Month: June 2016
Sunspring, the first known screenplay written by an AI, was produced recently. It is awesome. Awesomely awful. But it’s worth watching all ten minutes of it to get a taste of the gap between a great screenplay and something an AI can currently produce.
It is intense as ArsTechnica states, but that’s not because of the screenplay. It’s because of the incredible acting by Thomas Middleditch and Elisabeth Gray, who turned an almost illiterate script into an incredible five minute experience. Humphrey Ker, on the other hand, appears to just be a human prop.
AI has a very long way to go. But it’s going to get there very fast because it understands exponential curves.
For the next 90 days, Amy and I are matching every gift to the Techstars Foundation on a 1:2 basis up to $100,000 from us. Our overall goal is to raise at least $300,000 for the Techstars Foundation by the end of the summer.
If Techstars has touched you in any positive way, I’d request that you consider making a grant to the Techstars Foundation. This request includes anyone who has gone through a Techstars accelerator, done a Startup Weekend, participated in a Startup Week, receives Startup Digest, or has been a mentor or investor in any Techstars company or program. Or anyone else who has been positively motivated or influenced by Techstars in any way.
When we started Techstars in 2006, our goal was to change the way early stage company creation and innovation worked. While we didn’t have the words for it then, we’ve evolved the language and the mission of the organization over the last decade which we now summarize in the tagline “Techstars is the global ecosystem that helps entrepreneurs build great businesses”
As part of building this global ecosystem of entrepreneurs, I’ve observed and experienced a massive issue around diversity in entrepreneurship. This is not a new issue to me as I’ve been working with various organizations, such as National Center for Women & Information Technology, since 2005.
Last year, in a conversation with the Techstars leadership team, we decided to start the Techstars Foundation with the goal of improving diversity in entrepreneurship. While we were already doing lots of things internally around this, by creating the foundation we have taken it up a level, as evidenced by our first five grants that were made last month.
Amy and I decided to launch this challenge grant as part of a larger gift from us to the Techstars Foundation. We hope you join us and support our efforts.
It was a quick read, but very useful for anyone who is interested in marketplaces. Boris lays out all the terminology, explains different types of marketplaces, dynamics of building a marketplace, and metrics you should pay attention to.
If you are building or investing in marketplaces, make sure you grab a copy and read it.
If you are the CEO of a VC or angel backed company, will need to raise more money in the future, are doing more than $100,000 of revenue a month, and are growing more than 25% a year, then this post if for you.
In January, you finalized your budget. Unless something went horribly wrong, you made your plan in January, especially if the plan was finalized in February. Assuming things were on track, you made March and declared victory on Q1.
Q1 is the easiest quarter to make. If you miss your Q1, regardless of the type of revenue you have, you aren’t going to make your revenue plan for the year because your budget process isn’t accurate. If you are a SaaS or consulting business, you likely just can’t make up what you missed, especially if your growth rate is greater than 50% for the year. If you sell a physical product, you have a lot of Q4 upside and unpredictability, but now you have to manage your cash to get to Q4 so that you can invest in building inventory to over-perform. If you are a marketplace, you’ve likely got a supply/demand imbalance that you don’t completely understand. And, if you overperformed on sales but can’t implement things fast enough to recognize revenue, you’ve got an entirely different, and especially difficult problem to overcome.
If you aren’t going to make your revenue plan, it’s unlikely you’ll make your EBITDA or Net Income plan. You don’t even have to get complicated and look at Gross Margin or more derivative metrics – if you are off in Q1 and have any sort of growth expectations , you are going to miss for the year.
But, if you are like most CEOs, you think you’ll fix things in Q2 and be close enough to or at plan to keep going on your current budget. And, if you met or beat Q1, you’ll be somewhere between appropriately confident and overconfident about Q2.
It’s June 7th. You likely know how you are going to do in Q2 by now. Every now and then I run across a business that doesn’t have a handle on their first half of the year by the beginning of June, but if you are honest with yourself today, you know whether you will be ahead of, at, or behind plan at the end of Q2.
If you are going to be more than 2.5% behind plan on your revenue line for the first half of 2016, it’s time to rebudget for the second half of the year. If you missed your EBITDA by more than 5%, it’s time to rebudget for the second half of the year. If your GM% is off by more than 5% for the first half, it’s time to rebudget for the second half.
When I say rebudget, I don’t mean “reforecast.” I don’t mean have three numbers – original plan, new plan, actuals. I mean start now, before June is over, and create a 2H16 budget. Throw away your current budget for 2H16 – it’s wrong. Don’t wait until July to realize that it’s wrong. Own that it is wrong right now and come up with a new plan for the rest of the year.
Deal with reality. Your growth rate will be slower than you planned at the beginning of the year. No matter what you do at this point, your EBITDA loss and the amount of cash you will consume over the year will be greater than the original budget. You will have an uncomfortable board meeting in your future. But it won’t be nearly as uncomfortable if you keep waiting to deal with reality.
This is especially true if you have a growth rate of > 100% planned for the year. The smart CEO has already reduced her hiring plan but in an informal way. By creating an entirely new budget for 2H16, you make it official. You also make it clear to everyone, including your team, your board, and your investors where you really are at and where you are planning to go.
If there’s one consistent concern I hear from the companies I work with, it’s the shortage of qualified tech talent. But just like in so many other areas, a Boulder entrepreneur has come up a great idea to address the problem that not only adds to the talent pipeline, but also brings in more diversity — a personal passion of mine.
Too often, aspiring engineers who lack the funds to pursue a computer science degree from a university or take part in a bootcamp find themselves locked out of technology jobs, despite often severe talent shortages. Think about it: if you need to pay rent and buy groceries, it’s pretty tough to quit, or work part time, and pay either tuition or boot camp fees. To address this, Heather Terenzio, founder and CEO of Boulder’s Techtonic Group, developed Techtonic Academy, an innovative solution in the form of Colorado’s first federally recognized by the Department of Labor technology apprenticeship. Rather than paying thousands in tuition or fees, qualified individuals can get their foot in the door to a tech career while earning a salary from their very first day.
Techtonic Academy provides underprivileged youth, minorities, women, and veterans both technical training and mentorship to become entry-level software engineers and pursue a career in the technology field. It works like this: the program looks for people with an interest in and aptitude for tech but little or no formal training — think gamers, self-taught hobbyists and the like — and puts them to work as apprentices. They work with senior developers to gain coding experience on real client projects under careful guidance and supervision while earning a livable salary. They are required to earn a series of accreditation badges covering coding skills and are constantly mentored in “soft” skills — things like being on time or working effectively on a team.
After about six months, graduating apprentices are qualified junior developers, ready to work. Some choose to stay at Techtonic Group, where they become part of a team to build custom software, mobile applications and content-managed websites, while others move on to Techtonic Group clients. If a client hires an apprentice, Techtonic does not charge a conversion fee, which can run into the thousands for a junior developer hired through a traditional recruiter.
As Heather told me, “I have an Ivy League education, but that’s not where I learned to code. I learned to code doing it on the job.” I think many software developers share that sentiment.
Heather welcomes all technology hopefuls and works hard to bring diversity to the program, recruiting women, veterans and those who aren’t in a financial position to quit work to pursue a degree or certificate. The benefits are obvious. Apprentices earn a living salary on their first day, and we as a tech community can support a program that puts more coders in the market with a keen eye toward diversity and opportunity while getting work completed.
Heather’s got a great idea and it gives all of us the chance to both find help on projects and add new, diverse talent to our community. Reach out to Heather if you’d like more information.
As I noticed quotes from the Code Conference dominate my Twitter feed yesterday, I saw a few from the Jeff Bezos interview that made me say out loud “Jeff Bezos is amazing.” I love his use of the phrase “cultural norms” (it’s one of my favorite phrases) and I particularly thought his comments on Donald Trump and the Peter Thiel / Gawker situation were right on the money.
The interview prompted me to think about how biases affect my thinking. I’ve been struggling with the Peter Thiel / Gawker stuff and have asked a few friends closer to the situation and the people involved to give me their perspectives as I’ve tried to determine whether my biases are overwhelming my perspective on it. As a result, I haven’t discussed it publicly, and instead have thought harder about it at a meta-level, which is actually more interesting to me.
I don’t know Jeff Bezos and have never met him, so my strong positive reaction to the interview reinforced this notion around unscrambling my biases as part of better critical thinking. If we use Amazon as an example, my relationship with the company, and my corresponding experiences over the years, have created a set of biases that I map to my impression of Bezos. And, as you read though the list below of my experiences / viewpoints, you’ll quickly see how the biases can create a chaotic mind-mess.
Following are the quick thoughts that come to mind when I think about Amazon.
- Love it as a customer
- Frustrated with how they have handled relationships with companies I’m an investor in
- Delighted with how they have handled relationships with companies I’m an investor in
- Moments of misery with interactions around difficult things
- Brilliance and clarity of thought from Bezos
- Wasted money on Amazon products that sucked
- Amazing delight with Amazon products that I use every day, including my Kindle
- Sucky experience as an author
- Distribution that otherwise wouldn’t exist for me as an author
- Many friends at Amazon
- Sympathy for the stupid way Colorado has dealt with them around affiliates and sales tax
I could probably come up with another 50 bullet points like this. Given that Bezos is the CEO and public face of Amazon, I map my view of the company to him. I know that is only one dimension of him – and his experience as a human – but it’s the one that I engage with.
Then I remember we are all human. Shit is hard. We make lots of mistakes. And, when I sit and listen to Bezos talk to Walt Mossberg, I have an entirely new level of amazement, appreciation, and intellectual affection for him, and – by association – Amazon.
I know that many different kinds of biases get in my way every day. I’ve learned the names for some of them, how they work, and how to overcome them through various work of mine over the year. But at the root of it, I realize that a continuous effort to unscramble them when confronted with something that has created dissonance in my brain is probably the most effective way to confront and resolve the biases.
For those of you in the world who tolerate me saying “what do you think of thing X” and then give me a thoughtful response, thank you, especially when you know I’m wrestling with trying to understand what I think about X. Now you know that part of what I’m asking you to help me with it to unscramble my biases around the particular person or situation that is represented by thing X.