Entrepreneurship (Photo credit: Michael Lewkowitz)
Truth is reality. Reality can be distorted when we have wrong maps in front of us. To be part of a startup or running your own business there is nothing more detrimental than not dedicating everything about what is done in the company to truth. I believe Entrepreneurship is a Truth Game. You cannot lie to yourself that your product or service is great when your users don’t want to pay for it. The reality of running out of money hits you like a ton of bricks. Obviously it is hard, building something that is not yet there but getting someone to pay for it with all its limitations and crashes and bugs, but as long as you are honest about the status of things and are continually making progress you are doing the right thing. There is a reason why all investors want to see metrics, because metrics shows the reality of the performance of the team. So what are these metrics? Sarah Pervette, one of the speakers in Startup Iceland had this slide that she stole from Bessemer Venture Partners:
Source: Startup Iceland 2012, Sarah Prevette
These 6 metrics should be in front of every Entrepreneur, you need to measure this, monitor this and make sure that you are tracking progress on all of this. It is very easy to get caught up in the mix of things when you are doing a startup, there are million things you need to do and things are not working, people don’t show up because they are sick, whatever but being honest about the measurement of your business is the most important thing that you cannot take your eyes off from.
got desperate because I got fired from my banking job. Well, maybe… maybe not only time will tell whether this thesis is going to work or not. A lot of my actions towards engaging in the community and starting to push the envelop in Iceland are driven by well proven themes that have worked in other parts of the world. The famous statement made by everyone is “You don’t have a track record of building a startup community or starting a Venture Fund to invest in Startups“, well, that is true but neither did the first man who landed in Reykjavik or Iceland for the first time. Never the less he decided that he was going to live here. A community did get built and for all its flaws and issues Icelanders have a lot going for them compared to many other countries. Anyways, I digress… coming back to Startup Communities, Brad Feld‘s new book titled “Startup Communities: Building an Entrepreneurial Ecosystem in Your City” is out and I believe it is a very clear road map of how to build a community, actually I want to say that Iceland already has a Startup Community and it was very clear to me when I met almost every entrepreneur after the Financial Collapse of 2008. All I am trying to do is to ensure that we implement the strategies outlined in the book. The famous question that follows is “Why are you doing this? what is in it for you?”, well let me think… I really don’t know, I want to follow Brad‘s advice on “Give – before you get anything back”. I have no expectation of what comes out of this exercise that I have undertaken but 10 years from now if we all can look back and say we were part of something that created a culture of entrepreneurialismwhere people living in Iceland or world over believed in themselves and created a sustainable system i.e a company or a business or a community that thrived and contributed to a better society then I think we can be proud of the effort and not only that we would have created a better environment for our children and our grandchildren… we would have created a legacy.
Image Source: TechStars.com
I come back to Steven Covey‘s teachings and the Legacy video that was provided as part of the resources section of the book “the 8th Habit”, I wish they had made it sharable… but it is not so if you want to see the video you need to register with at http://stevencovery.com and go to the Resources section and you should see the video link. I think those videos are inspiring and they are part of the 8th Habit book. Everyone needs to have a purpose in life and that drives us, I think all of us want To Live, To Love, To Learn and To Leave a Legacy. I think the purpose that I have undertaken for myself – “To Start a Sustainable Startup Community in Iceland” more or less addresses all those things. So, I am extremely selfish in being totally selfless in contributing my time, effort and resources… drives everyone around me crazy, but I just have a fire within that just wants me to push forward and I will continue to help any effort to support building a sustainable system in Iceland.
I plan to buy 100+ copies of the Startup Communities book, it should be available in Iceland in another couple of weeks, I think and I want to distribute it to every stakeholder that I think can contribute to building a sustainable startup ecosystem in Iceland. I am not going to stop there, I am going to talk to Brad and get connected with the publisher and make sure the book gets translated to Icelandic so those who are comfortable reading in Icelandic can also learn from this roadmap. The above video is of Brad, talking about the Boulder Thesis in Bloomberg… I think Brad is spot on. We have all those ingredients in Iceland, so what are you going to do to contribute?
I was very impressed with the blog post by Ben Kaufman titled “What Raising Money Means to Me“. I believe personal stories tied to the ups and downs of building a business are always fascinating to read. Ben is young, went through the Paul Graham’s Startup Curve and I believe has had his awakening. You can see it in his passion and language
quirky.com About Team
My grandfather called me to congratulate me on building a successful company. We still hadn’t done shit. We just got some dude to write a check.
Things I have learned from closing rounds & announcing funding:
Be bigger than your round: If the press is only writing about how much money you raised, it’s because you haven’t done anything bigger. That’s on you and your team. Work your ass off to make sure the money is not the news. You should be really fucking uncomfortable if the money you raised overshadows the work you’ve done. It scares the shit out of me every night. Still does. Don’t rest on your round. Fight your round, be bigger than it. Make people forget that time you raised money.
Lead through it: The way you carry yourself through the announcement of a financing has a huge effect on your team and community. If you pretend it’s the coolest biggest deal in the world- they will too. Suddenly, all the hard work they are putting into launching a new product is out-shined by the fact that you got someone to write a check. As some illusion of success is felt, the collective level of hustle will naturally wane.
Be insecure: When I sign a term-sheet, I get angry and uncomfortable. “Shit, ok no excuses anymore–I gotta do this.” There is an immense sense of responsibility. Let your team feel your stress, your angst, your hunger. The passion of all around you will go through the roof. People won’t just throw money at problems, they’ll work with the same scrappiness and drive that got you this far. You don’t have to pretend you’re a big fucking deal. You’re not (yet). Be insecure.
Congratulations: Don’t congratulate people for raising money. That was never the goal. The goal is building a successful and meaningful business. When people raise money, instead of congratulating them, wish them luck. Their work is just getting started.Congratulating people for financing perpetuates a problem that has plagued the startup world. The problem is that that it’s easy to focus on the hype surrounding a company, and lose sight of the fundamentals. This is why our industry is flooded with what I call “startup fuckers.” These are people whose only ambition in life is to raise money, and then sell their company. They have no real interest in building a meaningful and enduring business. If we let startup fuckers dominate, we all lose. Read TechCrunch and any other “deal blog” and you’ll see countless companies boasting about how much money they’ve raised and how great they are as a result. It’s bullshit. They’ve done nothing (yet). Don’t fall into the trap of congratulating them. This is my favorite startup quote of all time (although I don’t know who said it): “Congratulating an entrepreneur for raising money is like congratulating a chef for buying the ingredients.” That says it all.
Put your ass on the line. Lay out clear goals for your users and staff as to what you hope to achieve with this round of funding: why you’ve raised the money, what you’ll do with it, and how the collective performance of everyone involved can be measured. Even if the money is news in the short term, you’ll have something to point to. “Judge me on this.” Some say under-promise / over-deliver. That’s fine. But do promise something, otherwise everyone will make up their own mind about how much your round should let you accomplish.
The above 5 points says it all. I have written a lot about not putting emphasis on raising money, it is distracting and gives a wrong sense of accomplishment. I think every startup should be focused on building something of value, solving a tough problem, don’t give into the hype of TechCruch or the Media although I think the Media and everything else comes to you when you are able to really Execute on the solution to the problem that your startup was founded on. Being an Entrepreneur is always about juggling priorities and ensuring that you are making slow progress but one cannot take the eye from the ball about Executing on the promise to your customer, your partner or your investors. That is what I saw in the post by Ben. Having the discipline to Be Bigger than Raising Money is hard when you are 25, I really take my hat off to Ben Kaufman. I wish all entrepreneurs to learn the same wisdom.
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
When you meet investors, ask them for sales leads. This would build their confidence in your startup
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
Invite potential customers to attend focus groups. This might be a tough one to pull off but works amazingly well
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:
Presentation has to be beautiful and professional ~ Memorable
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.
A framework is more like a guide, it does not tell you how to walk the path but gives you guideposts on what you should focus on. Building great teams is the bedrock of building great companies. I have mentioned many times that when you are investing in a startup, the team matters a lot. Building great teams that execute is an important necessary condition. All other things you can change but the team dynamics is critical, it is hard to encapsulate and constant changes in team members and structure always leads to confusion and delays progress.
I believe the framework build by Jim Collins in his Good to Great book clearly articulates what I mean. The first stage in all great companies before they became great was the build up of disciplined people. Without disciplined people all other things falls apart, what do I mean by disciplined people? I can sum this up in one sentence, disciplined people are those who Make and Keep Promises. It is as simple as that. If you one can build a discipline to do that one can get disciplined in anything. There are a number of qualities that are required to be disciplined, I like :
Relentless
Resourceful
Resilient
Responsible
Respects other opinions
This is by no means an exhaustive list of attributes that comprise the winning team, however it is a good start. Paul Graham wrote a very interesting post about being relentlessly resourceful, he was of course referring to startup founders. I think the concept can be applied to anyone. I would like to be in a team that is relentlessly resourceful, that is resilient ie. when adversity hits the plan the team has a way to stand up and keep moving forward. Responsible is another word that I really like Dr.Steven Covey talks about this a lot in his books, the word responsible can be broken into Response-Able ie. have the ability to respond. Respecting others is not a nice to have but a must have quality. No-one knows everything if you want to win in the market place you need to bring people together who can compliment each others weakness. Thats the way winning is done! I wanted to leave this blog post with words of wisdom from a very famous philosopher Rocky Balboa.
The world ain’t all sunshine and rainbows, it is a very mean and nasty place and I don’t care how tough you are it will beat you to your knees and keep you there if you let it. You, me or nobody is going to hit as hard as life… but it ain’t about how hard you hit, its about how hard you can get hit and keep moving forward, how much you can take and keep moving forward… Thats how winning is done!
As I have mentioned before, guest posts are welcome on the Startup Iceland Blog. We did our first post about a week back. I plan to create a calendar of posts. Every wednesday we will have a guest post, those wednesdays we don’t have a post I will fill the gap. I have been slacking on the blog because of various reasons but as I tell everyone the “Excuse Department is Closed!“, starting this monday we will have a blog post everyday. The title for the blog post is stolen from Mark Suster, he was referring to the sales teams trying to find excuses for not selling products. Anyways, I digress… the blog is going to get back on track. This coming wednesday we have another blog post by Ashwin, who wrote the first blog post. The topic for wednesday is about Angel Investors and how that cohort can dramatically change the landscape of Startups and Entrepreneurship. I attended the open pitch session last thursday in Startup Reykjavik, all the teams are improving dramatically in their elevator pitches, however we need to hit this one out of the park. IMHO, getting the local angel network to participate and invest in the group is the key. I will be working diligently to get everyone who is interested to participate in the demo day.
While I write this blog post my brain keeps coming back to the saying Excuse department is closed. I have been thinking about Annie Thorisdottir, the 2012 Crossfit World Champion from Iceland. She is a huge role model for Iceland and what can be achieved if one is disciplined and trains with a goal in mind. I have not met her or know her but she has put Iceland back on the map for the right reasons. Imagine the odds, the same ones that gets thrown at me when ever I bring the notion that world class startups can be built from Iceland. She was a nobody before last years event, and she was only 22 years old… impressive to be a world champion at that age. I am wondering what excuses she gave herself for training so hard.
We have a guest post from Ashwin Bhambri, founder of StartupVille and one of the teams accepted into the Startup Reykjavik 2012 program. I have offered to open up the Startup Iceland Blogging platform to the community in Iceland. This is the first post and I would encourage all the startups to reach out to me if you would like to use the Startup Iceland Blog to promote a message. The requirement is very simple, it has to be something to do with Startup ecosystem or Entrepreneurship or Startup Community here in Iceland or anything that you feel would help Entrepreneurs and Startups.
StartupReykjavik is Iceland’s first startup accelerator program however quite different from the run of the mill accelerator programs. First of all the investor is institutional, Arion Bank who is also a chief sponsor of the program. Secondly, the program has the right mix of mentoring and coaching with mentors from varied industries across Iceland and in-house coaches from the Innovit Entrepreneurship Centre and Klak an innovation catalyst initiative. The coaches are actively involved in setting deliverables for each startup and helping them achieve the deliverables within the timeline and towards the end of the program lead mentors take over who have repeated sessions with start-ups they feel they can help
It is interesting that the start-ups in this program are not the ‘usual suspects’ and are quite different from the lot you would generally find at accelerators, all have well defined revenue streams and some are even making money. The diversity here includes a hardware device startup, enterprise applications, subscription based services, search technology and social gaming.
The accelerator here also offers the Icelandic advantage – it’s a flat society here so getting an appointment with say the Director of a Large Airlines and pitching your product is relatively easy and fast also you get a ‘Yes’ or ‘No’ quickly. It’s a small place so you can cover ground fast, just amazing for business development and most of all it’s about the people here who are very enthusiastic about the place becoming a startup hub. Also, the accelerator is open to applicants from all over the world
Mymxlog – Mymxlog enables the management of licences, certificates, training and experience necessary to comply with European Aviation regulations.
Cloud Engineering – Cloud Engineering provides data extraction technology. We create tools which will revolutionize the way you gather content from the web
Guitar Party – GuitarParty provides music enthusiasts with a way to learn their favorite songs using a unique user interface, songbooks and video lessons
Live Shuttle – Live Shuttle is a free service for smart phone users where they share their experience Live with their friends, family and the world.
StartupVille – StartupVille is a place for investors and start-ups to play. A social game where investors make virtual investments in start-ups
Stream Tags – Watch movies online with friends via webcam. Now, you can get information on anything onscreen you see or hear and buy it.
Automatic 3D – Creation of high accuracy three-dimensional models using standard two-dimensional photographs and computer vision.
Heilsufar – internet health-bank for individuals. All your health related data in one place including diet and fitness
When Gone – WhenGone is a web based tool to record messages where people leave their last words/advice to their loved ones, to be viewed after passing.
Eski Tech – We are developing RemindMe, an automatic medicine dispenser. Many people struggle with their medicine intake and RemindMe is aimed at making that process easier.
I was listening to Helga Waage yesterday in the Startup Stories organized by Startup Reykjavik team. Helga is the co-founder of Mobilitus, a mobile platform development company. Helga is a veteran in the startup circles in Iceland and is a mentor to many startup entrepreneurs. The other co-founder of Mobilitus is Toti Stefansson, both Toti and Helga were part of the original Oz team which was/is the failed success story out of a startup from Iceland. Helga had a fantastic picture that showed the number of startups that have been created by the original members of the Oz team. It was a great talk, Helga is funny, sarcastic and fearless… I really enjoyed listening to her. The story of Mobilitus is very interesting and there is something that she said that kind of registered with me, I am not sure if agree with her. She said timing was everything, that being a provider of Mobile services 10 years back just did not pane out to be a successful business for Oz but now Mobilitus is having great success with high profile clients like Sprint and Ticketmaster. I agree that you need to provide the right service for the need of the market, but would Mobilitus be as successful if Helga and Toti had not spent the last decade in building things for the Mobile platform? I believe we need to prepare ourselves to be ready when the time is right… I like the analogy of a surfer, it is not about catching the right wave, it takes time to get the skills so you need to practice A LOT, then you need to be in the ocean all the time and when you are ready and you notice the right wave you jump on it. I believe that is what has happened to Mobilitus and Helga and Toti. I think they form a great team and they are in the right sector at this time to take advantage of the opportunity in the Mobile platforms. Change itself happens instantaneously, but preparing to change takes time, effort, skill and patience. Being an entrepreneur is about that building a discipline of being patient working on creating value and constantly improving, so when the right deal comes along you are ready to take advantage of the circumstances. Only the prepared can jump on the moving train, so the advice I took from Helga’s talk yesterday was you need to prepare, be on the market all the time, build strong networks and relationships. I learn a lot talking to both Helga and Toti, they have been very generous to my constant loitering into the Mobilitus office which is next to CLARA‘s office space.
I have been focusing a lot on writing about Entrepreneurs, entrepreneurship and what does it take to succeed as a startup. I think one of the key links in the sustainable startup ecosystem is a steady flow of capital into the startup ecosystem. Typically, in other regions an entrepreneur who has an exit invests the money back into the startup ecosystem and I think that is the sustainable way, so how do you do this when there are no successful exits? or if a region is just starting up or has had a collapse like what we have experienced in Iceland? We need a some Angels, who are willing to invest in a team and are willing to work on making that team succeed. I believe that is what Me and my partners did when we first invested in CLARA in late 2009. I met the team when they did not have a product or a market fit and I mentored them to be investment ready. The jury is still out if they will survive the onslaught of the market but I believe we have a great team and a good market that we have found a fit for our product. Now we just need to execute a repeatable business sales model. Anyways, I digress.. the key is to get new investors into the game. How do we do that? Just like we need new teams to jump into the startup bandwagon we need new investors as well. We cannot always rely on the usual suspects, i.e the Angels who have invested before and continue to participate.
New investors jump in only when they trust a system that is conducive for investing and has a clear education and track record, which according to many people is not the case in Iceland. I disagree but then again I have a long term view of the world so I tend to see things in a lot broader horizon than most people. Yes, there are a lot of challenges, the foreign currency control is a drag, the new bureaucracy in a pain, getting access to capital is even harder than it usually is et cetra et cetra et cetra… but I reject all these notions. They are only important if you are speculating in the short to medium term, I think we need to involve a new breed of investors in Iceland who take a long view i.e 10 years or longer and are not afraid of investing in that time horizon. It does not mean you invest, lock the box and throw away the key for that time period. We need active participation of the investor group in the companies that they have invested in making significant progress in the short term, medium term and long term. We need a community of Investors who can share, learn and contribute to improving the investment climate in the region they are part of.
There are a number of examples of how one put this community together. I got connected in Facebook to John Sechrest who has organized many Angel Conferences and formed Angel Investor groups to invest in a startups. I want to organize an event that is focused on Angel investors. There is a lot of debate on whether rise of Angel investing is bad or good for the startups, all this is heresy. I believe there is a role of Angels and VCs and everyone in between to make a sustainable startup ecosystem to function. What do you think? do you have any ideas or suggestions on how we can get new investors to participate in investing in Startups?
