by tomnora | May 1, 2012 | Angel Investor, Business Development, CEO Succession, early stage, founder, Launch, Revenue Growth, Scalability, startup, startup CEO, venture
This is great! Congrats to Mr. Dao for stepping up to this. Thx @lieslchang for forwarding. I was at that same pitch fest. This is what I call “Harvesting Youth”.
I think MVP is usually MVBS. There are so many things wrong with the current climate. I’ve written about this many times in my blog, often being called a spoil-sport. Many “mentors” are teaching young entrepreneurs the wrong things, in order to cherry pick them for their own projects. They’re being taught to recite stupid sayings like “Killing It” and “Pivot” and “Seed Round” when they’re doing none of those.
A $50K seed round? $25K?
As someone in the startup world for over 20 years it’s sad to watch what the word startup has become, sunk to. A startup is inventing, it’s UNIQUE technology, UNIQUE idea, UNIQUE deployment. A shoe store is not a startup. A startup is something to be nurtured, built, caressed, enhanced.
For the L.A. vs. Silicon Valley comparison, these mini-launches aren’t helping L.A.s reputation. There are some incredible companies growing in L.A., but way too many fake startups.
The other crazy thing going on? Now everyone says “I’m gonna learn to code”. Ridiculous.
@tomnora
The dirty secret behind the incubator boom
by tomnora | Apr 24, 2012 | Angel Investor, Business Development, early stage, founder, Launch, Scalability, startup, startup CEO, Tom Nora
by tomnora | Apr 18, 2012 | Angel Investor, Business Development, CEO Succession, early stage, founder, Revenue Growth, Scalability, startup, startup CEO, Tom Nora, venture
Southern California is going to reach the tipping point. A year ago I wasn’t so sure but now it’s getting crazy. Craig Page @CraigDPage hosted a party 2 weeks ago in Santa Monica that celebrated 500 startups in the SM/Venice ecosystem known as Silicon Beach these days, and he may not be far off.
Then last week there was a Venice Town Hall where you could see that locals are in awe of the influx of startups in their (my) little town by the beach. They’re calling it a Venissaince.
Orange County is growing some amazing companies like @signnow who is attracting Tier 1 VC funding @vkhosla.
Coworking spaces, Incubators, etc. Santa Barbara, Ventura, San Diego, Downtown L.A., on and on. C++ meetups where 100 people show up. Jason Nazar @jasonnazar meetings where 400 people show up! Jason Calacanis @jason Startup interview show @TWIstartups with some of the top startup people in the world, who seem to visit L.A. a lot these days. Google has 500 people here now and is building bike paths in Venice. Startup USC. Startup UCLA. Factual! SpaceX.
I love it. I guess it could happen, So Cal could surpass Silicon Valley some day. Never thought I’d say that. My home town.
Oh well…. 5000 could easily happen. @tomnora
by tomnora | Mar 26, 2012 | CEO Succession, early stage, founder, Launch, Scalability, startup, startup CEO, Tom Nora, venture
“Even in the quietest moments, I wish I knew what I had to do” – Supertramp
[This is about the loneliness of the CEO in a startup. A real startup, that has employees and funding and a going operation.]
It’s late on a Sunday night and you’re sitting alone preparing for the week ahead. It will include travel, employee issues, hiring, firing, product design, cash burn, a new facility, the next funding round and some client and partner visits. You have a great team for your little startup, in management and elsewhere. You have a few “startup whisperers” who advise you from afar, your parents are very supportive. Your spouse shows incredible patience and listens to your war stories every day. It’s not that you don’t love this, you do.
But in the end it’s all down to you. No matter how many people surround you, no matter who great your ecosystem is, being the CEO of a going startup is often a lonely job. By definition, in the final step of making many decisions is you alone making them.
- Others depend on you to do this.
- You have more information than anyone else in the company.
- You get more blame and more accolades for results.
- The outside world looks to you first, wants to talk to you.
- No one is equal to you inside the company you need to maintain your leadership.
So it really is you alone.
How do you improve this situation? Draw from all these resources around you, especially external ones.
- Pick one or 2 board members to get closer to, (pick the right ones).
- Don’t ask for advise or what to do, that will confuse you and they contradict each other over time.
- Find an old college or high school friend who’s disconnected from the business. Or a favorite teacher or professor.
- Pay attention when outside mentors magically appear in your circle; I’ve met some of the best advisors at meetups and coffee shops.
- Read voraciously, not just business or CEO books, but history, biographies. etc.
- Try to mentor a potential replacement even if you’re not looking for that; you’ll learn a lot.
- Use external consultants – management, executive, legal, recruiters to discuss ideas. Mark Zuckerberg hired an executive coach so he could learn to be a leader. The Google founders surrounded themselves with a dozen moentors and advisors.
I’ve found in my CEO positions that optimizing this thinking process can make the difference between success and failure, usually does. Please reach out to me if you want to discuss any of this with me. I’m @tomnora on twitter.
by tomnora | Feb 10, 2012 | Business Development, early stage, Launch, Revenue Growth, startup
Big Revenues vs. little revenues – a strategy question that startups often struggle with. Should we focus on a business model that supports small payments, subscriptions, etc., or look for major large chunks of money from partnerships or strategic investors? There are strong arguments for both types of incoming dollars for a startup, but the correct answer is have both coming in simultaneously; it will balance your cash flow get you through valleys and help you avoid raising expensive equity capital. And will get you more respect all around.
Almost every company with long term success has used this dual revenue plan, throughout history.
little revenues
Many easy-to-set-up payment systems and business models on the Internet have recently popularized little revenues – micro-payments, price per transaction, low cost, SaaS, freemium, monthly payments. Easy to use systems like PayPal, Square, and several other new online cash acceptance systems are hen there are the thousands of derivative companies that are thriving from commissions from larger companies – Google ads, Facebook ads, and the all encompassing affiliate market industry.
I went to an affiliate marketing meetup recently (kind of by accident) and was knocked out of my chair by the size and sophistication of this world. The speaker (Shoemoney) told a great rags to riches story of making tens of millions from affiliate marketing tricks, getting ~$1 to 50 per referral. That’s a machine, maybe one that only produces for a bit, but still and semi-automatic mechanism for short term scalable revenue. He’s been at it for 10 years, so I guess he’s got the long term figured out, too.
Little revenue systems have vastly lowered the barriers to entry to starting a business, no longer must you have bricks and mortar, a merchant account, office equipment or even a staff to do business. It hasn’t decreased the need for innovation, salesmanship or marketing prowess. Many 2.0/3.0 startups are learning this the hard way.
Big Revenues
As a product company, very large injections of cash are always a nice add on to any business as long as they don’t disrupt your business strategy, kill margins or cause you to customize your offering too much. I was with a startup once where we sold our software products for average $500 each generating about $1 million per year, running as fast as we could. I was lucky enough to close 2 large contracts for $900K each within a month, and while we were negotiating a funding round. They were volume sales of standard product so caused no disruption to our processes. Those 2 deals changed our company forever, put us on the map for long term.
In the Shoemoney example above, the ultimate in trickle revenue, he has actually had several Big Revenue transactions, selling entire websites or business models, or taking on expert consultant gigs, all these for high six figure injections to compliment his $20 per click businesses.
In the auto industry, most large companies augment their car unit sales with $ multi-million R&D contracts – Ford, Cadillac, and Porsche get over 20% in extra revenues doing this.
Back to early stage startups. No matter how early, the most sophisticated startups are looking for these Big Revenues from the beginning. They bring on the expertise required to make this happen. It’s often called OEM, white labeling, or strategic partnership, but it’s big chunks of money when you need them most.
I recently met with a respectable high growth early stage startup – increasing revenues, retained all of their equity so far, thousands of customers, even made the Inc 500 recently. But they totally depend on one revenue model for 100% of their revenue, and it’s breaking down. They desperately need the Big Revenue injections before it’s too late.
If you’ve built something compelling enough, there are always larger companies that will welcome you to take their money. Current vs future revenue is very dynamic, two different businesses can leverage each other when their needs compliment each other. Connect or contact me on twitter: @tomnora
by tomnora | Jan 23, 2012 | Angel Investor, early stage, founder, Launch, Revenue Growth, Scalability, startup, startup CEO
This article written by Mark Henderson of Plancast took a lot of courage. The Uphill Battle Of Social Event Sharing: A Post-Mortem for Plancast | TechCrunch http://j.mp/wCnYov
By putting the words Post-Mortem in the title he made it very clear that the company is failing, a shocking move in our current startup world. So many companies/people/vcs pretend they are succeeding when they are stuck – can’t scale revenues, especially over the past 5 years or so. Once they finally shut it down they often still claim success, or invoke the over-used “pivot” panacea.
By calling it as it is, Mr. Henderson allows a true discussion about what went wrong and other strategies that could possibly change the fate of Plancast and other startups in the same position. He is also helping other startup leaders and investors to possibly follow his lead of raw honesty, so this industry can focus more resources on a smaller number of companies that truly have something special and defendable. That helps people to better learn how to do it right, contribute to bigger better businesses, create profits.
In several of my past postings I’ve touched on this problem. It’s endemic to the startup world right now, and can’t lead to a good future. Of course startups always have a low probability of success anyway, but this current environment of pretending like every company that gets angel or super-angel seed funding is made up of geniuses with genius ideas is a house of cards. Articles like that above could start the process of correcting the market back to realism and eventually streamline resources. Mark has put his ego aside and done a great service to all of us. And who knows, by publishing the companies issues he may crowd source some answers (and funding) to actually save his company.
Here are some of the comments people made about this article:
“I hope TechCrunch publishes more well-composed articles like this in the future.”
“This industry is lacking such honest analysis. Thanks for keeping everything so real.”
“I greatly respect you posting this as a way to help others learn when you could have just disappeared in the startup abyss.”
Ii looks like the beginning of several who will come forward soon. What’s the lesson here? I guess more journalists should launch startups. @tomnora