“It’s a Feature, Not a Company” – Build a Company

by | Nov 19, 2012 | Angel Investor, Business Development, CEO Succession, early stage, founder, Launch, Revenue Growth, Scalability, startup, startup CEO, Tom Nora, venture

This is a line that was pretty common in Silicon Valley until recently. Steve Jobs even (ab)used that line on Dropbox when trying to buy them out of the market (They turned him down.)

Now that’s all changed, for the moment. The threshold for “company” status is very low, including the following list of minimum pieces at their lowest cost.

1) a url – $10     2) incorporation – $200      3) Internet – free      4) build a website – free      5) development tools – free     6) office space – free – home, starbucks, hipster coffee shop

In other word, the barriers have dropped if you’re willing to do most things yourself, which is a good thing. You still need an amazing idea , business model, some focus from a developer (critical!). You can create a single feature “disposable” company, nothing wrong with that, it’s a learning experience, fail fast, etc., it might even create some value and get acq-hired. And It’s a lot better than talking to folks for a year about an idea that never materializes.

But that’s not the way to create a company that can live and grow for years. In doing that you have to be honest with yourself, make some sacrifices and seek continuous enhancement of your entity. In the world of easy startups, everything is a startup, people drink their own koolaid too much.

Here are some great ways to maybe move into higher ground:

  1. Seek outside criticism and listen to it. Put on your flack jacket and let ’em rip you up. Be open to changes but don’t be a wimp either. You may see something nobody else does, but listen.
  2. Pay those you ask to help you – money, equity, trade services, something meaningful. Give them incentive to help you think straight. Make sure you pick the right mentors with track records. Never ask for something for nothing, you’ll get what you pay for and a bad reputation fast. Better yet, pay it forward. This is an area where strong developers actually have a lot to trade these days, but usually try to do everything themselves. Not likely to succeed.
  3. Diversify – get people difeerent than you involved as team members – different genders, races, ages, expertises. Here’s a great 3 minute talk on this by Stanford prof Kathy Eisenhardt  http://j.mp/UaVjky

So look for the opportunity to build a company, share the wealth, and seek higher ground.

follow me or DM me @tomnora

The Executive Summary; Loosen Up a bit.

by | Aug 10, 2012 | Angel Investor, Business Development, CEO Succession, early stage, founder, Launch, Revenue Growth, Scalability, startup, startup CEO, Tom Nora

 

1. The Executive Summary

I often get inquiries about getting involved in early stage companies here and around the country.

The beginning point to discussing a startup the Executive Summary of the company, which lays out the key facts about a startup in 1-2 pages. But I’ve noticed that in L.A. it’s the exception rather than the norm, people want to meet first. Real investors don’t usually work that way.

The Executive Summary is CRITICAL to getting prospective investors excited. Without it you have little chance of getting the next step – a meeting to discuss the project and funding, more team members, more ecosystem. It’s a key qualifier as a serious player in the startup world. You hardly ever see a Silicon Valley startup without one, no matter how early stage.

The pitch deck has replaced it lately, but that takes more time to read and it’s harder to find the key info quickly. (One exception to this is the deck Hank Cho sent me; one of the best I’ve seen in a while.)

So google “Executive Summary”, look at several and put one one together. Send it to me and I’ll critique it for you. Make it less words, more impact, numbers, facts, the team.

It will also show where your holes are.

 

1. Let’s Loosen Up

The current startup scene combined with our poor economic/job situation is causing many people to panic a bit. It’s understandable, but if it transfers to your persona as a startuper, it won’t help. Many people I meet are very rigid, look a little scared but fake a smile, unable to open themselves to criticism. This doesn’t get investors excited.

Sometimes a 20-30% change or add to your business can make a major difference. Not a complete pivot, that implies 90-180 degree change, but be open to suggestions by those who’ve been there before. Maybe change your name, change your graphics(!), merge/acquire/acq-hire, drop yours for another better one.

Let go of your ego, let go of some equity.

The goal is to build long term sustainable businesses and revenue streams. Add smart people to your circle for the bigger good of the company. Loosen up, smile, have fun. But make some money for everyone involved. Be better.

@tomnora

Is #NewYork the Next Startup Land of Oz?

by | May 29, 2012 | Angel Investor, Business Development, CEO Succession, early stage, founder, photography, Revenue Growth, Scalability, startup, startup CEO, Tom Nora, venture

A few things have happened recently to cause me to look a little closer at NY for the next amazing companies in Internet technology. First, a friend announced that they were moving their startup geo-lo based company from L.A. to New York; Second, I caught the recent live stream of the Disrupt NYC Hackathon; Third, A New York Times article about how NYC’s “allure” is increasing.

I know, it’s a very expensive place to live and do business, lots of traffic, etc. I’ve done it before. But if a Tipping Point could be created there it could over come the costs. Here are some of the factors:

(1) Amazing Engineering Skills – Let’s just start with the big one. There is a highly under-known fact in the software engineering world – many of the best developers and architects are not in Silicon Valley, but in the New York metro area. Between AT&T, the Financial houses and all the great local engineering schools they’re not only the best but there are a lot of them. C++ and Object Oriented design were invented at AT&T, and there are many more examples. New York developers have less attitude, more performance. They’re expensive , but a very large and strong group.

(2) Long Term Scalability – See #4 below – Over time, s a comapny tries to get into a rhythm of continuous growth, they need to develop a reliable growth model. To do this you need human resources beyond techo-nerds – sales, marketing, strategy, bus dev. These people abound in New York. You also need infrastructure and friendly government. Again, New York blows California away here.

(3) Mentor Network – Retired Fortune 500 executives, Harvard/Princeton/Yale scholars, Financial Industry experts, many successful entrepreneurs.

(4) Respect for BUSINESS – Sales, Marketing, Advertising, Strategy were all practically invented in NYC.

(5) Diversified Portfolio of Industries – The best startups draw from several disparate industries around them to be able to grow and learn and diversify. New York is the Fashion, Financial, Art, … (fill in the blank) capital of the world.

(6) Spirit – Nobody has has the same type of spirit as New Yorkers; you know this if you’ve ever been there, especially if you’ve done business there. It has some kind of magic in the air.

(7) Night Life – Many budding high technology centers aren’t the best in terms of top cultural options and the best restaurants. Well, New York… no need to explain.

I could go on, but the combination above is plenty for a startup tipping point. Just watch the Disrupt videos, they’ll give you a glimpse. I’vealways loved New York and doing business there, even though I’m a born and bred Californian. Now they’re heading toward my niche, very exciting. Maybe Zuckerberg should’ve put Facebook there instead of Silicon Valley. Maybe FB stock would be going up instead of down right now.

[Facebook Stock Could Fall Twice as Far Before It Hits Bottom]

@tomnora

It’s The Profit and Growth, Stupid.

by | May 24, 2012 | Business Development, CEO Succession, early stage, founder, Revenue Growth, Scalability, startup, startup CEO, Tom Nora, venture

I’m paraphrasing a Clinton/Carville line “It’s The Economy, Stupid” in the title above. They used this to win the 1996 election by rallying people who were tired of such a weak, debt ridden economy. Sound familiar?

The Bubble Begins To Pop

Today it was announced that Betterworks is shutting down after $10.5 million in investment and 18 months of operation. Incredible but not. Around town people have been saying that BetterWorks is one of the strongest startups in L.A. They actually threw a party a month ago “The Silicon Beach 500”, celebrating the amazing growth of local startups.

Betterworks is one of many companies these days that aren’t really companies, they’re an idea, good hype, the ability to trick the public while they’re trying to work it out (We’re doing Great, We’re killing it. We’re hiring.) and the arrogance to say we don’t need any help. I could name another 20 startup in L.A. alone that are in the same boat – they are failing and will shut down eventually, but right now are promoting the facade of success and growth when they’re not either. I won’t names names, but I see their ads on the web. “we’re growing”, “dog friendly workplace”” We Love Startups!”. What about REVENUE and GROWTH and PROFIT and PREDICTABILITY? These are the definitions of Scalability.

Currently early stage startups all want the Facebook model – L U C K. Mark Zuckerberg invented something by accident that grew so far beyond his wildest dreams that it could cover a thousand mistakes. He got funded while wearing jeans and a hoodie. But eventually Facebook had to make Revenue and Profit. Be Scalable.

Most companies aren’t like that. They require good decisions and actions DAILY for YEARS.

Betterworks actually has/had a great idea, they just didn’t quite know how to properly build a business for the long term, and refused to listen to advice. I know that’s harsh, but another few hundred companies are doing the same right now. These companies stifle innovation, not promote it and teach the wrong skils – they need to be called out.

The result will be thousands of pissed off, unemployed people sitting on the beach in Santa Monica wondering what the hell happened. After the 2000 crash Profit and Revenue came back into style, spawning and reinforcing real companies like Google and Salesforce.com which are Profitable and Grow. 2013 will repeat the cycle, so let’s all change our thinking, get back to basics, put the egos aside and respect the expertise available to us.  Contact me if you’re in this camp. @tomnora