Liad Agmon – Talk @GreenQloud

Liad Agmon from Bessemer Venture Partners stopped at GreenQloud and gave a talk about his entrepreneurial career, stories and lessons learnt. It was very entertaining, insightful and inspiring. I think we have another potential speaker for Startup Iceland 2013. The one common element through all his talk was the emphasis he put on relationship building. When you are working on a product or service or your startup or another company or whatever end of the day it is always people who are on the other side of what you are doing. Building good relationships and ensuring that you are helping the other is the key to success even in Startups. He has had a lot of success and challenges for someone so young but he has learnt and build character by focusing on people and relationships. The major takeaway for me was to make sure you take the time to turn all stones, meet people, build relationships and hustle when there are roadblock… oh, make sure that you are nice to the secretaries because they are the ones who control the calendars and schedule of important people :). I wrote about the Struggle, Liad’s talk made contextual sense to the overall philosophy of the Struggle. You always have a move, so go and make one.

Here are the links to the first 2 videos:

  1. Starting to write viruses, hacking and learning about Startup
  2. Focusing on building relationship with People
  3. Struggle with the second startup and relief

The Network is the Force – May the Force be with you

yoda-20I have written about how Iceland could be the world’s first Internet Enterprise Zone. It is not a pipe dream of a crazy Indian living in Iceland, although I do not refute the fact that I can be crazy :). Watch the following discussions in the Hacking Society videos. I really believe that we are embarking on a new world that is governed by networks and not hierarchies. It is incredible to see how the evolution of the Internet is spawning new and challenging problems. I believe the only way anything grows is if it can face the challenge and learn to deal with it. I think the Internet Policy framework is a challenge not just in Iceland, but it is everywhere. I think there is enough evidence to show that restrictive policies and regulation never created any social or economic value to the participants. It was Free Trade that liberated the backward countries of United Kingdom and United States of America. I believe it will be those countries that embrace the Internet and provide an open legal framework for the Internet to thrive that will lead the world in the future. It does not matter how small or how big the country is. I remember a scene from the Star Wars movie The Empire Strikes Back, when Luke Skywalker gives up trying to lift the spaceship that had just sunk into the swamp. The reason he gives up is that the size of the spaceship was too big to life… when Yoda says

 

Size matters not… Look at me, judge me by size, do you?

 

The network is the Force, that is spoken about in the movie Star Wars. I did warn you that I was crazy.

 

 

 

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Whats Next – Start Selling

We have a guest post again by Ashwin Bhambri on what the next things the teams should focus on now that Startup Reykjavik is over. I think he has good points and strategies on moving again. It is hard after all the hype and now it is real life, the teams needs to get on the road, meet customersand try to do what I call the hardest of things to do… SELL. I have included the new Startup Curve, which is what typically happens after a big rush of media blitz, everyone wanting to meet with you as the founder and everyone saying how you crushed it in the presentation (guilty as charged!) etc but the reality is that the teams are still in their infancy and they need to go through the Product to Market Fit phase and then through creating a Repeatable Business Model phase and while doing all this they need to build a team culture, develop processes, maintain customer interest and solicit investors if the teams are starting to run out of money. Did I mention that doing a startup is HARD!

Source: AVC.com

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Startup Rekyjavik has been an amazing experience and it’s now come to an end.  As startup founders we are faced with the question where do we go from here and what should be our next move. This is a typical scenario faced by every startup exiting an accelerator around the world

Startup’s move on with investor liaison, completing the product and the tons of other things start-ups do nevertheless there is a one thing that is a must do for every startup exiting an accelerator program. Start meeting customers and focus on sales, I repeat start selling whatever you have built in the last three months irrespective weather its good, bad or ugly

Sales and getting customers is the reality that’s hit me in the face today. I am still hesitant about our MVP and think it’s not refined enough however I do have to take into account that I have just few days left in Iceland and if I dont make an attempt to sell this is going to be a lost opportunity. Secondly, talks with investors are going to be futile if you cannot demonstrate customers interest and last but not the lest you wont believe how big a motivator getting customers is. Taking a page out of the ‘Do more faster’ book authored by Brad Field & David Cohen refer to the ‘Be Tiny Until You Shouldn’t Be’ chapter where a startup failed to raise funding but started selling and got cash flow positive

I have a few sales tips that could work for whatever its worth

  1. When you meet investors, ask them for sales leads. This would build their confidence in your startup
  2. All start-ups share the noting that their product is not ready so engage potential clients by asking for feedback and you can sell to the interested ones down the line
  3. Invite potential customers to attend focus groups. This might be a tough one to pull off but works amazingly well
  4. Contact you mentors and ask them for references
  5. Email marketing works
  6. Don’t forget approaching friends & family
  7. Use LinkedIn, it’s amazing

Would it not be amazing to connect with an investor with the alibi ‘we got customers and need money to service them’ maybe you can help us with that.

Startup Reykjavik 2012 – Done!

I was so pleased to see the participation of the investor community in the Investor Day of Startup Reykjavik 2012. It was a fantastic pitch day, all the teams did a great job… it showed how well they had prepared, their message was powerful and there was passion in their presentations. I am also biased because I was one of the mentors and supporter of the initiative, but that should not take anything away from the teams. The organizers Innovit, Klak and Arion Bank really were committed and it showed. I was very proud in the after party to see everyone enjoying themselves… the community came together. A couple of them were suggesting that I should be the first marathoner to run Reykjavik Marathon hung over! I passed on that fabulous and probably painful idea. Now that the program is done, the teams have been having meetings with the investor community. I am eager to see how the local investor community steps up to the challenge. It is quite interesting that I am reading Brad Feld‘s Startup Communities book right now and he categorizes the Investors community as Feeders in the Startup Ecosystem.

Source: Amazon.com Startup Communities

At the early stage, raising money is hard, figuring out which deals are good is hard, and everything else associated with getting a company up and running is hard, so what’s the big deal? Rather than struggle with this, investors should recognize that they are feeders into the startup community, play a long-term game, and work hard to help support the development of their startup communities.

So I am going to start lobbying with the investor community to take the plunge just like all the entrepreneurs did, write checks without expecting anything back and see how this turns out. I am confident that this will transform the entrepreneurial ecosystem in Iceland. We are starting to implement the strategies outlined in the book by Brad. We did Startup Iceland a conference focused on Entrepreneurship and Startups, I am committed to make this a yearly event. We have Startup Reykjavik, which is a mentorship driven accelerator program to build new companies. We also have regular Hackathons which was initiated in Startup Iceland and in October we will have Music HackDay. I have reached out to the Reykjavik University and they are very motivated to support more Hackathons. Another weekly event that I would like to initiate is Entrepreneurship Book Club, we discussed the Lean Startup book at the beginning of the year and I want to continue on that tradition to start another book discussion. I believe if we consistently do this with a long term vision in mind we will create an ecosystem that thrives on itself. It takes commitment, vision and participation from all the stakeholders. There are many strategies that I have listed here, each could be a blog post. I would encourage everyone interested in building an sustainable startup ecosystem in Iceland to read the book Startup Communities, as Brad covers the story of Startup Iceland and he was generous enough to allow me to write a couple of pages in the book. Here I leave you with the video of Startup Reykjavik Year 1.

Startup Reykjavik – Investor Day

Today we have a guest post by Kristján Kristjánsson, one of the organizers of Startup Reykjavik and CEO of Innovit. I am going to the Investor day in Startup Reykjavik, if you know of an Angel investor in the Icelandic investor community, they should participate in the Investor Day or if you have been thinking about becoming an angel investor here is your chance to get into the deal flow, you should get a chance to meet with other angel and venture investors to build your network and start investing in your community.

StartupReykjavik Investment day – August 17th, go? #Friday

StartupReykjavik is Icelands first and only accelerator program. Ten teams were picked out of 200 applicants, given 16k, housing and mentorship to go as far as they could with their businesses in ten weeks. Every day they have showed up for work to listen to roughly 50 mentors giving advice in business models, networking and pitching, with hope to get their business going to create value.

Next friday (August 17th, 2012), all these teams will pitch in front of an audience of investors seven minutes each, hoping to find the right investor, explaining why that would make sense and showing of their final products that they have worked on during the period.

There are two ways to attend the event.

1. Reception at Arion-Bank headquarters, Borgartún 5, 101 Reykjavík
2. Online live stream from the event.

If you are an investor and would like to attend or view online streaming, don’t hesitate to ask for an invite and we will send you the invitation and live stream link.

Other reasons you should attend?
1. Are you a runner? Icelands biggest Marathon is on Saturday, August 18th. Sign up here
2. Do you like culture? Culture night 2012 is the country’s largest one-day culture event, with thousands activities for tourists and locals alike ending with big fireworks on midnight.
3. The country has some of the most amazing landscapes known to man. If you like the pure atmosphere, in your in for a treat. (video made by one of the participants http://vimeo.com/44193401)

The teams:

When Gone
First and foremost. WhenGone services people who face premature death, people that are losing their health and people that face risks in everyday life. Through when gone, everyone can leave their loved ones their greatest stories, memories and words in person. Thus allowing people of all ages, races and economic level to leave their legacy for generations to come.

StartupVille
Startupville is a place for investors and start-ups to play the investing game. A social game where investors make virtual investments in real start-ups for virtual equity and in the process they interact, get to know each other better and have fun. It’s also about the investor – startup relationship transcending to a real one where an investor gets to be proactive in the progress of a startup

MyMxLog
Mymxlog is a professional online software service for airline, operators and technicians. They enable management of licences, certificates, training and experience necessary to maintain aircraft in accordance with european regulations.

CloudEngineering
Cloud Engineering is a developing advanced techniques to extract data from a wide range of web-pages and other data sources quickly, reliably and robustly, without requiring any specialised knowledge of programming concepts, HTML structure, or regular expressions. And all within your browser ö no installs required. Our customers will be able to extract online market intelligence which will give them a competitive edge in an ever more competitive world.

Designing Reality
A solution based company specialising in Imaging technology and custom solutions. Offering highly accurate and realistic looking three-dimensional models from photographs.

Live Shuttle
Live-Shuttle is a service for smart phone users to share their experience live. The service allows the user share live footage from his travels around the world and friends and family to stay updated on his current location. Upon returning from a trip the user has a photo or video map of his travels. All incoming media is geo-tagged and sorted to provide the world with live footage from every possible location simultaneously which allows Live Shuttle to broadcast live from interesting events like Music Festivals, Natural Disasters or protests to name a few.

RemindMe
RemindMe is an automatic medical dispenser. For medication to be effective people have to take them according to their doctors advice. Unfortunately only 50% of people take their medicine correctly. Remind me intends to increase medical compliance and people’s quality of life by using a new reminding service for the elderly and forgetful.

GuitarParty.com
Provide high quality lyrics, lessons and guitar tabs to users. One stop shop for lyrics, chords and lessons.

Heilsufar
No one is more aware of his health than the individual himself. People should therefore have the opportunity to access their own health related data and be able to make informed decisions regarding those matters. Heilsufar.is will be the portal where you can request your data to be sent to, where you can add your own information and analyse and compare your health situation to others. Heilsufar is about modernising the area of personal healthcare information

Stream Tags
Stream Tags make more value out of the movie experience by giving viewers the opportunity to tag movies and provide information and buying opportunities relevant for the viewer.

2 ways to get an Investor Meeting

Jan Schultink is in Iceland on holiday, he contacted me a couple of months back and asked if he could spend some time with the Startup Reykjavik Teams to mentor them for their presentation for the upcoming Demo Day. I obviously said YES! and connected him to Kristjan. For those of you who don’t know the first batch of Startup Reykjavik will present to a invited list of investors on Demo Day on August 17th. Jan has blogged about it here. I wrote about pitching to an investor. Jan used to work for McKinsey, a strategy consulting firm and I have been very impressed with the firm and the work they do.

Idea Transplant: The Art of Pitching VCs

The fact that he wants to teach us some of the tricks of the trade is huge and I am taking advantage of that. I am planning to be there. Startup Reykjavik organizing team has made it into an open presentation, so if you have an hour and want to participate show up at  Armuli 13 around 11:00. I think we will learn something. I truly believe one has to take time to build beautiful presentations but it is a balance. I have seen enough pitches to know which ones stick and which don’t. The usual format of a demo day is 6 to 7 minutes for a startup to pitch their idea, product and traction. Although it seems like 6 to 7 minutes is not a lot a time, believe me it is more than enough to get an investor to want to meet with you. I have been telling every entrepreneur who would listen that the key to the pitches is to get a follow up meeting. Investment decisions especially in a startup is a lengthy process, you as the entrepreneur need to make sure that you are providing all the decision point data to the investor so the cycle gets shorter. Having someone like Jan help you get that message and content organized properly is extremely important. Check out some of the presentations that he has prepared. They are impressive.

Idea Transplant: Six minute startup pitch

Oh, I forgot to mention what the 2 ways to get an investor meeting… if you have figured it out by now then you get 10 points! otherwise read on:

  1. Presentation has to be beautiful and professional ~ Memorable
  2. Pitch the problem, sell the problem and leave the audience with a bit of your solution and why they need to talk to you more ~ Make them want more

There are obviously many micro strategies to implement the above two big ideas, I am hoping to learn a lot listening to Jan tomorrow.

Managing the Sales Process

I heard once that Sales is not Rocket Science but Harder! I cannot agree more. The actual closing of a sale is an art but that is never the real challenge, the real challenge is building a discipline to create a sales process. What do I mean by a sales process? it is most basic of things Prospect - PresentFollow up and Close. I am very surprised when I am talking to entrepreneurs when they give me excuses for not having the discipline to follow this simple 4 step method. I have seen people pay thousands of $ to attend Sales training classes and walking away and falling back into the same old habit of not following the simple steps. Everyone is scared of B2B sales because it takes time, there are too many departments, legal process is troubling… I think by now you would have figured what my answer is “The Excuse Department is F#$%ing Closed“. There is nothing that throws me into a cursing loop than hearing entrepreneurs giving excuses for how their finger hurts… pullllez! save the crying to your mommy. This is real life, grow up.

Managing a sales process is a skill. The steps that I have listed above are classic, so what do we do in Prospecting? we create a target list of potential customers this is not hard if you know how to work the address book or trade magazines or industry associations or attend conferences. You can get a list of participants, members etc from these channels actually that is the only reason why I attend conferences to meet people and get a prospecting list. Modern tools allow for much more effective way to build this list. Another pet peeve that I have is teams running around in circles trying to identify the perfect CRM System, just use Google Docs or Excel and Email to get the process up and running. There are a number of sophisticated tools out there that basically take more time to learn how to use than actually are useful in the sales process. I will leave the CRM bashing for another day. My advice is pick one and use it, you are never going to find the perfect system. I was taught early in my career that Systems are just tools, its people and their open mind to use system and a process that is needed. Good systems have the process built into them but flexibility is important. I grew up in the age of ERP so following process and configuring systems brings memories that are too painful for this post. There are many simple CRM systems like Highrise or Sugar CRM or anything that is easy to setup and allows you to follow the above 4 steps is good enough to get started. The trick is to stick to one system and use it religiously, again Discipline is the key.

Presenting is again another skill, that is acquired. Effective presentation requires a lot of preparation, thinking, challenging and brainstorming. I usually like to involve the entire team if you have one in the process that way all ideas are on the table and I am usually biased toward facts and data rather than opinion in presenting solutions because opinions can be refuted but facts cannot be. I always follow the Minto Pyramid Principle in making my presentation. I lead with the Conclusion, that always allows the audience to start asking questions on why I made that conclusion, so I follow it up with facts to back up my conclusion. I always try to see the problem from my potential customers perspective and build a presentation around that problem. I do a lot of research about the person, the company and the challenges the industry faces, it allows me to frame the situation, the problem and the solution.

Follow up is the most important of tasks, here I would urge everyone to push for a No. The absolutely worst thing you can have is a Maybe. I usually would like to get a No so I can move on to down my list rather than waste time with a prospective Maybe. Following up is again an art, you don’t have to be nagging but professional and firm. If your prospect gave you time to present your solution and one can gauge whether it is going to be a yes or a no after the presentation. I usually leave presentation meetings with something that I need to share with the customer and follow up with emails to see if there is anything that they need from me to help them make a decision. I provide them with enough information to enable them to sell the solution within their organization. It all comes back to the notion of a Win-Win, I always want my customers and clients to win. If they win, I win. I usually put their victory before mine… Always, it is a life philosophy.

Closing is an art. It is hard work, getting someone to make a decision without being a pain in the back takes skill. But if you have followed the above process closing is not hard. I have no problem following up with my potential customers because I know that I am solving a problem for her and why would I not want to help her? So, in my eyes it is not at all inconvenience to call, email or meet to follow up and get to a decision. I always start with a Win-Win or No Deal mind set. If my customer feels that she is not winning from my presentation and my solution then we just walk away because I desperately want my customer to win and its ok if I don’t close if she is not winning. Oh, there is obviously luck involved but that is never something that you bet you. You follow the steps, repeat it over and over again… thats what the struggle is about.

Being able to present the above steps in a simple report is not only important but it is a report card on how you are doing or how effective you are in doing the sales process. Once again, I am biased toward sticking to simple reports… a spreadsheet that lists my clients in each of the stages with the actual value of the sales, with probability and timeline to close. I keep it updated all the time, makes it easy to present to anyone who wants to know. I find it very hard to understand why getting this report is hard, I know why it is hard actually it is hard if you don’t follow a process and if you are not disciplined. I cannot emphasize enough the importance of being disciplined. You want to Win, well work on your habits and your discipline. Ask all the olympic athletes what is the recipe for their success. There is no other way.

The Struggle

Ben Horowitz wrote one of the most important posts titled “The Struggle”, every entrepreneur needs to read it. I have been watching the olympics the last few days and it has been incredible. The winning, the tears, the national pride and sense of achievement, everything an athlete trains almost all their lives for. I have started to focus more on those who do not win, how do they take it? how do they face that life event? Especially the ones who are expected to win but don’t even finish in the podium. That is what it feels like when one goes through the Struggle as Ben put it. I had an interesting conversation with an entrepreneur yesterday and I know that he is going through the Struggle right now, I wanted to remind him that “This is not checkers; this is mutherfuckin’ chess

Source: London 2012 – Sports World Report, Jennifer Suhr upsets Elena Isinbayeva in Pole valut

This is not checkers; this is mutherfuckin’ chess – Technology businesses tend to be extremely complex. The underlying technology moves, the competition moves, the market moves, the people move. As a result, like playing three-dimensional chess on Star Trek, there is always a move. You think you have no moves? How about taking your company public with $2M in trailing revenue and 340 employees, with a plan to do $75M in revenue the next year? I made that move. I made it in 2001, widely regarded as the worst time ever for a technology company to go public. I made it with six weeks of cash left. There is always a move.

There is always a move! and I cannot emphasize enough how having the focus on what needs to be done to win rather than whats not working is paramount. I have written about The Excuse Department is Closed, I don’t want excuses give me solutions, how are you going to make it work with what you have, don’t focus on what new feature is going to bring customers in! focus on how you are going to hustle to get a customer who has said No to Yes… thats Winning. As Ben puts it while you are driving a race car, the trainers always hammer it into the driver that they need to focus on the road and not the wall, because if the driver focuses on the wall, the probability of the car crashing into the wall increases exponentially. Admit it you have done this, everyone goes through the Struggle, I am sure Steve Jobs, Bill Gates, Mark Zuckerberg and Larry Ellison have gone through the Struggle. It is not how hard Life hits you, its how you react to it and how hard you can get hit and keep moving forward… that is how winning is done! Struggle is a path to greatness, I have been reading and asking everyone who has made it as an Entrepreneur and everyone tells me that you have to go through the Struggle, it is a rite of passage. So,

don’t fight it,

don’t doubt it,

don’t focus on the wall and

don’t think it is all your fault

just focus on the small things that can be done to keep moving forward. Thats how you pass through the Struggle!

Financial Metrics

I have written about my philosophy that “What gets measured gets done!”, financial management is a critical piece in the development of a company. Call me a bean counter but if you don’t have the discipline to manage your finances you will go broke. Believe me I know I have seen it happen right in front of, it is like watching a train wreak in slow motion. So, how does one do financial management in a startup? Brad Feld is writing a new book about it, I am eager to read it when it comes out. I am sure he and Jason are going to talk a lot about user metrics, usage metrics and financial metrics. Tracking finances in an established company is easier because there is a simple method to account for what comes in i.e. Income vs what goes out i.e. Expenses, what the company Owes i.e. Liabilities and what the company Owns i.e Assets. Of course today all companies are required to establish bank accounts which seem to do a good job of keeping track of Cash in the business and how it moves in and out of the accounts i.e. Cash Flow. I have just referred to the 3 basic statements that are used by every financial professional to check the vital statistics of a company:

  1. Profit and Loss Statement
  2. Balance Sheet
  3. Cash Flow Statement

If you don’t know how to read these statements it is a good life skill to learn for everyone. Analyzing these statements is another thing and there is a science and discipline behind it but it has become harder because many companies try to do shenanigans to hide what really goes on in a company, so it takes skill to see the problems, we will not go into that in this post. I think it is one of those challenges and The second challenge with Financial Statements is that they are more the end result rather than the predictor of how a company is performing. I would like to focus on why we need to look at metrics, for me metrics tell a story. Lets consider a startup, if you have a customer willing to pay you for whatever you do then you have solved one of the biggest challenges in building a company. The rest is pure and simple discipline of managing sales, marketing and making sure you have enough cash to get to sustainability. What are the metrics that measure you have a customer? I like how Sarah Prevette described this in her presentation during Startup Iceland 2012 Conference,

A Customer is someone who gives you Money! if you have 100,000 users who are on your website and they are not paying you money for it you don’t have a business you have an expensive hobby

Her talk can be found here. There are 6 things that she talked about metrics and you can live and die by these metrics:

  1. Committed Monthly Recurring Revenue
  2. Cash Flow
  3. Customer Pipeline
  4. Churn
  5. Customer Acquisition Cost
  6. Customer Lifetime Value

All of these are easy to measure and it is not rocket science but harder in a startup. If you are not doing this in your startup, take a time-out and sit with your team and figure this out. It could be the difference between having a failed startup vs a on-going startup.