Startup Advice

Don’t Take Startup Advice... & Other Startup Advice

Don’t take startup advice- that is, except for this.

Jolijt Tamanaha gleaned 7 key lessons from her first founder flop with her startup, Champio. Founders often make great bloggers- when it comes to their successes. Google “How to Get Into 500 Startups” or “How to Close a Series A” and thousands of blog posts from accomplished founders celebrating their wins will pop up, but a search for “Founder Mistakes” often yields cold articles written by tech journalists instead of the failed founders themselves.

Jolijt was a student in St. Louis with a moderately successful startup, Farmplicity, before she started Champio. Jolijt is not a glamorous or wildly successful entrepreneur with a huge track record. She is probably much like you, a young entrepreneur with some good experience under her belt. Her startup Champio is probably much like yours, as an early stage pre-funding company with a beta out. Her advice hits spot on for the vast majority of entrepreneurs out there who aren’t employing staffs of 100 or mamanging cash-flows of millions of dollars. Here are her takeaways summarized below- but please, read her full article on Medium here.

 

1. Solicit a ton of advice & actively ignore most of it

Getting advice from a trusted source is always important- but not because it should be followed. Tamanha writes that advice is “an opportunity to learn about approaches to the problem that you might otherwise not know exist. Never, ever turn to a source of advice in search of an answer. Nobody can give you an answer because nobody has successfully done exactly what you’re trying to do”.

2. Time is King

Instead of instantly committing full time to your idea, Tamanha advises that first an entrepreneur should work part time or come up with some way to provide for themselves as they find product market fit. Unless the entrepreneur has a track record of acquisition then VCs won’t fund a product without a validated market. Ways to do this could be to “work on your startup as a side project while you grow in a full-time position or as a student. Set up sources of passive income that give you a small salary. Charge customers from Day 1. If that’s not possible, start the company as a consulting practice while you finish building whatever it is you need to execute on your main business model”.

 

3. Focus on the numbers

She cautions to avoid getting caught up in customers, advisors, or authority figures bolstering your product with statements that lack commitment. Numbers, like user adoption, activity, and payments tell the real story about product market fit, because “even complete strangers on the subway will tell you what you want to hear”. Numbers don’t lie.

 

4. Hire for challenge-fit

Building a dream team is one of the hardest things out there; without the right team the right product can’t be built. But often hiring decisions are made based on credentials, past experience, or connections the candidate has. Employers rarely screen for attitude, and particularly the type of attitude that is necessary for an early stage startup. Tamanha’s “early stage team needs to be in it because easy things bore them. You will be hit by challenge after challenge and when that happens, you need a team that gets excited. They should to look at you, smile, and say: “let’s figure out how to solve this.” Build a team energized by difficulties and you’ve won half the battle”.
 

5. Celebrate small successes with Champagne*

Many entrepreneurs have a drive-it-forward attitude that can make it difficult to celebrate the small things. As Tamanha writes, “People need to be celebrated. And not celebrated in my improve-some-more-stuff way but just celebrated. With Champagne or at least a cookie.”

 

5. Stop trying to draw a straight line

The ideate-prototype-test-build-scale model for startups is ubiquitous, but everyone shouldn’t get hung up in finding that perfect J-curve exponential growth model. Most startups are all over the place in the beginning, and that’s a good thing. Jolijt assuages, “I am telling you not to give up just because the path doesn’t look like what you had imagined it would when you started going down it. Straight lines exist for lawyers and bankers and TechCrunch journalists, not entrepreneurs. Do what it takes to make the next dot appear, and the dots will eventually connect themselves”.

 

6. Don’t take blind risks

Since entrepreneurs characteristically do well under pressure, often last ditch efforts to buy time or cobble together funding can actually be mildly successful. But the point isn’t to buy another few weeks- it’s to maintain that long term vision that the startup was founded on. Sometimes it’s better to take a step back rather than take the money, especially if there is more desperation than data behind your decision. Tamanha concludes with, “I can’t take an informed risk right now. I don’t need to see a straight line but I need to see the next step, the next dot. The money from family and friends will get us 10 months of runway if I’m the only one working on Champio. And if I’m the only one working on Champio, I don’t see a next dot”.

 

It’s better to refuse the money if you have no clear exit for your investors. They will recognize your honesty and come back later when you’re ready. To be clear, this isn’t Jolijt giving up. She is still working on Champio, just also taking a normal job as well. She hasn’t given up, and hopes the same for every other aspiring entrepreneur out there.

Will the Pipeline Really Bridge the Gender Gap in Tech?

The “gender gap,” or disproportionality of men to women in technical professions, is always a common thread in Silicon Valley.

Despite the rise of tech idols such as Sheryl Sandberg of Facebook and Marissa Mayer of Yahoo!, Silicon Valley is still largely seen as a man's world. The American Association of University Women reports that:

  • Women made up only 26% of computing professionals in 2013 (which hasn’t moved the needle since the 1960s)
  • Women made up only 12% of engineers in 2013

Universities, coding bootcamps, and primary education have been working hard to encourage girls to become interested in math and science at an earlier age. The idea is that more of these female students will decide to major in a STEM field, resulting in a more diverse workforce with a narrower gender gap in a few years.  This is the concept of the “pipeline”, or fixing tech gender representation by funneling a more diverse student group into tech companies.

women-stem_0.png

Hackathon Hackers, with over 18,000 members, is the largest group on Facebook dedicated to attendees of Hackathons. Why? Because the best student programmers attend hackathons, and Google, Facebook, Microsoft, and the rest are jockeying to employ them. Thus, this Facebook group is the best compilation of data on the active involvement of the tech pipeline. How gender is represented in this group will foretell how gender is represented in the tech industry in 3-8 years when these students graduate and go to work.

Megan Ruthven analyzed every post and comment since the birth of the Hackathon Hackers group to answer these.

To do this, she wrote code in python that analyzed all the pronouns in all the posts for male or female representation. For example, a post containing he, his, nephew, Dad, or brother would be male representative. A post containing she, her, niece, Mom, or sister would be female representative. The idea is that if a girl joins the group and sees only posts saying things like, “My brother just got hired at Apple because he and his bros made an awesome app,” then they might think this group was not for them. This measures not just female attendance in tech, but active participation. The results? The pipeline is no cure-all.

 

Q 1) Are Hackathon Hackers gender representation percentages better than industry?

Ruthven found that of all posts that contained gendered words, such as bro or she, only 13.7% contained female pronouns. To compare this to female representation in tech companies: 18% of Groupon’s tech workers are female, while Apple clocks in at 22% and Facebook at 16%. Hackathon Hackers, a snapshot of the tech pipeline, actually has a larger gender gap in their posts than tech companies today.

 

Q 2) Has gender representation changed over time in Hackathon Hackers?

Ruthven took a three month average of female representative posts and found that there was actually no trend up or down. Which means that the amount of content that represents women posted in the group isn’t getting worse, but not better either.

So what does this mean for the tech pipeline and the future for the gender gap in tech? Although many authorities have faith in the tech pipeline bridging the gender gap in tech, because the numbers of women enrolled in technical degrees has risen, data from the largest Facebook group representing the pipeline has shown otherwise.

 

How should the gender gap in the tech industry be addressed if the pipeline isn’t improving? Read the full story by Megan Ruthven here.

 

The Power of Crowdfunding

Written by Draper University Alumni Niti Shree.

Being a startup enthusiast and a budding entrepreneur, I always wanted to attend an unconventional entrepreneurship program in Silicon Valley. (Will be sharing in future posts that why I don’t believe in conventional educational programs). When I was in the middle of “Now what…?” phase, my boyfriend ( a Draper University alumnus himself) asked me to apply. I got the selection email for “April 2015 batch” in Feb.

Two of the Draper alumni (my boyfriend and his friend) were just discussing one day that technically I would be the first Indian woman to attend Draper University’s program. Well, to my surprise I received a call from a journalist friend from The Times of India (The No.1 English daily in India) regarding this. She interviewed me and boom — I started receiving calls from my networks on the eve of International Women’s day (Check out the article that appeared on The Times of India). Now, it was confirmed that I am going. Check out my post on “Why did I choose to go to Draper University”.But the question was “How?”. Only a month was left for the April batch and I didn’t have the visa. The bigger problem was “funds” even though I got a good scholarship amount of 4,500$. I had to arrange for 5,500$. I requested Draper University to defer my admission for the next batch to help me buy some time.For a young professional with hardly 4 years of experience with 3 career switches, there was no chance of the term called “savings”. “Family money” — no way, I stopped that ever since I graduated. There is not much you could expect from a middle-class family for an unconventional educational program like this.

While I was unable to see the way out to make it happen, my boyfriend came to rescue. He gave me the confidence that “Money is the least thing you should worry about. It’s going to happen no matter what”. So, I decided to crowdfund. Crowdfunding was a very new experience for me. I started reading articles on crowdfunding regarding — which platform is good, what approach I should have, tips and tricks etc. Wasted some time on launching as I wanted to be “perfect”. I came across an article on TheNextWeb. Taking inspiration from the article, I finally launched the campaign on Indiegogotitled “Superhero Mission: Everyone’s Personal Stylist” after wasting some time on over-analyzing. I thought ultimately this experience is a step towards my entrepreneurial dream. So, it was titled around my startup idea and in return I was offering perks of PR services. Tried making a video too as a lot of blogs written on successful crowdfunding says that it increases the chances for success. Ended up making crappy videos. So, just designed an infographic of my story on Piktochart. For 10 days, I didn’t reach out to anyone.

Just creating a campaign on a crowdfunding platform does not help you. So, no funds came through in first 10 days. Then, I started sending e-mails to my network. 4 years after college I didn’t focus on minting money, but I did focus on learning and working for the cause I believe in. Helping early-stage entrepreneurs through volunteering for Headstart for over 2 years created a ripple effect of goodwill which I realized during the crowdfunding experience. I probably would have sent 200+ e-mails to renowned entrepreneurs, investors and technologists in India and Silicon Valley. The subject line of the e-mail always remained “First Indian woman at Draper”.I also got small contributions from early stage entrepreneurs who replied to my “Thank you” saying “Come on, if we were at a stable stage we would have contributed a large amount”. It was so touching. Out of many e-mails sent, one of them was to Liz Wald, the former VP, International of Indiegogo. As per her suggestion, I changed the title of my campaign to “Send Niti to Draper University”. In another e-mail to Slava Rubin, founder and CEO of Indiegogo, introduced me to Indiegogo Life and I received a good support from Indiegogo team in seamlessly moving my campaign to Indiegogo Life. I raised 4000$ on Indiegogo. Now, the “perks” were irrelevant. Though I communicated to my backers of support/services at any point of time.

I was still short of around 3000$ keeping in consideration the flight costs as well. I got 1000$ in my account through 3 other entrepreneurs. The biggest contribution of 2000$ came through Meera Kaul Foundation’s woman in technology program which was paid directly to Draper University. There were 36 backers including Meera Kaul and offline contributions. The amazing part was most of these backers were renowned technologists, investors and entrepreneurs from India and Silicon Valley.

With this amazing experience, my belief in myself and my work has gone to a whole new level. I will reveal the names of all the backers when the time is right.

Overall, the journey to Draper University became all the more prized experience because of the amazing backers in my crowdfunding experience.

A 101 for anyone interested in VC

As tweet-stormed by Entrepreneur and Angel Investor, Tyler Willis.


Q: If you were starting as a first-time VC tomorrow - what should you read consistently to improve your thinking & analysis?

Check out the tweet-storm originally located here.

Scott Nolan @ Draper University: How Much of a Difference Are You Making in the World?

scott nolan founders fund at duJanuary 28, 2015 - "When starting something, ask yourself: how much of a difference am I making in the world?" This is one of the truths that Scott Nolan lives by, one which inspires every aspect of his work - both as an entrepreneur and as an investor. This is why, as a partner at Founders Fund, Scott is constantly looking to back founders who work on solving complex problems by building companies working far into the future.

An Inside Look at Founders Fund

"We always ask ourselves this question: How do we make a difference as investors? That’s why we try to invest in  smart people solving difficult problems, especially those working with engineering-driven technologies." Usually, these "big problems" are less crowded places for investors. "When we invested in SpaceX, no one was doing anything like it, and it seemed too far-reaching. But we trusted the team tackling a difficult problem. We’ve created FF Science to make sure we invest a portion of our fund in deep technology that will make the biggest impact in the world."

Scott enjoys working at a venture capital firm that is willing to stand by the founders of their portfolio companies. "At FF, we believe in backing our founders. We have never replaced any founder in the company they started. We always bet on them, allowing them to run the company. We provide strategic support, but we are very hands-off."

When asked about the thought process behind his work, Scott said that FF tries to pick a future winner in an industry. They specifically seek out teams that will be leading a company in an industry that is not currently crowded because it's focus is on reaching for the future, not on current trends. Future and return come hand in hand.

Advice for Startups and Entrepreneurs

scott nolan founders fund du studentsEven as a young entrepreneur with little experience, going after difficult problems will allow a person to have more power when convincing others to be part of a team. Businesses should always think about the scope of what their trying to do; bigger and more complex problems make people think harder, ideate unique strategies, and make themselves more difficult to be copied in the future. "You want to make yourself unique. Find the right time to scale and then scale fast."

Here are Scott's tips for startup founders:

  • Despite experience and background, what matters is what you have done. Why should people join your team and dedicate years of their lives to build a company? How much have you accomplished? The team you build is critical, especially at early stages.
  • Don't work for a company you're not excited about.
  • Don't assume you can't do something.
  • Why you should tackle the difficult problems:
    • You can get more resources/specialization
    • You’re less likely to get competition
    • Motivation to bring talent
  • Ways to create a great company:
    • Create value
    • Capture the market (eliminate the possibility of someone copying it)
    • Build it to last

If you want to learn more from inspirational speakers like Scott Nolan, check out Draper University's entrepreneurship program where you'll meet over 50 guest speakers and mentors from Silicon Valley.

We’re now accepting applications for our Spring 2015 class. Visit our website to submit your application by the final deadline: February 20.

Online Learning: 4 Tips for Staying on Track

February 18, 2014 – The beauty and curse of online learning is that you get to set your own schedule (for the most part). This being the case, it can be easy to fall behind. Draper University Online asks for a lot of your time and energy - over and above what you put into other major life commitments. Draper University OnlineWhen it comes down to it, this is what starting a business will be like. Whether you choose to start your business on the side while you're still employed or take the leap and start full speed ahead, tasks will inevitably pile up faster than you have time to do them. Your experience with online learning in Draper University Online is a great opportunity to practice effective time-management, and we thought we'd get you started with a few pointers:

1. Set deadlines for yourself

It sounds like a no-brainer, but creating systems for yourself is probably the most effective way to keep on track. Write tasks down in your calendar and you'll be much more likely to finish them. Take time this week to plan ahead by carving out blocks in your schedule for your coursework.

Also, feel free to create your own events in the Calendar section of the site. This will be especially helpful for coordinating group activities like this week's virtual business plan meeting.

2. Split big projects into smaller tasks

The biggest projects are often the most daunting. Splitting them into smaller, more manageable pieces will make it easier to get started.

Take, for example, your Rube Goldberg assignment from Creativity. Instead of trying to attack this in one sitting, try splitting it into three separate 15-20 minute tasks: research and planning, gathering materials, and assembling, for example.

3. Make your online learning social

Make a point to engage your classmates, friends, and family about the content and work you encounter over the course of the program. Did one of the speakers blow your mind? Were you surprised by something you read in one of the reading assignments? The best way to deepen your understanding of new content is often to discuss it with others - plus, it can make for great dinner conversation!

Turn assignments like Painting into group activities: invite friends over to paint self-portraits and watch one of the recommended movies together (more great dinner conversation!).

4. Have fun with it!

At Draper University, we believe that online learning can and should be a good time! Starting a company takes a lot of work, so the ability to find an element of fun in every task at hand will make a huge difference in your ability to endure the hard times and make the best of the good times.