Five Kinds of Startup: Digital

Packaging, Access, Adoption, Tailoring, Evolution

12.1.16


The last two installments of the Five Kinds of Startup Series have been cake. I can pretty much explain what a Product Startup does in four words: Make something, sell something. The same thing is true for Service Startups: Do something, get paid.

This is not true for all startups. And it's especially not true for Digital Startups.

While all businesses are unique, there are really only a few kinds of startup. How these companies operate, grow, and succeed will depend on what kind they are. Thus, a lot of the decisions you will make and paths you will take will depend on what kind of startup you're running.

I debated calling this category Information Startups or Data Startups, because I believe those terms make it easier to understand the type. But ultimately, those are really just subcategories of a greater whole.

For example, the most obvious (and overdone) example of an information startup is a social network: Facebook. If you think of a photo of someone's lunch as a computer file broken down into millions of bits of data and passed over the Internet tubes to be accessed by potentially billions of people, you've got the components of information, data, and content startups. So the Digital Startup is really about collecting, packaging, and delivering those ones and zeros, whether they form a jpg file or a massive database of sales information.

This means that Digital Startups are a bit of a riddle. So before we dive in, let's make sure we're all talking about the same thing.

read the rest at: http://teachingstartup.com/five-kinds-of-startup-digital.asp






Start Your New Year's Resolutions In December

Forget Goals. If You Want to Succeed, You've Got To Prepare

11.28.16


There you go. There's some of my best advice, right there in the title and subtitle. If you want to stop right here and just go and execute on that advice, go nuts. I won't hold it against you. Get started.

In the rest of our time together, I'll explain why I'm giving that advice, so you'll understand that I'm not just putting words into neat sentences to make myself seem smart.

I'm not a believer in New Year's resolutions. For that matter, I'm not a huge fan of locking into any goal and putting blinders on to get there. Yeah, I know, you hear this kind of thing all the time -- in sports in relation to championships, in academics while striving towards a big test, in the workplace barreling forward to the end of the quarter or the fiscal year.

But this advice is not for you, it's for the drones.

A good coach tells his or her players to march forward with blinders and earmuffs and keep chopping and grinding and all sorts of cliched useless platitudes while keeping eyes on the prize with one heartbeat to shock the world.

But the coach is not marching to those orders. The coach is constantly monitoring and reassessing and changing the game plan based on perpetually incoming new information.

The coach knows there's no direct route from the beginning of the season to the championship. The coach is working his or her butt off to lay new path just ahead of the team and building walls on either side, while telling them that this path was there the whole time and they should just focus on that newly laid piece of path that he or she just put down.

In life, you're not the player. You're the coach.

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Survive, Advance, and Move On

Doing the Wrong Thing for the Right Reasons

11.17.16


At the end of this past summer, I wrote a piece about bribing my daughter to play soccer.

It's not as awful as it sounds.

Let me break it down real quick.

See, at the end of last spring season, she had just barely aged out of her bracket, born less than three weeks after the cutoff and gifted with my height and growth cycle, my 11-year-old mighty mite found herself placed on a u15 team in a different league.

Now, that's not so bad. I'm all for a challenge. But it turns out, the team she got placed on had been together for a couple seasons with a coach who was super (but not overtly) competitive. These kids were playing to win. They all knew each other already. They were good. They were winners. And they wanted nothing to do with this pipsqueak new girl.

The first practice was an unmitigated disaster. They wouldn't talk to her, let alone pass to her in drills or tell her what she was doing right or wrong. And when compared to her former, all-girl, 10 & 11-year-old team, these dudes were twice as big, ran three times faster and longer, and fought five times as hard.

To put the final nail in the coffin, the only other girl on the team (a 13-year-old) quit before the second practice.

I got all of this news on my way home from work the night of that first practice, and was further told that she was absolutely, positively not going to play on this team, which meant she would not be going to the next practice after school the following day.

I had 20 hours to fix this. With bedtime and school, I had 45 minutes.

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Five Kinds of Startup: Service

Expertise, Viability, People, Overhead, Scale

11.15.16


When we talk about the ingredients for successful startups, one of the primary rules is: Find a problem a lot of people have and solve it. Product Startups, as we discussed last time, take the long road to complete that journey. It's a daunting undertaking to try to solve a problem with a thing. It's a much more direct route to solve a problem with people.

We live in a society of perpetual progress, and this progress continues to create opportunities for doing things for other people that they can't or don't want to do themselves, because they're either lacking in the latest knowledge or they're just short on time.

So if you're really good at something, you can probably create a Service Startup around it, as long as you can do it more cheaply and more quickly than they (or anyone else) can.

This is not as easy it sounds. You may be an expert in computer software, accounting, plumbing, interior decorating, or shopping. You may be the person to whom everyone runs when they have a problem they can't solve. You may even have a part-time gig making a little side money off people who find your expertise worth paying for.

The big question is: Can you make a business out of it?

While all businesses are unique, there are really only a few kinds of startup. How these companies operate, grow, and succeed will depend on what kind they are. Thus, a lot of the decisions you will make and paths you will take will depend on what kind of startup you're running.

Service startups are fairly common. They spring from a wide range of industries, talents, and offerings, and they usually start out as a single operator who realizes he or she can do all of those things their employer is currently doing for them -- finding new business, providing access to equipment and training -- with a shot at more control, as well as better salary, benefits, and working conditions.

read the rest at: http://teachingstartup.com/five-kinds-of-startup-service.asp


Good Job, Baseball

The 108-Year Drought That Saved The Show

11.4.16


Baseball finally righted itself early yesterday morning when Cubs third baseman Kris Bryant came up smiling before making a laser throw to Anthony Rizzo for the final out of the 2016 World Series.

It only took 22 years. Not even a quarter of the time it took for the Cubs to become World Champions again.

I was introduced to the game of baseball by an unlikely teacher. My grandmother, Angelina Procopio, came to America as a little girl, and immediately fell in love with the New York Yankees of the 1940s and 1950s. Her favorite players, Joe DiMaggio and Phil Rizzuto, were models of the American Dream with an Italian heritage.

She introduced me to the Yankees shortly after I could walk, and my first memories of baseball are of those late 1970s teams -- Reggie Jackson, Bucky Dent, Graig Nettles, Ron Guidry, Goose Gossage. I'd listen to broadcasts on an AM radio and drift off the sleep nearly every night from April to October.

Baseball was my jam.

When I was old enough to play, I found another player to love. Sure I had loved Reggie and Bucky and Dave Winfield, but I had never seen anything like Ozzie Smith. While my size and power weren't working for me on the ballfield, I did have good hand-eye (thanks, video games!) and quickness. Ozzie, a small contact hitter and defensive genius, was my spirit animal, and by the time he executed his first backflip in the 1982 World Series, he was my hero.

I loved baseball, everything from the numbers to the smell of the grass to belting out Take Me Out To The Ballgame as loud as I could, every time, without fail.

Then 1994 happened.

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Five Kinds of Startup: Product

Invention, Construction, Sales, Delivery, Support

10.31.16


So you've got it. You've nailed it. You've discovered the missing link that's going to change the game, the world, and millions of lives.

OK, first thing, someone has probably already done it. But don't let that stop you.

There are a million kinds of startups out there and a million more that haven't made their way off paper yet. Each one is unique, sure, but deep down, there really aren't any completely new ideas. The trick to startup is to get as close to a new idea as possible and then execute on that idea faster and better than anyone else.

There are different ways to accomplish that, and the differences are rooted in what kind of startup you've started.

In this series, I'll spend a lot of time talking about the startup lifecycle. What that means is not so much the journey from idea to reality (see Five Stages) or from garage to IPO (see Five Funding Sources) -- it's really more about the journey from the birth of whatever it is you're offering until that offering is a market success.

While all businesses are unique, there are really only a few kinds of startup. How these companies operate, grow, and succeed will depend on what kind they are. Thus, a lot of the decisions you will make and paths you will take will depend on what kind of startup you're running.

Product startups are what we think of when we think of traditional garage-based, mad-inventor startups. If you're building something that you sell and deliver, you're a product startup. The right ones usher in sweeping changes in the way we do things -- like the smartphone, the search engine, and the electric car.

Keep in mind, however, that the iPhone was not the first smartphone, Google was not the first search engine, and the Tesla was not the first electric car. Far from it. I'll say it again, there aren't many new ideas out there, but the three products I just mentioned were done faster and better, admittedly with a little right-place-at-the-right-time magic for good measure.

Entrepreneurs make some classic mistakes along the product startup lifecycle. There are a number of things you must do at each step that, while doing them won't necessarily guarantee success, they will at least reduce the risk of failure.

Let's talk about those steps.

read the rest at: http://teachingstartup.com/five-kinds-of-startup-product.asp


Six Guys, Two Cameras, and a Hurricane

Why Teaching Startup: The Show Will Succeed

10.20.16


Forgive me, and this is a long-tail forgive me, but I'm about to do something stupid.

I want to flush away any preconceived notions of entrepreneur post-exit experimentation, or maybe even mid-life crisis. Hell, this might just be a poorly executed ego trip, the one where my left brain and my right brain finally have it out in the most awkward way possible.

In fact, you know that scene at the end of the series run of The Office, the British one, when David Brent falls into some money and immediately blows it all self-producing (and over-producing) a pop song and accompanying music video -- living the life he always imagined he was destined for in a humiliating end story for the character?

That's keeping me up at night right now. And man, that arc was brilliantly written.

Last weekend, I got five other dudes to show up wicked early on a Sunday morning, which also happened to be the morning after Hurricane Matthew blew through the state. I mean, we didn't get the brunt of it here in the Triangle, lots of power outages and downed trees, one of us had to skip a shower, I had to go to three different places to find coffee. That kind of first-world thing.

Anyway, two of them, Kyle and Sean from Interbrew, were there with a bunch of equipment to guerilla-shoot a few hours of video. Video of what, you're probably not asking, so I'll use a device to get to the point? Video of four of us entrepreneurs at different stages of our careers talking about whatever the hell we felt like talking about.

And it was awesome.

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Startup, Standup, and the Importance of Being Funny

Yes. Ha-Ha Funny

10.17.16


For the last few years of my startup journey, with wisdom behind me and old age in front of me, I've been more of the mind that startup must be fun in order to be successful. So when one of the young(ish) dudes I'm mentoring told me that one of his goals for the next six months was to do 20 minutes of standup at an open mic night, my day immediately got 100x better.

And look, I don't mean to oversimplify the concept of fun when I talk about startup. I'm not talking about shoehorning beer Fridays or a ping-pong table into the culture at an early stage. In fact, those two examples themselves are played and silly.

Beer Fridays are stupid. There's no better way to lower productivity and open all sorts of liability windows than plopping a keg into the middle of your workspace at noon on a Friday. Plus, I've always been of the mind that drunk is drunk. If I'm going to have a beer, I'd much rather have six than two (be responsible, kids), so I make sure of things like not having to drive and, you know, not having any laptops around.

And there's a startup I get to walk by sometimes (trying to keep this anonymous) where they have a ping-pong table tucked into the corner of their office, where it's sat since they've been there. I've never seen even so much as a sign that anyone has ever played a game -- the table halves have always been askew, you know, not completely flush. But I'm assuming said startup thought it was mandatory to make their place a fun place to work.

Startup culture is deeper than that, it should permeate every seam of the fabric of the company.

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Five Funding Sources for Startup: Venture Capital

Accelerators & Incubators, Seed Stage, Early Stage, Expansion, Exit

10.13.16


There's so much to talk about with Venture Capital funding, so here's what I won't be talking about.

I'm not going to discuss all the varieties of financing that can be a part of VC funding, like bridge financing or down rounds. I'm going to stick to the basics and compress a few things. I like to cover the entire universe at a high-level, so you know what the game looks like. There will be plenty of time to drill down into specifics here and elsewhere.

I'm not going to give any advice on how to find, contact, or pitch VCs. That's been done to death and, in my opinion, there's no single right way.

I'm not going to talk about the funding process, i.e. term sheets, preferred shares, amended articles of incorporation, and so on. Why? See the previous two things I'm not going to talk about.

I'm not going to tell you whether or not you SHOULD focus on VC, but I will tell you this:

Fundraising, especially when it involves VC, is a long, painful, time-sucking process. It is a full time job. It will drain your resources and your sanity. It is not a measure of success, but it can pave the way to success. It can be dangerous, depending on who ends up with their hands on which control levers. It can be life-changing, when it comes at the right time for the right reasons.

If you don't know whether or not you need VC funding, you don't need it, because you're not ready. You should know exactly how much you need to raise and exactly what you're going to do with the money. You should already have relationships in place at a handful of Venture Capital firms before you make the decision.

But if you've already run the investor gauntlet of Customers, Self, Friends and Family, and Angel, and if you know you need VC funding, and if you know who you're going to reach out to first, second, and fiftieth, then it's time. Here's what the universe looks like:

Funding is the most complex part of startup. How, when, and why you get funded is an individual series of choices, and every startup will take a different path. No one strategy is better than another, but you should definitely have a strategy in place before you raise a dime.

Venture Capital investors are firms that manage funds that invest in startups. VC is what we think of when we think of traditional startup investment, and their money is often referred to as institutional capital (which mostly means the money is not coming from a single individual).

VC firms are usually staffed in a chain with Partners at the top. Limited Partners are investors in the fund, while General or Managing Partners are investors in the fund and also run it. Venture Partners and Principals find and make deals for the fund, and may or may not be invested. Associates are at the bottom of the chain. They create relationships and do research, but often don't have the authority to green light a deal on their own.

Some VCs will invest small amounts as early as the Seed Stage, alongside the founder, Friends and Family, and any Angel investors. However, most VCs won't invest until there is progress beyond the Seed Stage, what's called a Series A round. From there, additional rounds will be called Series B, Series C, and so on.

VCs are always looking for a return on their investment, either through the sale of shares in an Initial Public Offering (IPO) or via merger and acquisition, where the company is sold to another company or to another financial entity like a Private Equity Fund. Sometimes VCs are bought out in future Series rounds when new VCs come in.

In almost every case, once you're in the VC world, you're not getting out until the company sells, which is called the exit. Oh, you're going to need legal and accounting help on hand during the fundraising process and retain that help through the actual funding.

read the rest at: http://teachingstartup.com/five-funding-sources-for-startup-venture-capital.asp


Five Funding Sources for Startup: Angel

Established Angels, Angel Groups, Entrepreneurs, Retail Investors, Investment Crowdfunding

10.6.16


In the prior three installments of the five funding sources series -- and I do recommend that you read all three -- the sources I covered share a common trait in that investing in your startup is not their primary role.

Customers, of course, play a much more vital role as your company's lifeblood. If an investor sours on you, you're in trouble. If your customers sour on you, you're done.

Self is you. And your role is to build the best product and best company that ever existed. Your investment, in terms of cash, will play its part in getting all of that started, but your time, your energy, and your leadership are the most valuable resources you can contribute.

Friends and Family bring their own issues along with their investment, and those issues will mainly revolve around managing your relationship with them as investors. That said, their existing relationship with you -- as friend or family member -- will, in most cases, come first.

With each of the final two funding sources, their primary role is as your investor. There should and most likely will be added value from these sources, in everything from connections to advice to even office space. However, when the documents are all signed, these investors are expecting a return on their investment.

So let's talk about who they are.

Funding is the most complex part of startup. How, when, and why you get funded is an individual series of choices, and every startup will take a different path. No one strategy is better than another, but you should definitely have a strategy in place before you raise a dime.

Angel investors are individuals who invest in private companies as a part of, or in lieu of, a portfolio of retail investments, like stocks or real estate.

Angel investors are actually kind of hard to pin down, and thus are sometimes the most overlooked source of capital in startup. This is not surprising though, because it's easy to get confused about the definition of an Angel, their role, and how to find them.

If you think of Angels as people with a lot of money and high risk tolerance, you're not too far off. They invest their own money. They can operate independently or as a part of a group. Some specialize in certain sectors or technologies, while others invest in whatever they think is cool. Some take almost no active role with the startup, others will want to be a formal advisor or even a part of the management team. Some make a lot of investments, others might make only one or a few.

So just about anyone with money can be an Angel, right? Well, that's close.

read the rest at: http://teachingstartup.com/five-funding-sources-for-startup-angel.asp


Stay Sane and Tune Everything Out

Protect Your Empathy

10.3.16


Scrape 'em off, Claire. If you want to save someone, save yourself.

If you can laugh at that line (Scrooged, Bill Murray, 1988, classic), then the speaker is probably not you, and that's good. It's certainly not me. I have empathy, a lot of it, and it's usually good for me. When presented with a moral or ethical challenge, I'd say 90% to 92% of the time, I come down on the right side of things. I'll even take the time to think through some of the murkier stuff, which, in this age of the death spiral of nuance, is not always an easy or quick thing to do.

But I've had to learn to be colder, and by colder I don't mean colder to a fellow human being when confronted with said moral/ethical opportunities, but rather colder to humanity in general as they perpetually scream misinformation at one another.

You can take a look at almost any newsworthy issue these days and I guarantee you there will be two sides to it. How can I make that guarantee, which I assure you is iron-clad? Because there are two sides to everything. There always has been, and there always will be.

The aforementioned death spiral of nuance is causally tied to to the rise of unchecked outrage, and more than coincidentally follows the timeline of making a bunch of money by getting people all worked up. You know this is true, I know this is true, but we still fall for it almost every single time.

I mean, we can all agree that Internet news article comment sections are the scourge of humanity, yet almost every single professional news gathering site still employs them and rarely policies them.

What does that tell you?

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Let's Talk About Why Stock Photos Are Evil and Depressing

9.30.16


I guess it all started when I founded Exitevent, some five years ago. I mean, I've been writing on the web forever, almost as long as there has been a web. Angelfire long. Geocities long. But when I started the content side of ExitEvent and started publishing articles on startup three to four times a week, I knew from the beginning that each article had to be accompanied by an image -- a picture that, in one glance, would cleverly summarize the point the article was trying to make.

Yeah. That's what started my decline into the soul-killing world of stock imagery.



I founded Intrepid Media, the first-ever social network for writers and probably one of the first-ever social networks, in 1999. Back then, we weren't putting images on anything, except once in a while when the image captured the actual subject of the article. Images were a rarity for a number of reasons:

1. Digital cameras weren't as prevalent back then.

2. Thus, the Internet was still mostly a textual medium.

3. Most of the world was on dial-up, and images made pages take forever to load.

You kids don't know how good you have it today with your Snapchat and your Periscope.

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Five Funding Sources for Startup: Friends and Family

Family, Friends, Associates, Network

9.28.16


"Hey Dad, can I borrow $50,000?"

I know. A single sentence that's so wrong on so many levels.

When we talk about Friends and Family investment, there are a lot of landmines to tiptoe around, and most of them have to do with personal circumstances. So let's look at that opening sentence again. We'll break it down and we'll start stepping on landmines. Together.

Funding is the most complex part of startup. How, when, and why you get funded is an individual series of choices, and every startup will take a different path. No one strategy is better than another, but you should definitely have a strategy in place before you raise a dime.

First of all, most people think of Friends and Family investment as an opportunity reserved for an elite few. This is not the case. You don't have to have wealthy parents or run with a Wall Street crowd to tap Friends and Family money. The fact is, a lot of people, including people you know, invest their money one way or another.

And that's what you're after. This isn't a handout, this is an investment. A sale. The exchange of cash for a piece of your company.

You're not likely to luck into a $50,000 windfall -- those dreams of fully funding your startup via a rich uncle or a friend of a friend of a friend are just that, dreams. With Friends and Family investment, you ideally want to raise just enough cash to get to your first customer.

But even if your family and friends have the means to invest, there's the gross part of having to ask. There's always something sketchy-feeling about asking someone you know for money, no matter how much you believe in your ability to create a return on their investment.

Finally, we're going to have to talk about relationships, and it's going to get sticky. If you've ever borrowed from or lent to a friend or family member, you know that the odds of your relationship changing are pretty high, especially during the time that the loan is active. The same relationship dynamics (the rules and the feelings) apply to investment, and you are beholden to these shareholders regardless of how much blood or water is between you.

read the rest at: http://teachingstartup.com/five-funding-sources-for-startup-friends-and-family.asp


This Article Nails Natural Language Generation, What I Do With It, and Why I Do It

9.26.16


My parents still don't really know what I do.

I mean, they know I'm at Automated Insights and they know I've been there from the beginning and do my part to run the place. They know I do those fantasy football articles (well, that's not really me anymore but my fingerprints are still all over it). They know I use computers to create words out of data.

But they're not really sure how. Or why. Or why anyone would pay me to do that.

A bunch of my friends fall into the same bucket.

So I've been fighting this battle for the last six years, with sometimes limited and sometimes satisfying results. When we landed the fantasy football recaps (we do this for the two biggest providers), a light went on for a lot of people. Oh -- you take the scores from everyone's fantasy football matchup and use computers to write millions of recaps in a couple hours. Makes fantasy seem more real and more fun.

Yeah.

But that's a minor scratch on an Earth-sized surface.

Last week, I sat down for an interview with Mike Riggs from FreeThink, and we talked for close to an hour about Natural Language Generation, Automated Insights, fantasy football, the Associated Press, and a bunch of other stuff that has made up my six years in the science of automated content.

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Revenge!

There's More Than One Way To Start a Company

9.23.16


This is one of those things no one talks about until you bring it up, but then when you do, everyone knows exactly what you're talking about and totally agrees with you.

Revenge is an awesome motivator, especially in startup.

Seriously, run this by any entrepreneur you know, especially those that have sought help and/or raised money. Don't sleep on the fact that all that rejection, rudeness, and backstabbing made them work three times as hard to succeed, and when they did, it wasn't like some Hollywood movie where they felt like they'd driven themselves into becoming something they no longer respect.

It actually feels great. Not even kinda great. Just great.

I have a story I tell about how I was supposed to have a coffee meeting with a guy and he didn't show. He also didn't tell me he wasn't showing, so while I was sitting there waiting for him, I started thinking about the thing we were going to brainstorm about, and I came up with some really good ideas. That led to me sticking around at the coffee shop, typing away. Then, five minutes after the end of our allotted meeting time, a text exchange:

"Hey, I'm not gonna make it."

"Everything OK?"

"Yeah. No worries, Just lost track of time."

I stayed at that coffee shop for another three hours. By the end of it, I had the plans for a new startup that I went on to create, and that guy was out of business within a year.

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