The Entrepreneur’s Guide to Conflicting Advice

Joe Heitzeberg, AKA Aquaman (@jheitzeb) is a 500 Startups SuperMentor and Chief Piston at MediaPiston, a new crowdsourcing platform for content projects (pre-launch).  Prior to MediaPiston, Joe was the CTO at and co-founder and CEO of (acquired by in June 2008).

Congratulations!  You’ve decided to take the startup leap.

One of the best parts? Having 1:1  access to incredibly successful people (especially if you’re working with 500 Startups!)

One of the challenges?  Making sense of conflicting advice.

I polled some friends and fellow entrepreneurs and they all agreed — you’re going to receive 180-degree conflicting advice on just about every aspect of your company.  I’m not just talking about advice from wantreprenuers, armchair quarterbacks, bankers-who’ve-never-run-companies and your mom. I’m also referring to advice from very experienced entrepreneurs with multiple successes under their belts.

So here it is: The Entrepreneur’s Guide to Conflicting Advice!

#1)  Remember, it’s your company
You’re the rainbow-chasing entrepreneur.  More importantly, it is you who kissed your day job goodbye, raised the money, convinced others to join you and it is you who is ultimately accountable.

Nobody knows your business better than you do.  Others will have ideas and opinions about what you should do, but ultimately you’re the one that has to decide, follow-through and ultimately live with the consequences.

#2)  Be goal-driven
There is no recipe for how to get a startup off the ground.  Each company is unique and no one piece of advice is universally applicable in all situations.

Most advice can’t be followed like a recipe.  It is more important to stay focused on your goals.  If advice isn’t adapted to solving for the situation at hand, it probably isn’t helping.

#3)  Get fanatical supporters (not advice-givers)
This blog post isn’t about how advice is useless, or that you should go it alone.  Au contraire – surround yourself with SuperMentors, advisors and investors who are aligned with your goals and who believe in you and can bring out the best in you — by applying relevant experience to your particular challenges — now and in the future.

This often means “advice” but more importantly it means having a cadre of fanatical supporters who are problem-solving and helping with your particular goals.

#4)  Don’t get bogged down
As has been said plenty of times before (and by the always awesome Mark Suster), Avoid Decision by Indecision.

To help you avoid this, with the help of some startup CEO friends, I’ve compiled a handy list of commonly conflicting advice — so you can quickly recognize when you’re getting advice that may not be tailored to the particulars of your situation. When you come across these and don’t know what to do, remember to review your goals and get into problem-solving mode to make the choice that’s right for you.  At least you’ll know you’re in good company.

Here they are….


1)  Take the money if and when you can get it  vs. Only raise what you need, delaying as long as possible
2)  VCs don’t steal ideas  vs.  EIRs only attend in order to steal ideas
3)  Founder liquidity is insane  vs.  Founder liquidity is required
4)  Get funding from local / hands-on VCs  vs.  Get funding from Bay Area VCs
5)  Don’t talk to VCs until you’re ready  vs.  Start building relationships before you quit your job
6)  You must show the hockey stick  vs.  They all know the hockey stick is BS

“I was fooling no one but myself by pitching the hockey stick ramp. I had no clue how to execute against it, had no demonstrable success at scaling a business rapidly, and my assumptions simply couldn’t be supported by what I was already seeing in the business. That was a pivotal moment of truth which drove me to go after angel backers and to concentrate on building a niche media business that’s setup for continued growth without requiring new infusions of capital.”
— Tom Seery, CEO of RealSelf

“It’s like Animal from the Muppets yelling ‘Take money, take money!’ I think it stems from wanting to do something big (and wanting the corresponding salary that comes with a $10m raise?).  But I personally feel like it limits your options. There are a slough of people who say that taking any money is totally selling out and there are plenty of companies that took loads of cash who effectively killed all their positive exit options by driving up the cap table so aggressively.”
— Galen Ward, CEO of Estately

1)  Make sure you have a big and clear vision vs. Vision is hot air, just do experiments
2)  Follow a big vision / market vs. Stay focused on a niche and grow
3)  Change the world vs. Follow the money

“The vision thing was the most interesting one for us.  One set of investors told us to drop the big vision stuff from our deck and focus on our tactical plans.  When we did that, another set of investors told us they didn’t care about the tactical details and wanted to know what big important problem we were working on. Ultimately, we decided the important thing was to be true to our own entrepreneurial motivation (attack a big, important problem) and let investors self-select in or out depending on whether they were aligned with us.”
— Blake Scholl, CEO of Barcode Hero

“We’ve received a lot of conflicting advice over the years about the direction to go with our product – concentrating on a niche or being broad but shallow. It’s surprising how many entrepreneurs, investors and even customers differ on the fundamental roadmap of the company, but I suspect the truth lies somewhere in between. It’s likely true that both paths have great opportunity, but straddling the fence is where we’ve gotten into trouble. As a startup, you have to make a call and stick with it, one way or the other.”
— Rand Fishkin, CEO of SEOmoz

Product & Marketing
1)  Get a lot of users and figure out monetization later  vs.  Make money from day one
2)  SEO vs. Viral vs. Social Media
3)  Follow your vision vs. Let customers guide you
4)  Be a platform first  vs.  Be an application first
5)  Design is everything  vs.  Just look at craigslist
6)  Find a working viral loop and build a product around it  vs. Products with high short-term virality often have no future

“Everyone talks and raves about viral/social marketing.  I think it’s enormous, especially for abusive/violating apps from the likes of Slide/RockYou/etc.  But, for real value-add apps like we aspire to be, it’s about getting real recommendations (i.e. links) from fans of the service that we’ve created.  Most of SEO is actually just getting real word-of-mouth (i.e. links) from people who really value your service.   That stuff is really hard.   Most people don’t appreciate how hard that is.”
— Dave Schappell, CEO of TeachStreet

1)  Build a balanced team up front  vs.  Bulid a solid dev team, bring on marketing later
2)  Bring on the grey hairs  vs.  Tech is a young person’s game
3)  Hire your friends  vs.  Never hire your friends
4)  Must work 24×7 in order to win  vs.  It’s a marathon not a sprint

“I tend to think passion comes first, and people work very different ways.  If you want everyone to be the same, you will be severely disappointed. I think you are much better off to set high goals, hold them accountable, and let people find out their way to hit them.”
— Darrell Cavens, CEO of

“We are big believers in hiring for a startup the same way you’d hire if you were going off to war.  Brace for the fact that the situations you will encounter together will be much more difficult than you expected, make sure your team is smarter and better equipped than you are, be sure the person to your left and your right are people you trust with your life.  Whether they are your friends or not when you start this journey, make sure they are your friends when you end it.”
— Keith Smith, CEO of BigDoor

1)  Build a strong in-house dev team vs.  Save money by outsourcing everything
2)  Hide your secret sauce  vs.  Be open (it’s all about execution anyway)
3)  Hack prototypes vs.  Test driven development for everything
4)  Open source vs. Microsoft .NET (etc)

“We chose to use WordPress as our display engine instead of writing our own.  In the long-run, that’s added complication.  In the short-run, it allowed us to get to market faster which enabled us to build a sustainable business before the end of our runway.  Continuing the airplane analogy, had we insisted on building for the long-run, we most likely would have never got the plane off the ground.”
— Scott Porad, CTO of Cheezburger Network

Business Development
1)  Just build an API   vs.  Hire a well connected deal-maker
2)  Never partner with other startups  vs.  Partnering with big companies is a distraction

“Sales is for revenue.  Bizdev is for valuation”
— Mike McCue, CEO of Flipboard (via Twitter, @mmccue)

1)  Design your launch around TechCrunch  vs.  You’re just feeding your ego
2)  The CEO must be your voice   vs.  Great PR firms make all the difference
3)  Press releases are dead  vs.  PRWeb/PRNewsWire/PR/PR/PR!
4)  Be secretive, don’t share anything   vs.  All PR is good PR,  you need it for hiring and marketing

“Why people share everything they are doing at conferences and in PR again and again is beyond me.  I guess if you like seeing your name in lights and that is the definition of success then OK. I would rather obsess about the customer, deliver great things and success will come.”
— Darrell Cavens, CEO of

1)  Just focus on building your company  vs. Plan your exit from day one
2)  Any exit less than $100m is a fail  vs. Maximize everyone’s odds of cash in bank
3)  Use a banker to sell your company  vs.  Never use bankers to sell your company

“We’ve always tried to build businesses that have a solid foundation and will hopefully stand the test of time.  I try to live by the axiom: ‘run your business like you will own it forever…or else you will.’”
— Keith Smith, CEO of BigDoor

1)  Ignore competitors  vs.  Dissect the competition and position yourself

“There’s two schools of thought about competition.  The ‘Compete’ school know their competitors’ products as well as their own and focus obsessively on outdoing them.  But I’m an adherent of the ‘Ignore’ school.  My new company, Sparkbuy, is in a ridiculously crowded space that peaked 5 years ago.  Thousands of competitors.  But I pretty much ignored them all.  Call it arrogance or ignorance, but I feel like the best startups keep their eyes on the goal, not the other runners.  I did circle back and make sure I wasn’t re-inventing the wheel, but my main investment in competitive research was to fill out a slide in the pitch deck.”
— Dan Shapiro, CEO of Sparkbuy

Making the Leap
1)  Get 5 to 7 years of experience at BigCo first  vs.  Do it now before you’re tied down with mortgage, kids, etc
2)  Get in the game / move to Silicon Valley  vs.  Stay out of the echo chamber / stay where you are

“Startups are a bit like harnessing tornadoes…there’s not too much else you can do to practice.”
— Terry Angelos, Co-Founder of TrialPay

Good luck!

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How to Interview a Designer

Written by Jason Putorti, a 500 Startups SuperMentor, Venture Advisor and Founder of Votizen. The post below is cross-posted from his blog.

These are the tenets I give people when they ask me how to evaluate a user experience designer for their startup. It’s not perfect, it’s not a guarantee, but this is my approach:

  1. Visual portfolio. Gut check ‘yes’ or ‘no’. Either you like it or you don’t. If you’re not sure what good is, my first filters are information priority (are the first through fifth most important things on the page obvious from the visual weight), information organization (are related ideas near each other), intuitiveness (what you’re supposed to do next), and clarity of copy.
  2. Process. “This portfolio looks great, how did you get there? What problem were you given? How did you approach solving it? How did you iterate from idea to final product? How many concepts did you try? How did you decide which one to go with? Who was this designed for?” And so forth. The key here is to derive a rational, thoughtful design process that balances business needs with user needs— and empathy with those users. This separates designers from artists making pretty pictures.
  3. Intellectual curiosity. Nobody knows everything about design, or anything else. “What do you read? Who/what inspires your thinking around user experience? What’s an example of a good user experience and why? How will you improve over the next year?” Granted you need to know some things up front, such as the definitions of user experience, design thinking, and perhaps something about various design philosophies like user-centered, activity-centered, etc. Wikipedia is your friend.
  4. Trial and error. Give him or her a UI component to redesign, or present a problem you’ve been facing and ask for some ideas on how to solve it. I feel a discrete UI component is reasonable, not a redesign of an entire page UI. Deliverables should be low fidelity sketches. Adaptive Path actually teaches that 10-15 minutes is optimum for sketching rough interface elements on a 6-up template, with no more than a few minutes per concept. They haven’t found that significantly more time improves the end-result at all. An exercise like this could even be done on the spot, or you can treat it as a take-home.

This being said, I’m not sure if I would have nailed this test when I was hired at Mint in early 2007. I had the portfolio (but no consumer UIs), I had an engineering background so I could build what I designed, but my process was immature, and my user experience understanding was lacking. However, I grew in the job, learned from everyone around me, from practice, etc. So I think these principles will allow you to compare individuals with a common framework, but if you find someone smart, passionate, a culture fit, and hungry for a win, you might get more than you expect.

P.S. I cross-posted on Quora if you’d rather join the discussion there.

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Still A Lot Of Love In Your Inbox

Posted by Jared Goralnick, founder of AwayFind. In addition to being a 500 Startups Founder, he is also one of our SuperMentors.

Last night 80 people gathered to talk about email at the launch event for Inbox Love.  Turns out that this bleeding-edge 1970’s technology is still in use.  I was lucky enough to organize this alongside 500 Startups and OtherInbox’s Joshua Baer.  We’ll be back together in the spring for a full day, action-oriented event in the Spring.  Stay tuned.

Here’s a quick a rundown, and some of my own thoughts on the email space today.

The Rundown

We met up at Google’s Building 40, had some drinks and snacks, and then sat down for a series of 5-minute Ignite format talks.  Between the talks we had moderator-led discussions at our tables over dinner.  Here were the talks from the evening:

  • Stephanie Hannon, the former Product Manager of Google Wave (now PM at YouTube) explained what went wrong and offered lessons-learned from Google Wave.  High email-killing expectations and an ecosystem that didn’t have all the people we communicate with were some of the challenges.
  • Ben Gross, a Researcher at the Highlands Group and Editor at Messaging News, explained many of the myths about the connection between identity and email.  We learned that some people have many email addresses and that the technical audience in the room may have a bit to learn about designing tools for how people segment their email identities.
  • George Bilbrey, President of Return Path, discussed what he’s seen as trends in spam and the challenges we face with graymail, (also known as bacn)—the stuff you signed up to receive but may or may not want in your inbox.  He also offered suggestions for where email may be headed.
  • Bijan Marashi, co-Founder of Xoopit (which was acquired by Yahoo), told all of the startups in the room that they had their work cut out for themselves.  He outlined the challenges in an email startup, from the difficulties entering a platform to the conflicting interests between the large email providers and small startups regarding both advertising and holding user attention.
  • Gabor Cselle, whose company, ReMail, was purchased by Google, where he now works on the Gmail team, explained what was wrong with IMAP and what should be changed.  He explained his proposal for ReMap in a technical but very clear presentation.
  • Dave Crocker, who was one of the founders of the specifications for email, offered us perspective on how email has iterated (or hasn’t) to where it is today.

Following these chats Dave McClure of 500 Startups interviewed Facebook’s Joel Seligstein about the new Facebook communications platform.  Why no IMAP yet?  Why were some of the invitations pulled back?  How is the namespace being handled?  Everyone was interested in what Facebook is (or isn’t) doing with email.  Or whatever they call it…

The Email Space

People flew in from all over the US to discuss email and talk about its future.  Though email clients today may do a good job fighting off spam, there’s still room for improvement in the tools where most of us spend half our working days.

Bijan was skeptical of the business models for email startups, but in further discussions, he was more skeptical of the viability of consumer email-oriented businesses, or tools that are more niche-features than full-out products.  Within the 500 Startups family, both my company (AwayFind) and Rapportive are examples of startups much more focused on business-oriented solutions.  Businesses like OtherInbox (which is more consumer-oriented) have done what Bijan suggested as necessary—developing strong relationships with email platforms like Gmail and Yahoo! Mail.  And SendGrid is in a very different place altogether with email—providing developers and businesses a way to reliably deliver transactional messages (i.e., it doesn’t rely on email providers for distribution).

Email is used by virtually everyone.  The major email providers are improving their distribution mechanisms for developers.  And whether it be through CRM, productivity, deliverability, collaboration, unified communications, or the underpinnings of email itself, there’s room for innovation.

Back in the Spring

I’m super excited to work again with Josh and the 500 Startups team to put on a full day event focused around email.  We all have a love-hate relationship with our inbox, but there are ways to make our experience more of the former than the latter.  Stay tuned for more on the Inbox Love conference!

Now back to my email…

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100 Billion Reasons to Build (Kick Ass) Solutions for the Events Industry

Please welcome Christen O’Brien to 500 Startups! Christen recently joined the 500 team as Director of Events. You may recognize her work in recent 500 events such as Warm Gun and SMASH Summit. Look for an exciting 2011 filled with equally awesome events.

Why is it that I spend valuable time doing things for our conferences and events that really should be addressed by technology?

Here’s why: Because current technology for events sucks. Badly.

I’ve been producing events for over ten years and am sad to say that there is still a huge deficit in event technology and I bet that most event producers will tell you the same. Sure, there are a few solutions here and there that work well or at least address basic needs. But I have yet to come across anything that has really understood our market, our frustrations, and our needs.

And the thing is, our market is HUGE. People will often remark that they never knew “conference production” was an actual industry. Well, wake up and smell the market potential! Worldwide, events and conferences represent a $100+ billion industry with annual growth of 5.5% and some international annual growth rates touching 20%.

So what are the biggest pain points for event producers like me that need to be addressed? The top 3 on my mind are:

1. A Single-Source Solution:
Currently, most event organizers will tell you they use tools like Eventbrite for registration, their inbox for customer service, Constant Contact for email blasts, Salesforce for CRM, WordPress for event websites, Dropbox for collecting slide decks, SlideShare for sharing slide decks, Facebook and Twitter for social media marketing, a hodgepodge of online event calendars for competitor research, Ustream for live streaming… you get the picture.

It’s hellish to manage each of these platforms, and very few of these services work together.

There is a HUGE need for someone to create 1 main platform that integrates each of these individual platforms and eliminates the frustration of multiple log-ins, multiple updates, etc. Yes, it would be easier if one company could just do it all but I personally would rather choose my individual platforms because , well, I like the “Slideshares” of the world and I doubt “MegaCorp” could really create something better and constantly iterate. So my wishlist is 1 platform that can tie together all my current platforms, provide important data culled from each service, maintain a consistent UI/UX across them, allow for cross-service updates and distribution, etc.

2. Social Apps:
The whole point of using social media is the power of viral, right? However, the events industry hasn’t yet figured out how to tap into this and, to its chagrin, there are few good solutions out there – at least not that I’m aware of (and if I don’t know about it and it exists, there’s a huge marketing issue there).

Recently, I came across a company that’s creating an app that offers conference discounts based on ‘sharing’ a current discount with your network of friends. The funny thing is, I’ve been trying to figure out how to do this for years – i.e. how can I get my user base motivated to share this event with their network of contacts? Of course with any marketing technology there’s a risk there of becoming ‘that annoying conference’ so the strategy needs to be carefully considered, but I’m going to try the product on our next conference and see how it works.

It would also be cool to use social networks to do things like create conference topics and agendas, or vote on keynotes, speakers, and sponsors. There’s really so many ways that incorporating social into event production could be extremely powerful – and extremely profitable.

3. Event Calendars:
This is probably one of the most frustrating areas for event producers – trying to figure out when the gazillions of other events are so you can 1) avoid those dates for your own events, and 2) stay tapped in to what your ‘competitors’ are doing. For 10 years, I’ve watched event producers cull industry calendars and event websites to create massive Excel spreadsheets that they use to track and plan events. It takes hours upon hours and requires continuous manual upkeep.

Um, hello 1999.

I haven’t really seen anything that directly addresses this problem. The best tool I’ve seen so far is Plancast. Even though it’s intended for event attendees, event producers use it not only as a marketing tool but also as an industry calendar. However, it still needs a lot of work and could probably offer a premium (paid) version to event producers if it addressed needs like sorting capabilities, customizable views/export features, integration with Outlook/G-cal/other calendars, and pulled in other event calendars (i.e. offered an all-in-one solution so we don’t have to hop between industry calendars).

In conclusion: There are so many more products that event producers would pay for and areas of technology within the events industry that seriously need love. If you know about some kick-ass tools/services/software or would like any feedback on something you’re working on, ping me. I cant tell you how much I would LOVE to see some innovation in the events space.

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What Does that “Business Guy” at Your Startup Do, Anyway?

Meet Plastic Man aka 500 SuperMentor Charles Hudson (@chudson). Charles is the Co-Founder of Bionic Panda Games, a new mobile games startup. Prior to Bionic Panda Games, Charles was the VP of Business Development at Serious Business (acquired by Zynga in February 2010) and the founder of Third Power LLC (acquired by WebMediaBrands in December 2009), the company behind some of the most successful conferences in the virtual goods and free-to-play games markets. Charles also held BD and product roles at IronPort Systems (now part of Cisco), Gaia Online, and Google.

Congratulations! You’re the business guy at a hot new startup. It’s Day 1. What are you supposed to do to validate the investors’ and management team’s decision to bring you on board?

Being the business guy at a startup is not easy. While the engineering team is busy checking in code and the product team is busy revising the product plan, you’re out meeting with people. Everyone else, from the finance person to the engineering team has measurable and observable deliverables in terms of code checkins, PRDs, and other key tasks that show up on a weekly progress report, while what you’re doing isn’t easy to measure. You’re not closing deals because you don’t have a product. You’re not generating revenue because the product is still in development. You’re out trying to sell a dream (literally) – some day the startup will live up to all of the promises you’re making to potential partners. So what should you do every day?

I believe there are 4 core activities that every startup business guy should do if you join in the early days:

1. Be an early advocate for a business model and revenue model discovery. Everyone in your organization is going to be focused on building a killer product that users will love. But someone has to worry about the business model and distribution strategy. The good news for you as the business guy at your startup is that you can focus on that issue as a core part of your day. Even if the business model isn’t clear, it’s your job to take advantage of your seat at the table to advocate for potential business models, run early experiments with customers who believe in what you’re doing, and constantly make the case that what you’re doing has to turn into a business if the company is to ultimately be successful. If you don’t agitate for revenue and customer development and discovery, it’s easy to have that work deferred into the future. It’s never too early to start thinking through those issues.

The other natural byproduct of working as a revenue and business model advocate is that it forces you to get more involved in understanding the product roadmap and prioritization of pending features. It’s critical that you find a way to be a part of those conversations early on. Most great Internet startups are driven by product and engineering people who have strong views about where the product should go and which features should be prioritized to achieve that end. If you wait until the product is nearly complete or about to ship, it’s too late; the major opportunities to influence the direction of the product or at least understand why and how key features are being prioritized has been lost. The most frustrating experience many early businesspeople I’ve talked to encounter at startups is a feeling that the product people “just don’t get it” when they come in with a big revenue opportunity, partnership, or deal. You’re right – they probably don’t get it. They’re focused on building the product that they believe customers want. If you haven’t invested the hours it takes to get to understand the product and engineering teams longer term plans, why they want to do what they want to do and when, and to build relationships with them, you’ll never be a part of the process. Spend the time to connect with those teams and work with them – yu can rarely get anything meaningful done if it doesn’t fit into the company’s longer term product plans and vision.

2. Be the one man or one woman combination of sales, business development, and marketing. In the early days of any startup, you’re probably going to be the only person responsible for the “business stuff.” You’re not going to have business counterparts in other key business functions such as marketing and sales. If you’re nominally the VP of Business Development, that’s not actually your job. Your job is to drive all of the business functions to the best of your abilities. Someday you might have a counterpart in sales, marketing, or other key business functions. But until you do, it’s your responsibility to drive those functions forward to the best of your ability and help the company better execute across all business functions, even though you’re only one person.

For those of you coming from big companies, this can be a jarring transformation. I know it was from me. For my first full-time business development role, I went from Google (15,000 employees when I left) to Gaia (about 65 employees at the time I joined). The nice thing about larger companies is that you can afford to staff all of those other business functions – if you’re in business development, it’s not your job to run marketing. And let’s not overlook one critical difference between being at a big company such as Google, Yahoo, or Microsoft. When you call, people will pick up the phone because of the company you represent. Getting meetings is relatively easy. Getting small and large partners to line up behind your new product or vision can be easy when you have the power of a big brand behind you. That is rarely the case at a startup – you have to make it happen and it will take a lot of hustle to do so.

3. Start building relationships that will pay off when your company starts to scale. Similar to the points raised in the first point, there are key relationships you want to start building early, even before it’s entirely clear how the product will turn out. In every early stage business, the management team knows the initial market you’re planning to target. And in every market, there are key other ecosystem participants you want to get to know for distribution relationships, corporate development opportunities, or for other reasons that will help both of your businesses. It’s never too early to start those conversations. The best part of starting those conversations early is that you get an opportunity to better understand how other people in your ecosystem are thinking about the problem you’re trying to solve. Do they have internal efforts already underway? Are they desperate to partner with someone else who has traction? Do they have strongly held beliefs about how the space you’re in is going to play out? These are all things that are good to know as you plot your strategy. And as the person who is focused on life outside of the four walls of your company, this is valuable intel you can bring back to everyone else in the company.

4. Keep your ears open about the chatter in your industry so you don’t get blindsided. Don’t forget that the vast majority of your colleagues are focused on the internal issues that could keep your startup from succeeding. They’re working on product planning and customer development issues that are unique to the product your company is building. But that’s not 100% of what you need to know to succeed. Sometimes it’s really important to know what’s happening in your industry. Is one of your competitors raising a major round? If so, what does that mean for your company? Will that major round allow them to out-spend your on sales and marketing or hire more engineers? Is there a big deal out for bid that doesn’t involve you? If so, what would it mean for the space if one of your competitors closes that deal? Is there a big public company actively looking to acquire someone in your space? These questions and 500 others are important to know if you’re running a startup. Those things can impact your startup’s perceived chances of success. As the business person at a startup, it’s your job to stay on top of industry chatter to make sure your startup isn’t left out in the cold if changes are afoot in your industry.

When I was at Serious Business, making sure everyone on the management team had a good sense about the increasing rate of deal activity in the social games space in late 2009 and early 2010 was important information for us to have as we plotted our own strategy. Having some sense for who was looking to raise money, who was looking to make acquisitions, and the teams who were actively in play and on what terms was key to understand when assessing the best path for the company. The same was certainly true during my time at Gaia Online as well.

Last but not least, you need to get comfortable with the fact that many of the activities you’re doing won’t show up in a weekly progress report. Building relationships, pushing for revenue models, and staying up to speed on what’s happening in your industry might not pay immediate dividends in the same way that code checkins and PRD revisions do. But nothing hurts startup morale more than being blindsided by a major industry development that you hear about on TechCrunch without being part of the conversation.

I encourage all of my fellow businesspeople in startups to soldier on and continue to work hard even if your contributions aren’t always obvious at the moment.

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Harsh Realities From 500 Startups Founders

OnStartups recently published an article entitled “The 11 Harsh Realities Of Being An Entrepreneur.” Certainly all of them hit home for anyone who’s ever tried to start a company.

So a few of the 500 Startups founders decided to share real examples to back up each of these harsh realities. With all of the splashy headlines, stories, and buzz surrounding startups, very little of it serves to shine a light on the heaps of blood, sweat, and tears that go into building a company from scratch. How there are probably many more failures and mistakes than the media makes it out to be. How un-glamorous startup life really is.

If you’re feel discouraged after reading this, don’t be! Rather, take comfort – especially if you’re a current founder and going through some tough times or struggling. You’re not alone!

Without further ado, here are some real stories from 500 Startups:

Your First Iteration of an Idea Will Be Wrong
“We launched at TechCrunch50 with a product focused on disposable email addresses which was far too narrow. But that led us to our Organizer product which has very broad appeal. It took too long to admit we were wrong.” (Joshua Baer, OtherInbox)

Your Friends And Family Won’t Understand What You Do
“My mom keeps asking, when I will get a “decent dayjob” ;-)” (Kris Hiiemaa, Erply)

“It’s not always that they don’t understand, it’s the unsolicited advice that gets me! When you have a little startup, every last person *without* startup experience seems eager to give you their 2 cents… it’s often completely off topic or downright obvious. So I made a kind of obnoxious but useful resolution to be upfront and say “I only take business advice from people who have already been there and done it.” (Robert Laing, myGengo)

You Will Make Less Than Normal Wages For A While
“I only realized how little I had earned during the first year of our startup when my wife and I were trying to rent a new apartment. My taxable income for 2009 was… $4,000. I was pretty shocked I had managed to survive for 11 months on basically nothing.” (500 Startups Founder who will remain anonymous)

“Upon graduating, I turned down offers to make 3 to 4 times what I get paid as a founder. To be within budget I slept on a futon and had most of the furnishings for my apartment donated to me — even still I cut into my savings and began taking on debt. One year later I still make less money on an hourly basis than the interns who get internships through InternMatch.” (Nathan ParcellsInternMatch)

Everything Takes Twice As Long…If It Even Happens
“I remember working on a ‘two week’ project which was a Q&A section of our site… 18 months ago. It’s going to launch at the end of this month. Haha.” (Robert LaingmyGengo)

“Shipping the WakeMates… ’nuff said.” (Arun Gupta, WakeMate)

Titles Mean Nothing. You Will Be a Janitor
“In the almost two years that we’ve been building EcoMom, I’ve been the CEO, loading dock worker, fund raiser, legal clerk, delivery guy, trade show set up guy, purchasing guy, accountant, graphic artist (barely), credit card puller outer, food getter, vendor schmoozer, customer service manager, blog network coordinator, and many other titles. Each day brings a new role, to add to all of the others. And when someone calls for customer service and I say “this is Jody” there is almost always a long pause, which lets me know they were expecting a woman to answer the phone (makes sense since our company is called EcoMom and we serve mostly women). Some people might complain about all of the work that is outside of their job description, but I don’t really think about that. I think about what it takes to get the job done and having done all of these jobs, I know what others are capable of and it makes it easy to hire for these positions, have empathy for the people who are taking on these roles, and allows me to pitch in when things get overwhelming.” (Jody ShermanEcoMom)

“As the weakest-nosed member of Estately’s founding team, I was de facto Chief Janitorial Officer (in addition to CEO) in charge of taking out the trash 48-72 hours after it had fully matured. I also vacuumed our old offices every 3-6 months to conserve cash (because you need a break from mental work every so often). I also paid myself as much as a non-unionized janitor, but union wages are now here to stay!” (Galen Ward, Estately)

“Everyone in our startup takes out the trash on weekly rotation. As CTO, I must make the phone-call to order the custom municipal trash bags when we run out (this is Japan…).” (Matthew Romaine, myGengo)

There Is No Silver Bullet
“Pitching to investors and customers puts you in this mode of explaining everything away as a total breeze… “Oh yeah we’ll use AdWords, we’ll get $2 back for every $1 we spend” etc. Bullshit. I can’t actually think of anything that was easy. But at least you know it’s just as hard for your competitors.” (Robert LaingmyGengo)

Customers Will Frustrate You
“We were once on a video call with a customer who pointed a .44 Magnum at his head and then at the screen after a comment we made. He ended up being our first paying customer.” (Gagan BiyaniUdemy)

“Our market is in Korea and cultural differences completely permeate the web culture. We were frustrated to discover that Korean web users don’t actually know the URLs to their most-used web services; they go to a Korean search engine and search for it *every single time.* Ranking on Korean search engines costs a *lot* of money, so we don’t rank. Some of the early users of our service who signed up never came back because they could never find it again.” (Darien Brown, YongoPal)

You Can’t Do It All Yourself
“After getting rejected by Y Combinator in 2008, my soon-to-be co-founders couldn’t take on the risk. I decided to do it myself, and ran out of steam (and moral support) after about 12 months and decided to fold.” (Sid Viswanathan, CardMunch)

“Anyone can delegate stuff they don’t like doing. What’s hard is delegating things you *like* doing.” (Robert LaingmyGengo)

“We have had extraordinary support from friends, family and mentors who believed in us and our company from very early on. Some chose to make introductions to people at the top of their network before we even had a landing page and which propelled our company forward, others lent us their homes and cars as we came to work in a new city. All have given us the motivation to push through the challenges and scary moments while building InternMatch from the ground up.” (Nathan Parcells, InternMatch)

Building A Team Is Hard
“The phrase ‘Good people are hard to find’ is quite an understatement. I spent three years going through ten people and two founding teams before finding a set of co-founders who really clicked. When that happened, the difference was like night and day. There’s no more valuable asset for a startup than its founders, and it’s worth doing whatever it takes to find the right people.” (Ryan Damico, Crocodoc)

“When I was bootstrapping, I was overjoyed to find a human being that would support me. But the skills and attitude you need from someone very early on are often completely different from the skills you need to build a business long term. You realize quickly that people who may have been instrumental in the early stage of the company can actually become dead weight when you reach a certain size, because they haven’t changed with the company. It’s really painful to remove them, but necessary for the company.” (500 Startups Founder who will remain anonymous)

Finally, this wasn’t part of the original OnStartups list but it was contributed by one of our founders as #12:

You will LOSE all of your hard earned money (and probably a bunch that you still haven’t earned).  If you’re not prepared to put it all on the line (financially, personally, relationships, and more), you’re not prepared for a startup.
“The economy tanked, we ran out of money, and still didn’t have the “right” model figured out. The whole team of ten had already gone more than two months without any pay, vendors were waiting for payment, and still no funding in sight. Because of my unwavering belief in our vision (and opportunity) and personal support with my own resources, I had spent much of my savings.  Continuing the trend, I brought in $30,000 in cash one day and handed it out in envelopes to the entire team evenly to get us through the next six weeks. Just over one year later we’re rapidly closing in on profitability, have signed half a dozen meaningful partners, and are on track to build what I believe is a billion dollar company.” (TJ Sassani, Zozi)

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Livin’ La Vida Startup – in Beantown

Meet Optimus Prime, aka 500 SuperMentor Roy Rodenstein. Roy co-founded, a pioneering startup in local events and ticketing acquired by AOL in 2009, and led product and online marketing. Before that he led product marketing at a search startup acquired by IBM, and was a researcher at the MIT Media Lab. Roy (@royrod) was a founding member of HackerAngels and blogs at In this post, Roy gives you a taste of what the startup environment and startup life is like in Beantown (Boston).

Driving up 101, looking at the mountains off in the distance. Ads for engineer jobs in the billboards on the highway. A pool in every apartment complex. Hearing “try” for the first time. Biking from Mountain View to the PARC campus on Coyote Hill overlooking Palo Alto, and taking Caltrain back in the evenings.

My memories of life in the Valley are many – they were wonderful times. Fast forward two graduate degrees, and after doing early research in what became known as social networks at the MIT, I settled into the startup life in Boston. There are some analogues- instead of the pilgrimage to Sand Hill Rd. in search of mucho VC $$, there’s a well-worn path to Winter St. in Waltham. And working at the cooler startups here is not that different from the west coast. At my first startup job out of grad school, the company was backed by Sequoia’s Mike Moritz, we got dinner brought into the office every night, and part of the hiring process was candidates playing (aka getting smacked down) by the CEO at ping-pong. There are many things that make the startup scene in Boston special though…

Hanging Out

(I’m 2nd from the right) With entrepreneurs at Dart Family Dinner, one of many events at NERD

If you spend a bit of time here going to startup events, chances are you’ll soon find yourself at NERD. That is the cleverly named Microsoft New England R&D building which has played host to everything from Startup Weekend to Techstars Investor Day to the Boston Angel Bootcamp to Open Angel Forum. For a more casual spot head to Andala Cafe in Central Square, with some of the coolest Middle Eastern inspired cushy seating around which seems to attract entrepreneurs. The Au Bon Pain by MIT in Kendall is a common hangout spot for the Boston Globe’s tech journalist Scott Kirsner, and is also the site where I first blurted out the idea that eventually became my startup, (It all started in 2005 because it was too hard to find awesome things to do on a date, and four years later we were acquired by AOL.)

“77 Mass Ave” is a meme known to all MIT students as the ‘tute’s main entrance, which leads to the Infinite Corridor. A decade after graduating, I still love walking through it and feeling the buzzing activity from current students. At the end of the Corridor is the Media Lab, the most interdisciplinary school in the world with sculptors working next to physicists next to hardware hackers next to musicians next to ethnographers next to Marvin Minsky, father of AI (whose class I was lucky enough to take).

The (Recruiting) Scene

If you like being a big fish in a small pond, Boston is a good place to be. If you’re a cool startup, it’s much easier to attract and retain great technical talent because there’s just a lot less competition from other cool startups. Actually finding people is another matter…

Day-after-Halloween 2009, testing the straw hat look, waiting for the T in Harvard Square

In the valley you can’t swing a cat without hitting 5 hackers. If you have an event and get a couple of interesting founders or speakers attending, presto, you get a bunch of hackers showing up. In Boston there are not many places or events with a high concentration of techies. Startup Weekend is definitely one of the best at tapping hackers and designers, and Hackers & Founders is ramping up. Geographically, Cambridge’s Kendall Square (Akamai HQ and site of the Cambridge Innovation Center startup space, and of more biotech firms than you can shake a stick at), Central Square (home to Techstars, Zynga Boston, and the oneforty crew’s rocking parties), Harvard Square (birthplace of YCombinator, and of … that site that that Social Network movie was about), and Davis Square (where the reddit guys used to throw rooftop parties) are some of the highlights.

Even if you find a great hacker or designer, they’ll often be highly suspicious and reticent to make the jump. Many of the best designers in town have been locked up at agencies or in-house at large companies for years, wary of setting out on their own. But I have managed to recruit an SEM guru from the Google AdWords team and pull other rabbits out of hats. While in the Valley you might open with “We’re like if Animoto got busy with Google Wave in the back of a Tesla, and we’re going to totally make the iPad look like MySpace,” in Boston you’re best off pitching stability along with a more sober level of excitement. “We have plenty of money in the bank, an experienced team with a vision to own the X market, and we’re doing the coolest AJAX hackery around- but we have a real revenue model and deals to prove it” works well. If all else fails, take the candidate AND their significant other to a nice Italian dinner in the North End (doh, just gave one of my best tricks away). Yes, it can really test your recruiting chops to get top talent interested. The good news is once they join you you don’t need to worry (much) about Google or Facebook or UberCab poaching them.

Hometown Inspirations

While the latest rage with consumers, Instagram or whatever it is this week, may rarely start in Boston, there are so many sexy and solid businesses to admire here. Kayak, the minimalist travel search engine. Skyhook Wireless, the original geolocation vendor to Apple for the iPhone, and Quattro Wireless, Apple’s acquisition as its mobile advertising platform. ITA, which probably has the largest weapons cache of math PhD algorithm hackers around thanks to its brain teaser ads on the T (the nickname for Boston’s subway- the Red Line will get you to most startups). HubSpot, the epicenter of the Inbound Marketing megatrend, and growing like wildfire. Zipcar,, TripAdvisor, BrightCove, ScanScout, RueLaLa, iRobot, IdeaPaint, SCVNGR, Backupify, the list is longer than most people -even here!- realize.

Inspirational entrepreneurs, hackers and investors abound too: John Resig, creator of jQuery; Tom Leighton of Akamai; Robin Chase of Zipcar; Jeremy Allaire of Allaire and now Brightcove; David Cancel of Compete and now Performable; Dharmesh Shah of HubSpot, the most prolific, modest hacker you can meet; Paul English of Kayak, whose talks on full-court-press recruiting are now legen-wait for it-dary; Dave Frankel and Eric Paley of Founder Collective, the #1 most active first-round microVC according to the WSJ’s new stats.

Of course, several of the 500 Startups have roots in Boston too. If you need to transfer money abroad, Iker Marcaide of innovator peerTransfer is your man. And I can personally attest that Alex Moore’s email sanity lifesaver Baydin is so useful that when I have to use a computer that doesn’t have it installed I want to throw it out the window. Of course I would never use its amazing Send Later feature when emailing you 🙂

So What Does It All Mean?

Startup life in Boston is different than in California. Maybe it’s a little like the weather. In LA people complain when the temperature drops below 80. In Boston, as long as it’s sunny, 47 degrees is considered gorgeous (yes, people say exactly that). Likewise, the Boston startup community is very tight-knit. You can’t just walk into any bar here and find your startup sisters and brothers, but once you do they’ll do anything to support your fledgling idea. I guess you just come to appreciate things more when you have to work for them a bit.

A picture of the first Going office, aka my co-founder’s apartment. That red couch was my “desk” for a year.

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