asked my lawyer's advice on every legal matter.  I thought it was essential that he be involved in everything that could one day come back to haunt us.  He prepared us with NDA templates.  He explained every detail of the articles of incorporation and the bylaws.  He did an incredible amount of work for us.  He was not the most expensive lawyer by the hour, but we used him a lot.  

I had budgeted $12,000 of credit card debt to get us to a prototype.  The bill from the lawyer before we'd barely written a line of code?  

$9000!  Holy Shit!

Of course, I negotiated it way down, but still, I had screwed up.  It was my responsibility to manage his time.  A lawyer is a service provider.  The entrepreneur has to manage the costs associated with his work.  When we started FlightCaster, I worked incredibly hard to learn as much as I could on my own time.  I figured that with enough blog reading, friend-bugging, and advisor counseling, I could get away with only the bare minimum in paid counsel.  

Funny thing happened though.  All this extra work on my side meant that I could now afford to hire the very best!

You should insist on working with incredible people in all aspects of your business.  If you only hire world-class engineers, apply that same demand for quality to your accountant and your lawyer.  There will be times when they prove their value.  Our legal and financial counsel contributed an incredible amount to FlightCaster's success and I'm certain that, without them, our result would've been substantially worse.  And because I only used them for the most important questions and tasks, their overall impact on our cash flow was actually reasonable.  Most importantly, I put the effort in to self-educate, which helped me make better decisions overall. 

Asking your lawyer questions about general startup stuff instead of doing your own homework is just pure laziness.  And worse, your lawyer will give you advice that is the absolute most conservative strategy you could possibly pursue.  It's like asking the referee how to play football.  You need to learn the game from other players and coaches.  Use your lawyer for the really hard-to-figure-out stuff.

In order to use your financial and legal counsel less, you're going to have to self-educate.  The following links and several weekends of your time should get you started.

Startup Legal and Financial Resources:

This site flat out rocks.  Read every word on it.  Twice.  It'll teach you all the basic of dozens of legal issues that will come up with your startup.  Everything from 83b to vesting to IP.

I just love these guys.  They are doing so much to help the entrepreneurial community, and in ways that are good for everyone.  In addition to running Angel List, they've written and collected some of the best resources on the web.  Everything from equity to board seats to due diligence.

This is the blog and startup resource center run by Brad Feld, of TechStars and Foundry Group.  While there are now hundreds of VCs with blogs, Brad's is one of the most comprehensive set of concrete resources out there.  He also uses Lijit to power search of both his blog and other top blogs.  It' s a powerful way to find high quality, curated advice on any startup topic.  Everything from 409a to financial statements to negotiations.

Y Combinator worked with Wilson Sonsini to create a solid set of equity financing documents that startups and angels can use as templates.  They're neutral, vetted, and free.  Even if you're not using them, reading through them is a great way to educate yourself about all the topics you'll face during a financing round.

At some point you'll need top quality advice to supplement all of your hard-earned learnings.  If you're doing a startup that is poised for big things, I can't recommend anyone better than the professionals we used for FlightCaster:

Part-time CFO: Betty Kayton

Neither are cheap on a per-hour basis, but both are the absolute best value overall.  Please only contact them if you're serious about working with (and paying for!) top quality professionals.

Find discussion of this post on Hacker News

 

******************
I'm Jason Freedman.  I co-founded FlightCaster.  
You can, if you like, follow me on Twitter: @JasonFreedman.
Or send me a Linkedin request or become my bff on Facebook