Category: Management
Ari Newman is an entrepreneur, mentor, investor, and a friend. He works at Techstars where his responsibility is to ensure that the connections between alumni, mentors, and staff are as robust as they can be – helping entrepreneurs “do more faster” day in and day out. His most recent company, Filtrbox, participated in the inaugural Techstars class (Techstars Boulder 2007) and was a win for all parties involved; Filtrbox was acquired in 2010 by Jive Software (NASDAQ: JIVE).
I’ve worked closely with Ari for a while and love his candor. He talks, from an entrepreneur’s perspective, with recent first hand experience. Following is his advice to early stage entrepreneurs for creating structure in their company.
Here’s the punchline: if you run your company as if you have closed a VC equity financing round even though you actually closed a convertible debt round, you’ll be in much better shape when it comes time to raise your Series A financing. Specifically, I am talking about putting a board in place, running formal board meetings, and making sure you have people at the table who act as the voice of reason and sanity. One of the key benefits of doing this early on is that when it comes time to raise that next round, the people you’ll need the most help from are already involved and engaged.
Convertible debt financings have become an increasingly attractive approach for seed rounds because it delays the valuation discussion, costs less from a legal standpoint, and is an easier financial instrument to “keep raising more small amounts of money” on. There are two different cases, with shades of grey in between: (1) there are only a few investors or (2) it’s a “party” round, with $1M+ raised and many investors. This second kind of seed financing can be a double-edged sword for the entrepreneur and company if not very carefully managed. This post is not about the economic implications of debt rounds versus priced rounds – there has already been plenty written about that including this great one from Mark Suster. Rather, this post is a call to action for entrepreneurs who have successfully raised a debt round and must now turn their idea into a serious business.
So why would you treat your debt investors (somewhat) like equity investors? This may seem counterintuitive, even even a pain in the ass. So, I’ll explain my reasoning through the story of ASC, a fictitious company that has a combination of characteristics I’ve seen across a number of early stage companies.
Acme SaaS Corp (ASC) was started by two entrepreneurs; they have a big vision and if they can execute on it, the business will be a clear home-run. One of them used to be a lead developer at [insert hot consumer tech company here]. They need to raise money before building anything substantial after determining that they needed a little dough to follow the Lean Startup methodology.
They decide to go out and raise money on a convertible note – several angel investors have signaled interest in participating in the note and they don’t feel ready to pitch VCs yet. Fundraising goes better than expected and they quickly find themselves with a $750k round consisting of several VCs and a bunch of angels. The investors, founders, and “community” are all super excited about ASC. They close on the $750k, hire a buddy or two, buy some Macs, and get to work.
ASC starts building product, but as they get into the thick of it, the team realizes executing on their vision is going to be extremely hard. Things start to get a little fuzzy in terms of priorities, but not to fret, the new office is coming along really well with all of the hiring! For the first the months, the team meets often and strategizes on what they want to build while some code gets written. Early customer development talks are going great which keeps the team really excited. Three months in, the burn is now at $70k/month.
Two more months go by and the team is continuing to iterate, but every two-week sprint results in some re-factoring and re-thinking. No updates, screen comps, or metrics have been publicly shared yet. It’s too early for that shit. Heads down on product, they say. Every now and then, investors are told things are going great and the founders are really excited about what they are doing. Soundbites from potential customers are encouraging. Eventually early product demos start happening but they’re rough and the product looks very alpha. At month six, one of the early hires leaves, a developer who turns out wasn’t a good fit. There is $350k left in the bank.
Seven months in, there is a beta product. It’s better than before, but not by miles. The people on the sales side don’t feel they can charge for it yet because who’s going to take out their wallet for something that isn’t perfect. A bunch of potential customers are kicking the tires on the product but it seems that every engaged beta customer needs something slightly different or feels as if the product is not ready to be truly used in production. “This is all a part of the normal product and customer development process,” the CEO tells the team. The burn is now at $90k/month as they had to hire a “customer delight” person to handle the beta process. The team thinks their investors still love them and that they are still a hot company. The first material update goes out to the investors, with lots of positive quotes from VPs at potential customers, and they all indicate future product acceptance if a bunch of other stuff gets in place. Investors are dismayed that there are no real customers yet. There is no discussion of burn, runway, and more financing yet. The team wants to make a little more progress first.
A month later, another email update goes out to the investors – the team has decided to pivot based on feedback and they are super excited about the new direction and once they have the product updated to capture the new, bigger opportunity, it’s going be great. Oh, and the email says the founders will be in touch to discuss another round of funding since there are only 2 months of runway left.
Sound familiar? I could continue but the odds are that this story isn’t going to end well. The company flames out and the team gets aquihired. The investors get nothing.
While you may think ASC is an extreme case, it happens all the time. I’ve observed too many companies that have some or all of these elements in their story. I’m not saying, under any circumstance, that the debt round was the catalyst or sole reason for the company’s missteps but there are a number of times in this story where good company hygiene, good governance, and a properly utilized board would have helped to positively affect the outcome. Following are a few ways that a board would have helped out.
Easy Debt Round Lasting A Year – Even if the raise wasn’t that easy, the company was able to raise enough to buy a year or more of runway. In startup time, that feels like forever. It’s enough time to hang yourself if you are not careful. Had the company created a board and run it properly, they would have ratified a budget, reviewed compensation plans, and agreed on spending levels during early product development. The year would have been a full year, not just 7-9 months.
Real Product and Market Focus – This company lost 3-6 months of execution because they got lost building towards a high level vision. That high level vision was a beast to tackle, and being younger founders, they they didn’t realize they were in over their heads. With advisors or a board, the founders could have opened the kimono and asked for guidance. There are about a dozen corrective actions, best practices, or methodologies that could have been applied during this critical time. It’s up to the team to be able to execute them, but they had their heads in the clouds for too long and no one else at the table with them.
Don’t Pivot in a Vacuum – Had ASC properly used its board, advisors, and investors, it would have brought the pivot strategy to the table early on. A discussion around overall business viability, time to market, and capital impact would have ensued. A review of the cash position, burn rate, and execution plan would have revealed there was not enough cash on hand to nail the pivot while leaving 3-6 months of time in market before raising again. The plan would have to get way tighter, way faster. They didn’t keep the investors up-to-date, then pivoted without engaging or validating whether there was going to be follow-on support. They took a right turn into a brick wall. Investors do not own the company or its strategy. I often say “it’s your company” when I’m bluntly asked what direction a company should take, especially if I’m wearing my investor hat. While that is true, if you rely on outside capital to reach escape velocity, keep the cockpit talking to the engine room.
Use The Smart Money or Lose It – Almost every investor I know makes investments because they want the return, but they also believe they can be helpful to the company in some way. When teams don’t communicate and engage with their investors, the void is often filled with skepticism, doubt, and (often false) assumptions about the business or the team. You borrowed money (or sold a portion of your company) from these folks – they want you to be successful. Leverage them for the better of the company, whether that means using their wisdom or their rolodex. They also can create major signaling problems for your next round if you allow the radio-silence void to be filled with doubt and distrust. Who would blindly give ASC another big check after what occurred above?
Company Hygiene Matters – One of the responsibility of a Board of Directors is to regularly discuss financials, burn rate, and cash management. Had ASC created a board, the company would have potentially managed their cash more conservatively and had the wherewithal to initiate the shift of the company sooner, whether it be through M&A talks, raising more capital, or making the pivot earlier.
I bet that some of you reading this post are entrepreneurs who are in this situation. I beg of you, treat your debt holders like equity holders, and utilize their expertise to help further your business. One easy way to do so is to act as if they are board members. In the super hard, fuzzy, pivot-happy early days of a company, a little structure, accountability, and organizational discipline can be all the difference between running headlong into a brick wall or creating a meaningful, well-operated company.
Follow Ari on Twitter at @arinewman or ask him about the power of the Techstars network at ari.newman@techstars.com.
As a part of Startup Phenomenon, I’m going to spend a half hour with Jason Illian, the CEO of BookShout!, on Thursday, November 14th at 4:30pm. It’ll be at the Boulder Public Library, which is right across Boulder Creek from the St. Julien and downtown Boulder.
We’ll be talking about the Startup Revolution book series (which include Startup Communities and Startup Life), as well as the wonderful platform that Jason and his team have built.
I’ve been a fan of BookShout! for a couple of years now.
As an author, I’m always looking for ways to connect with my audience. I spend time with the people from the local startup scene all the time but connecting with aspiring entrepreneurs from around the country, and around the global, is an entirely different beast. Comments on Amazon are one-directional, and definitely do not encourage reader-to-reader interaction. Buying a book in a bookstore is an individualistic experience. Getting a book at a conference means reading it after the conference is over, which doesn’t leave any time for in-person discussion or engagement.
Enter BookShout!. First glance, it’s nothing special. Simple but effective distribution of books. All the goods when it comes to commenting and rating. Where BookShout! really shines is how it brings an audience and an author together, on the same page – both literally and figuratively – and allows them to have an unfiltered conversation around the content of the book.
It’s a powerful tool for authors and an interesting site for readers. If you’re either, check it out.
And if you’re in Boulder tomorrow afternoon, for Startup Phenomenon or not, come on by the Boulder Library and hang out with me and Jason.
See you there!
RSVPs are requested. Please do so here. While you’re there, check out some of the Master Classes that Startup Phenomenon is offering.
I was fired from my first two jobs. Here’s the story of one of them, which first appeared as part of LinkedIn’s My First Job content package.
“You’re fired.” Those were the last two words I heard from my boss after working for six months at Potatoes, Etc., my first real job. I smirked, immaturely threw my apron at her (I was 15 years old after all), and slammed the door on my way out.
My final three words, preceding hers, were “you’re a bitch.” In hindsight, her response was predictable.
I remember riding my bike home the three miles from Prestonwood Mall where I worked. I had no idea what I was going to tell my parents, but I decided I’d just tell them what happened and see where the chips landed. I felt ashamed of myself for being so disrespectful to my boss, even though she had constantly demeaned me, and all the other people that worked at Potatoes, Etc. I didn’t have any respect for her, but my parents had taught me better and I was proud of my ability to suck it up and not lose my temper.
Potatoes, Etc. was one of those local fast food restaurants in a giant shopping mall from the 1980s. Remember Fast Times at Ridgemont High? Yup – that was us, except Potatoes (as we liked to call it) was staffed by the “honors kids.” I think the Greek souvlaki place was staffed by the jocks and the Corn Dog place was staffed by the stoners, but it all blurs together 30 years later.
In hindsight, the Potatoes, Etc. supply chain was pretty cool. Idaho spuds appeared magically in 50 pounds boxes and ended up in a dank, gross storeroom. Each shift, one person was responsible for getting them, cleaning them, putting them on trays, covering them with industrial grade salad dressing, and racking the trays. Another person was responsible for putting them in the convection oven and making sure there were enough potatoes cooking at all times to handle the spikes in demand. Another person manned “the bar” – cutting open the potatoes and filling them with whatever goop and toppings the customer ordered. And the last person worked the cash register. After we closed, we were all responsible for cleaning up.
Since we were honors kids, we had a lot of fun with the supply chain. We did a good job of load optimization. We figured out process improvements to cut, fill, and serve the potatoes. We ran a parallel process on cleaning and closing up, so we could be done in ten minutes. We were never, ever short on cash.
Our boss was a young woman – probably in her early 20s. I remember the smell of smoke and alcohol on her breath. I remember Saturday morning shifts where she would come in at 1pm, clearly hung over. She liked to yell at us. Her favorite form of managerial shame was to call someone into the back “room” (there was no door) and dress them down randomly so everyone in the food court could hear.
We were good kids. It took a lot to get a rise out of us. Sure – we’d complain to each other about her, but we bonded together and did a good job regardless of her antics. Every now and then she’d do something that she thought was motivating, like bring a case of beer into the back of the store and offer up cans to us (we always declined – remember, we were good kids). But I can’t remember a single time she praised us – or at least me – for anything.
I had been racking potatoes all day on the day I got fired. I was cranky – I wanted to work up front but today wasn’t my day. I was tired – lifting 50 pounds of potatoes and washing them one by one is a drag. And I was bored out of my mind.
My boss probably noticed I was in a bad mood. A kind word from her would have made all the difference in the world. Instead, she came over to the full rack of potatoes, started pulling them off the racks, and without even looking at me dumped them one by one in the sink.
“You suck at washing potatoes.”
“You’re a bitch.”
“You’re fired!”
My parents were gentle with me. They made sure I understood the lessons from the experience, which included the power of respect and not losing your temper with a superior.
But most importantly this was a key moment that I think back to whenever I consider motivation. My boss never did anything to create a context in which we were motivated. It wouldn’t have taken much. And, if she had, respect – and motivation – would have followed. At 15, I learned what it was like to be on the receiving end of a boss who had no idea how to create an environment in which the people that worked for her were motivated. I’ve carried that experience, and the resulting insight, to every subsequent thing I’ve been involved in.
I am so very tired of MBO-based bonuses in startups. I knew the concept of MBOs pre-dated my time in business school, but I couldn’t remember where they came from. Wikipedia reminded me – it’s another Peter Drucker creation from The Practice of Management.
I’ve only worked in what could be considered a “big” company for 18 months (1993 – 1995) and that was the company (AmeriData) that bought my first company (Feld Technologies). When they acquired us, they weren’t big (probably 200 people) and when I left they still weren’t really big (2,000 people) but were “big enough.” So the joy, and experience, of working in a 50,000 or even 100,000 person company eludes me.
As we enter Q4, I’m starting to see discussions about annual performance – often in the context of gearing up for 2014 plans. This often comes in the form of long emails or tedious board discussions about compensation and bonus programs. And inevitably, discussions of MBOs and qualitative performance bonuses quickly enter the discussion.
Now, I’m not a huge fan of programatic bonuses. I spend way to much time reviewing comp plans and trying to help CEOs get a decent alignment between an elusive and inaccurate “plan” (which – especially in a rapidly growing company is never anywhere close to correct), bonuses driven off of company performance, and then bonuses driven off of individual performance. It’s just really hard to get right and feels like an enormous misallocation of time for a young company.
The ostensible goal is to motivate certain behavior and reward certain outcomes. The quantitative, performance-based bonuses are about rewarding outcomes. The qualitative MBO based bonuses are often included to motivate behavior.
Therein is the conflict for me. I have a deeply held belief that a manager cannot “motivate behavior.” She can only create a context in which a person is motivated. It’s up to the individual to motivate himself. Theoretically MBOs help create this context, but it’s often an artificial construct linked to arbitrary behaviors that have nothing to do with motivational structure. Toss money in, and you put focus on the behavior, not on the motivation.
This is totally messed up in a startup. Things are changing daily. Annual performance plans are often irrelevant by February. Quantitative metrics are either too easy to hit, or completely impossible. So the MBOs becomes the achievable bonus, and behavior shifts to achieving them, even when they are even more irrelevant because of the needs of the business.
At Feld Technologies, we had a very simple bonus program. Each quarter, we paid out 10% of pre-tax profits as a bonus. We did this on an accrual basis. My partner Dave and I took the number, made a list of all employees, and figured out how much we were going to give each of them. We then printed out checks and gave them to each person. When we had our act together, which was several quarters each year, we delivered feedback – good and bad – with the checks. If I had realized how powerful this was, I would have done a better job of figuring out and delivering the feedback, in the goal of creating a context for motivation for each person, and realigning goals each quarter.
I’m considering encouraging all the CEOs I work with to get rid of MBOs in 2014. If you insist of having a bonus plan, use a financial bonus for the entire company based on top down performance. This will be a calculation across the entire company and built into the budget at an EBITDA level (e.g. it has to be funded by the performance of the company, which could include a negative EBITDA number, but the bonus pool is linked to that.) Then, the CEO and the leadership get to allocate the bonus to each person on a direct performance basis at the end of the year.
Even better, consider using equity compensation as the bonus. Figure out an equation for converting the bonus amount (in current cash terms) to stock option awards. Then let’s set aside that pool, at the beginning of the year, to award at the end of the year based on the bonus achieved. Be transparent with everyone in the company about the size and determined value of the pool, how their behavior will increase the value, and then work like hell to achieve it.
I’m looking for feedback on this approach. A programatic bonus amount driven by company performance. Individual bonuses based on the discretion of the leadership team that add up across the company to the company bonus pool. No MBOs.
Matt Blumberg‘s amazing new book Startup CEO: A Field Guide to Scaling Up Your Business is out and shipping. The early reviews are great, including this detailed one from Tech Cocktail.
Matt’s book is already having an impact in my world. At Cheezburger, we just added Scott Moore to the leadership team. Ben Huh, the founder/CEO who I adore and love working with, send out a powerful email about how he’s approaching Cheezburger’s next stage of growth, and how he’s thinking about building the business operating system. He builds off many of the concepts in Matt’s book and told me I was free to blog this for the world to see.
Following is Ben’s email.
——–
Hey Cheezburgers,
After recruiting our new COO & President Scoot Moore, I am shifting one of my major projects to on boarding Scott. I’m kicking off the process of building the business Operating System for Cheezburger. This is a super important item that I am thrilled to get started on.
It’s perfect timing for us. As COO & President, Scott has management responsibility for a huge area of Cheezburger. By building the metrics, communication rhythms, reports, etc. I can really help Scott get a feel for our business and where we stand as we plan for 2014. It’s one part communication, one part feedback process, and one part creating clarity.
A business Operating System is a simple idea:
- Using the company’s values (of Truth, Excellence, and Happiness)…
- create a set of consistent rhythm for communications, meetings, procedures and decision-making…
- which helps align everyone’s goals with the ultimate objectives of the company.
Put in other words: A business OS is how we consistently and clearly communicate, hire, make decisions, etc. that help us do more faster.
In practice, this comes down to some answers to questions like this: (examples)
- When do we plan for the next year? And who owns the process?
- How do I measure my performance against my, or my team’s goals?
- I need another person on my team to help better reach my team’s goals. How do I go about doing that?
- I’d like to send out a company-wide update on something my team did. How do I do that?
- How do I know what I am working on aligns with the company’s goals?
- What metrics do we report company-wide? And why?
- etc. etc. etc.
It’s an idea I first heard from another Foundry Group CEO, Matt Blumberg. In fact, he’s written a book based on those ideas.
One of the key improvements you should see as a result of this should be more consistency and clarity in communications and processes. This is one of the reasons why I push for a single IT system like Google Drive vs having two, and why I want you to post content for dissemination in our intranet. I hope that the OS will help you see the bigger picture. The opposite of having an effective business OS is a company that is confused due to lack of clarity and unable to move in the same direction together, therefore missing goals and opportunities.
There are 6 key areas that I want to structure the OS around (this will evolve as I work with Scott and the exec team):
- Company-wide communications and meetings
- Creating, aligning, and sharing goals
- Measuring performance against goals and metrics
- Establishing cadence, rhythm, and deadlines
- Clarity in decision-making process, transparency, and openness
- Well-functioning systems and operational processes
For you, the impact will be that I will be talking about almost everything in the context of our Culture/Values, Goals/KPIs/Metrics, and Systems/Processes.
I shipped off the publisher draft of Startup Boards last night. For those of you who haven’t written a book that means I’m in the home stretch “pre-production” – I’ll have the final draft done by 9/3 and it’ll be published by December.
This has been – by far – the hardest book I’ve written so far. If you like my writing and want to do me a solid, pre-order a copy of Startup Boards today. That’ll make me smile.
The book was originally planned to come out this summer. My co-author Mahendra Ramsinghani wrote a good first draft. We got together in Miami for a week in February to work on it together. I was pressing for an end of February deadline for the publisher draft. While we made progress that week, I knew I was struggling. And not just with the book – I was depressed but I hadn’t yet acknowledged it.
By the end of February I just didn’t care about the book. I didn’t want to work on it anymore. And I knew I was depressed and just struggling to get my normal work done. So I told Wiley (my publisher) that I was punting until the fall. We reset the schedule with the goal of having the book out by the end of the year.
Mahendra was patient with me. I didn’t pick the book back up until a month ago. I’ve been working on it since the beginning of August and I made a hard push over the weekend to get it out to the door.
Saturday was a grind. I finally hopped on my bike at the end of the day and rode out to our new house in Longmont and then wandered over to my partner Seth’s house (a mile away) for a party he was having. On Sunday morning I knew it was in good shape. I spent all day Sunday in front of my computer except for lunch with Amy. I gave myself until 5pm, at which point I was going for a run. I had a superb, book fueled 75 minute run, had some dinner, spent one more hour on what I was now referring to as “the fucking book” and then sent it off via email to Wiley.
Man – this one has been hard. I hope it’s helpful.
Matt Blumberg’s new book, Startup CEO: A Field Guide to Scaling Up Your Business, is about to come out. If you are a CEO and haven’t preordered it, I recommend you go get it right now.
I had a chat with a CEO I work with who has had a challenging year scaling up his company. He – and the company – have made a lot of progress after hitting a low point this spring. After the call, he sent me the following note he has pasted on his desk.
1. Lead by example by holding myself and all accountable, no matter how hard.
2. Set the overall vision and strategy of the company and communicate it to all stakeholders.
3. Recruit, hire, and retain the very best talent and inspire them.
4. Makes sure there is always enough cash in the bank.
5. Be the advocate for the customer over the company’s short-term needs.
6. Drive the execution and evolve the operating system.
7. Champion the company and our mission to the world.
You might recognize #2, 3, and 4 from Fred Wilson’s magnificent post What A CEO Does. I give a talk for many of the Techstars CEOs called “How to be a Great CEO” and I focus the conversation around Fred’s points. Matt’s book also uses Fred’s three points as a framework. And when I think about how a CEO is doing, I always start with 2, 3, and 4.
I’ve come to believe that you can’t be a great CEO if you don’t do these three things. But, great CEOs do many more than just these three things. So – I view them as “price of admission” – if you can’t / aren’t doing these three things, you won’t be a great CEO.
I always encourage the CEOs I talk with to create a clear framework for what they are doing. What you are doing, and spending time on, will change over time based on the stage of your company. When you are 10 people, you’ll have a different set of priorities then when you are 100, or a 1,000 people. But having a clear framework for what you, and how you do it, is powerful.
I love what this CEO has done to make Fred’s framework his own. Notice that each sentence starts out with the imperative form of an action verb (Amy told me that – doesn’t it sound smart!) – basically a statement of action. Lead, set, recruit, make, be, drive, champion. Great words.
If you break it down, it also defines a value set for the CEO, and for the company.
Finally, you are going to hear a lot more from me about the Company Operation System (what you see in #6). That’s the essence of what Matt Blumberg has figured out in scaling up Return Path, and uses to define his approach to scaling a business in Startup CEO: A Field Guide to Scaling Up Your Business.
My experience with all of this is that it’s incredibly hard, breaks regularly at different points in the life of a company, and requires a great CEO to continually grow and learn from mistakes, adjust course based on new information, and work diligently at being honest with himself, his team, and his board about what is going on. But, if you get it right, it’s magical.
As Amy and I get to the end of Season 2 of Battlestar Galactica, I’m noticing more and more management and leadership lessons. Oh – and it’s awesome SciFi.
In my experience, it’s a challenge for CEOs and management teams to get focused on a small set of numbers that drive behavior. I talked about this in my post Three Magic Numbers. I regularly suggest that you should only have three numbers that you focus on daily – that reflect “what is going on right now in the business.”
You should be able to discern what is going on from the daily trend of these numbers. Sure – you’ll look at plenty of other numbers, but these are the three you focus on every day. You don’t need fancy tech for this – just a white board.
If you are a BSG fan, you’ll recall the white board behind President Roslin’s desk. It has one number on it. The number of survivors alive at that moment. This number started showing up in the opening credits some time in Season 2, and after a few episodes I noticed it changing each time in the credits, often based on what had happened in the previous episode.
This is BSG’s KPI. The number of humans alive. Right now.
When I reflect on this KPI, I realize it drives all the behavior on BSG. The easy behavior to focus on is keeping the number from decreasing. But as Gauis eloquently states late in Season 2, if the trend line continues, based on a complex regression analysis he’s done, the human species will be extinct in 18 years. Soon after, Admiral Adama reminds Roslin that the number generally just goes down, and that Roslin had said early on that if the human species is to survive, the colony needs to start “making babies.”
This is an obvious set up for a much more complex social issue – that of pro-life vs. pro-choice. But obvious set up aside, Adama is focusing on the KPI and reminding Roslin that the goal is for it go up, as well as not go down. It turns out there is a lot of richness in the number.
In my world, as companies grow, I notice a proliferation of KPIs being tracked. On a periodic basis, I encourage CEOs to keep paying attention to all the numbers, but surface – on a daily basis – the three magic numbers that drive their business.
Do you know your three magic numbers?
I’m doing a one hour CEO roundtable on an “about weekly basis” with each of the Techstars classes. Yesterday I did a face to face with the Techstars Boulder CEOs (they are across the hall from my office) and then I did my meetings with the Techstars Chicago CEOs and the Kaplan EdTech Accelerator CEOs by video conference.
This is a new experiment for me. I’m trying a different approach to mentoring the Techstars teams this year. I’m still a lead mentor for two of the Boulder teams (Kato and SnowShoe) but for all the other programs, including Boulder, I’m trying a weekly one hour CEO only session.
One of my big goals is to generate more peer interaction between the CEOs of the various companies. We do this aggressively within the Foundry Group portfolio and it’s one of the really powerful things about Techstars. But historically it’s been adhoc and random, rather than in an organized way. This is an effort to get the CEOs to really bond with every one of the other CEOs during the program.
So far the experiment is working great from my perspective. I’m stunned by the depth of the conversation and I can see the relationship dynamics being very broad as well as intellectually and emotionally intense.
Each of the three meetings yesterday were totally different, as Techstars Boulder is in week 8, Techstars Chicago is in week 4, and Kaplan EdTech is in week 2. As I was taking a shower this morning, I kept thinking about the rant I went on during the last 10 minutes of the meeting with the Techstars Chicago CEOs.
By week 4, a team is deep in things. The stress is showing. Everyone is tired and working at their max capacity. They’ve been exposed to a wide range of mentors and lots of conflicting data. Stuff is breaking all the time. Everything is uncomfortable and – in some cases – distressing.
In reaction to a particular conversation, I strung together quotes from three of my favorite books about entrepreneurship. The rant went as follows:
- “It’s not that I don’t suffer, it’s that I know the unimportance of suffering.” – John Galt in Atlas Shrugged
- “Fear is the mind-killer.” – the Bene Gesserit is Dune
- “Anxiety, the next gumption trap, is sort of the opposite of ego. You’re so sure you’ll do everything wrong you’re afraid to do anything at all.” – Robert Pirsig in Zen and the Art of Motorcycle Maintenance
I used the quotes as the anchors on a longer rant, but I did it extemporaneously. I hadn’t realized how nicely these quotes fit together until this particular moment, prompted by the particular situation. In hindsight, the only quote I forgot was my favorite of all time – “Do or do not, there is no try.” – Yoda.
And – it reminded me that three books should be on every Startup CEO’s reading list along with Matt Blumberg’s new book, Startup CEO.