Posted: May 12th, 2010 | Author: Robert Shedd | Filed under: posts | Tags: best practices, building startups, dreamit ventures, startups | 5 Comments »
This past weekend was the kickoff event for DreamIt Ventures’ 2010 program. The program, considered as one of the top three accelerators in the country, received over 350 applications for its third class, per opening remarks from co-founder Mike Levinson.
On Monday, I wrote about some of the lessons that the 2009 DreamIt Ventures alumni panel spoke about at the kickoff event for the 2010 cohort. Following this panel session was a presentation by Steve Barsh. Steve was the DreamIt partner who ran the day-to-day operations last year, but he’ll be taking a somewhat reduced role this year, as his main focus now is his newly launched startup that’s a marketplace for great last minute deals on vacation rentals, PackLate.com.
As always, Steve had a ton of great thoughts for the companies. His presentation was a collection of startup tips and tricks, to get the companies in the right mindset for the first day of the program (which was Monday). Here were some of the highlights of his talk:
- Steve talked about some of the common problems startups face. One of the key issues he mentioned was early-stage startups commonly looking for validation from investors, and thus attempting to raise money from investors too early (More on Steve’s blog). Steve told the DreamIt companies that you don’t need any funding to go out and ask your customers if they would buy your product if you built it. And if they say no, you can ask why not and dig into what their concerns are. For more, see Steve’s blog post on the topic.
- He covered the concept that every startup has a number of key assumptions and that the companies want to be looking for ways to kill these off as early as possible during the summer. Remove these assumptions to increase the probability that your business will succeed, but also if you are going to look for funding at some point down the road, this is one of the best ways to improve your valuation. (Post on Steve’s blog)
This concept of de-risking your business plan was an extremely transformative way of looking at building startups for me last summer and I hope that this important concept was driven home for the new founders in a similar way.
- Steve spoke about how a startup’s job is to learn as quickly as possible – to run through a maze filled with a ton of dead ends, realizing that you’re heading towards one of these dead-ends as quickly as possible, and pivoting to start off on a new route.
To this end, each week, you should be figuring out what you can learn, what experiments you’re going to be running. What marketing experiments? What product experiments? Pitch experiments? Set a hypothesis and then go off and prove or disprove it. Build a minimum viable product, release it, learn, improve, and release again. Along those lines: If in retrospect, you look back at your first product and you’re not embarrassed by it, then you waited too long to release it.
- Steve also talked about the importance of not sitting there and debating these learnings amongst your team. A/B test everything. Think people want a new feature? Put a button on a page and see if people click on it. Put Google Adwords up and see what people click on – refine your pricing and positioning via this methodology. Steve has some good tips on these techniques here and here on his blog.
- He shared an interesting way of looking at startup strategy: every single day, what can you do to gain an unfair advantage? What can your mentors, advisors, board, university connections, LinkedIn, etc. do to give you an unfair advantage? Can you call in favors from friends? Can you get in touch with a key contact through a fellow alum? Figure out what you can do to give you an edge over your competitors – you are in this to win. In that vein, start building your networks on LinkedIn – those shared connections will be the basis of your personal competitive advantage.
- Steve shared one of his classic tips that I’ve always thought was one of his best: he suggested that the companies, as they’re meeting with investors this summer (for advice – most are too early stage to be pitching for real), end their conversation with this question: “If you would ever consider making an investment in a company like ours, what would it take for you to make that investment?” I love this question, because it’s a great way for the entrepreneurs to get inside the investor’s thought process, and get some insight into the kinds of issues that they’re going to need to address before they can have the follow-on investment conversation for real.
- Steve closed with this bit of advice: You are getting on a roller coaster. You are going to have great days. You are going to have days where you’re ready to pack up shop. Stay stubborn and focused, but keep looking for pivot opportunities.
And so many more great thoughts and ideas. The summary recap hardly does the presentation justice. So, the presentation is embedded below – check it out.
In many ways, Steve offered similar thoughts and techniques to what he presented last year at the DreamIt kickoff event for the 2009 companies, however, I think the presentation was much richer this year. For the better part of the past year, Steve has been living the early stage startup life again and putting all of these techniques into practice with PackLate.com. All of the lessons learned really came through in this talk. Tons of great advice for the DreamIt companies – hopefully, they’ll take a handful of these and put them into practice. And just like that classic novel that every time you read, you get something new out of it, there were even things for the DreamIt alumni in the audience to take away and put into practice. Certainly, if you ever get the chance to hear Steve speak about his tips for startups, take him up on it – there will certainly be something worthwhile for you and your business.
Check out the presentation for yourself, from SlideShare:
EDIT: The presentation has been embedded.
Posted: May 10th, 2010 | Author: Robert Shedd | Filed under: posts | Tags: best practices, dreamit ventures, startups | 2 Comments »
This weekend was the 2010 DreamIt Ventures Kickoff Event in Philadelphia. It was great to see 15 new startups in the Philadelphia area, buzzing with activity and ready to get started. The kickoff events were held at the soaring Comcast Center on the 45th floor, an exciting venue that helped amplify the energy.
Lots of folks from the Philadelphia startup community attended and there was a ton of good advice dolled out to the incoming companies. Two segments of the weekend, in particular, captured some good lessons for the 2010 DreamIt companies. I’ll recap these from my notes in two posts.
The first segment that I want to summarize was a panel session with three companies from the 2009 cohort: Jack Groetzinger from SeatGeek.com, DJ Stephan from Notehall.com, and myself for FanGamb. Clearly, having been on the panel, I’m a bit biased, but I felt there were a lot of good points made.
A summary of some of the important takeaways from the panel discussion:
- There’s more than one way to build a startup.
- SeatGeek launched at TechCrunch 50 and raised a good sized series A VC round.
- Notehall.com was featured on ABC’s SharkTank program in October and closed a moderate seed round.
- FanGamb closed a family & friends round in the fall to continue iterating the core game (something larger in the works that can’t yet be disclosed).
- The message: There are lots of different funding options. Find the one that works for your business. Raising VC funding isn’t the only definition of success. The longer you hold off on raising funding and the less you raise, the more options you keep open and the more ownership you maintain, generally. Another point by Jack: when raising funding, put one person in charge of the process and send him/her to the meetings only – don’t let the process distract your entire team, keep them focused on building the product.
- Don’t be afraid to pivot.
- SeatGeek grew out of the largest pivot from DreamIt ’09. The founders, Russ D’Souza and Jack Groetzinger, were accepted to DreamIt with an entirely different business – Scribnia.com, a blogger review platform. They sold this business in June 2009 and built the SeatGeek prototype in 1.5 months in time for Demo Day. The message: no matter what pivot you’re considering, it’s not bigger than changing your business entirely, so keep all options open.
- Notehall changed the way it sold notes at campuses. Originally, it gave notes away for free to kickstart the market, but advisors were suggesting they try another model. Finally, after months of ignoring this advice, they finally piloted a different model and found it to be hugely more successful. The message: be open minded – the DreamIt partners and your mentors may not know your market specifically, but they know how to grow businesses. Be true to your vision, but be open to trying other models.
- FanGamb pivoted with regard to two aspects of its model – how to drive engagement and its business model. Regarding engagement, a key assumption was that badges and leaderboards (i.e. social proof) would be enough to drive users to be engaged with the site. To a point this was true, but never to the level expected. Similar, virtual goods were expected to be a key monetization engine for the site, however, without the high levels of engagement, this wasn’t effective as a first step. As a result, the FanGamb team tested multiple options and is in the process of implementing a new model (again, no specifics currently – news coming soon). The message: get your core user base using the product as soon as possible, throughout your iterations and test your user acquisition methods, too. We wrote off early user behavior because we were testing with a different sport than we would launch with in the fall, but in retrospect should have taken a harder look at the data.
- What do you think some were some of the key factors that led to your companies succeeding, versus those that didn’t from your DreamIt cohort?
- Don’t die – find a way to pivot. In nearly every startup concept there is a nugget of truth/value – you need to distill your concept down and figure out what that is as quickly as possible and make course corrections along the way. Startups are a process of going down as many dark alleys as you can before you run out of motivation and money.
- Get real customers using the product as soon as possible and find out what they really think. (Side note: it was amazing how many of the DreamIt startups talked about the status of their customer development efforts in parallel with their product development efforts in their overview/status talks – quite a change from a year ago, really showing how the lean startup methodology has taken hold. Seems to be effective lean startup, too, not lean washing…)
- Solid, stable teams that put in a ton of hours (the three companies on the panel represented teams that put in some of the most hours throughout the program – SeatGeek put in 36+ straight at one point, winning the prize for the most time in the office) — this wasn’t specifically mentioned during the panel, but was an observation we noted afterwards
Certainly lots of good thoughts and lessons learned from the panel. More great thoughts and startup advice from Steve Barsh’s Kickoff presentation coming in a future post.
Posted: April 6th, 2010 | Author: Robert Shedd | Filed under: posts | Tags: dreamit ventures, entrepreneurship education, mentoring, penn state | 1 Comment »
In the last month, I enjoyed having the opportunity to advise a couple of Penn State teams in their entrepreneurial pursuits. It was exciting to talk with other Penn Staters interested in turning ideas into sustainable ventures and be able to share some thoughts with them.
I was happy to see that of the students that I was advising, one team was recently accepted into the DreamIt Ventures program and another team won the Penn State IdeaPitch competition (the university-wide business plan competition)! As an added “bonus”, the team winning the IdeaPitch competition was from the College of Information Sciences and Technology. Congrats to both teams!
I’m looking forward to watching Penn State’s leadership in entrepreneurship education continue!
Posted: February 22nd, 2010 | Author: Robert Shedd | Filed under: posts | Tags: dreamit ventures, seed stage accelerator programs, startl, startups | No Comments »
More new programs in the world of seed accelerators. Below are the additions that were just made to the master list.
Also of note: JÃ¼ri Kaljundi created a great list of many of the programs with their upcoming application deadlines.
It was exciting to read recently about Startl’s new partnership with DreamIt Ventures. Startl is focused on improving education and is partnered with major organizations (Gates Foundation, Hewlett Foundation, MacArthur Foundation, IDEO) in addition to DreamIt Ventures.
I like co-founder and managing director Phoenix Wang’s view (from the Fast Company interview) on why the program was created:
Traditional foundations like the National Science Foundation give away millions every year to support lots of innovative ideas in education, but there isn’t an infrastructure that takes these ideas across the entrepreneur’s “valley of death.” If you look at the Internet industry there are incubation hubs, university labs, public/private partnerships–a fertile ground that supports different people at different stages for different purposes.
In education that layer doesn’t exist. There’s an emerging set of young players who really want to change education in fundamental ways and they have nowhere to go. It’s about money, but it’s also about the networks, expertise, cultivation, and insights to figure out how to be a good entrepreneur. So that’s how STARTL was born.
Sources: Twitter, numerous blog posts. The New York student programs were listed at http://bianys.com/student_incubators
Posted: February 21st, 2010 | Author: Robert Shedd | Filed under: posts | Tags: best practices, dreamit ventures, seed stage accelerator programs, techstars, thoughts, y combinator | No Comments »
A few weeks ago, I posted some advice to entrepreneurs applying to the various seed programs. As the deadlines loom, I’m sure that many more are in the process of tackling the application. I’ve been reviewing some applications for DreamIt Ventures and based on some of what I’m seeing in those reviewed thus far, I wanted to put some additional advice out there.
- Put some thought into the applications. The program coordinators aren’t expecting an essay for each response (in fact, it’s good to be succinct), but one sentence responses to questions that don’t demonstrate any effort, thought, and/or motivation are not going to help your cause. Motivation is big – not showing any in your application begs the question if you’ll have the energy and drive to push a startup through to success. Remember, this is an application for thousands of dollars and hours upon hours of mentoring. Inspire some confidence that you can take advantage of this and harness it to achieve what you proclaim. As an example: In response to the questions around competition, don’t just say something to the effect that “There is no competition. We are the only ones who have been smart enough to think of this idea.” First off, it’s a red flag that you don’t think there’s any competition – there’s usually always something you can point to. Second, even if there’s nothing you feel competes directly, use this as an opportunity to emphasize your competitive advantage. I focused on the competitive question because that’s one that stands out to me, but this is equally true of any question on the application. Take some time. Think. Don’t take the easy way out of a question. That’s the fastest way to get a rejection.
- Co-founders and the product. Everyone who writes one of these advice posts talks about the quality of the team. Even though (in general) single founders are red flags, do not just add a co-founder because you need a second warm body. Make sure they add something to the overall package. And if both of you are business grads and have only studied marketing, let’s be realistic – how is the product going to get built? The product is an integral aspect of any startup, so you’d better make sure that your application shows evidence of how you’re going to be able to make something. Not having a dedicated technology co-founder, is a red flag, but if you’re thinking there’s some other way to implement your plans, you had better be extremely detailed in explaining your thinking. And when describing your tech co-founder’s experience in the application, this is when it’s important to illustrate relevant past work. Please don’t just toss in generic buzz words – people with tech backgrounds will see through you and discredit you. Demos, prototypes, mockups – any kind of code will help to demonstrate that there’s something to your team.
- For the love of all that is good, don’t simply submit an application that is a blatant clone of one of the program’s earlier portfolio companies. First off, the partners have been advising this company for almost a year at this point. There’s a very good chance they know as much about the market as you – you’d better make sure you show that you’re an expert in the space. Any gaps in your thinking will be extremely evident. Second, you’d be well advised to show some original thought and differentiate yourself somewhat. It’s been nearly a year since the original company was accepted. The market landscape for startups shifts extremely rapidly. As such, logic bears that something must have changed or progressed. The original startup has learned and evolved. Does your idea show the same evolution? In general, I would be cautious about cloning ideas – I think there’s little reason to accept them and furthermore, if you’re showing the kind of forward thinking and innovation that these accelerator programs promote and encourage, then you’re probably not going to be an exact clone anyway. Iterate and evolve. You’ll be doing it all summer anyway.
Finally, I can’t overemphasize the importance of building a dialogue, as I wrote earlier. Don’t wait until the last minute! Allow time to have a conversation! But also, the strongest applicants find ways to go beyond the application form to show the program that they’re motivated and have what it takes to get stuff done.