Six Guys, Two Cameras, and a Hurricane

Why Teaching Startup: The Show Will Succeed


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


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


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.

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Five Funding Sources for Startup: Angel

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


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.

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Stay Sane and Tune Everything Out

Protect Your Empathy


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


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


"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.

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


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.


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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There's More Than One Way To Start a Company


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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I'm Full Of Good Ideas

And I Finally Realized Why That's Bad


I could have called this post One Simple Trick to Discovering Great Ideas. But reading that back sounds like sandpaper scraping across my soul, and it's also not entirely true, because the trick isn't that simple, and it isn't going to work for everyone.

I mean, it'll work for most people. I'm pretty sure it'll work for you. Just keep reading.

Here it is. I stopped writing down all my ideas. Because they were sucking the life out of me.

I actually wrote about capturing ideas last year -- I used to write down every idea I had. Well, almost every idea. I kept a running list of not-fully-formed notions, and I tried to keep that list accessible, so whenever something hit me, I could jot it down and come back to it later.

This was a very good exercise, kind of a no-brainer, if hard to stick to, and it worked well for years. But one day it just stopped working, out of the blue, and I almost didn't notice because everything around me was going so well.

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Five Funding Sources for Startup: Self

Out of Pocket, Day Job, Consulting, Co-Founders, Loans


In the last installment of the Five Funding Sources series, we talked about getting money from your customers as your first, earliest, and preferably sole source of funding for your startup.

Now let's talk reality.

I'm kidding. But we're all aware of the fact that starting a company costs money, and if you're relying solely on money from customers, you're going to be restricted in how fast you can grow, especially in the beginning.

Let's face it. Everything costs money. Incorporating your company costs money, developing a product costs money, marketing that product costs money, waking up in the morning costs money. If reason number one why people don't become entrepreneurs is that they fail to act on their ideas, reason number two is that they're unwilling or unable to spend the money necessary to execute on those ideas.

I fall victim to this more often than I'd like. I don't enjoy spending money, even other people's money. I'm frugal by nature, just ask my notoriously under-privileged kids. This frugality has been more of a plus than a minus on my entrepreneurial journey, but it's also made things more difficult, and probably kept me from acting on one or more ideas that could have returned a lot on any initial investment.

So you'll most likely need some money before you get your first customer, or if your future plans cost more to implement than your revenue stream can support. That money is going to have to come from somewhere, and the best place for it to come from is you.

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.

Self is the next best way to fund your startup after Customers, and self-funding is always going to be a requirement. An entrepreneur should always have some of their own money in their startup, and the more money they put in at the beginning, the better off they'll be at the end.

In fact, I'll go so far as to say you should never go after Friends and Family, Angel, or VC funding without having your own money invested first.

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This Might Be My Best Prank Ever


I had to get some work done on my car yesterday, and they gave me a loaner for the day, a brand new white mini-SUV, kind of bland, nothing like I'd drive. With all that's been going on lately, my three kids had no idea I was having work done on my car. Since I took my car in right after they left for school, my car was still in the driveway when they left for the day.

I also had to cover for my wife and pick the kids up from school. I opted to skip the car line and just park in the parking lot and sign them out. I park far away. I'm that guy. So as we're all walking back through the parking lot, they're already complaining, all the way until we start to approach the small cluster of cars at the back of the lot.

As we're approaching this brand new white mini-SUV (with dealer plates), I say to them, "Ooh, look, someone has a brand new car, let's look in the windows and see what it has." They're already cranky and want to leave but they give me a second and we all look in the windows.

Then I say, "Oh. Looks like they left it unlocked."

And I open the driver's side door.

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Bribery As a Negotiation Tactic

More Real-World Leadership From Parenting


I didn't think this one would have a happy ending.

After a 14-hour miserable day spent in what is probably my least favorite place on the entire planet, all stressed and worried and dealing with big life-or-death issues, I came home to hear that my daughter wanted to quit soccer.

On the scale which I had been operating for the previous 14 hours, this should have seemed like a small problem, a drop in a river of worry. But it was a big deal, and the more I got into it, the bigger a deal it got to be.

A little backstory.

See, she's graduated from touchy-feely-happy soccer to real soccer -- wind-sprint soccer, tackling-is-cool soccer, my-parents-call-soccer-football-soccer.

My daugher is small, but she's quick and she's good at every position, and she got placed on THAT team -- that team that somehow manages to dominate even though it's still all supposed to be about fun and fair play, that team with the coach that doesn't want help from the parents because they just get in the way, that team where the other kids don't speak to the new kids because no one spoke to them on their first day.

Yeah, she ran into that buzzsaw.

Anyway, she made it through the first practice and then immediately decided she wasn't going back. Period. End of story. First ultimatum she's ever given me.

Here's what it taught me.

Bribery as a negotiation tactic is OK.

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Trust Your Employees

How to Delegate and When to Let It Go


If you don't trust the people who work for you, you're going to fail. This is a pretty simple equation, but one that's commonly misunderstood by most people, especially entrepreneurs, and especially entrepreneurs whose job it is to lead people.

That's because most people confuse delegation with trust. Or rather, they don't put trust into the people they delegate out to until it's too late, setting those folks up for failure. That, ultimately, sets the entrepreneur-slash-leader up for failure, and usually leaves them questioning where the hell they went wrong. Or, worst-case, blaming their underlings for their demise.

Those are two great words -- "underlings" and "demise" -- aren't they? I mean, you rarely get to use them in the right context so I feel pretty good about shoehorning them into one sentence.

Anyway, here's how that happens and how to keep it from killing you.

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Five Funding Sources for Startup: Customers

Early Adopters, Licensing, Future, Strategic Partners, Crowd


OK, let's talk about money.

No matter the reasons you embarked on your startup journey, you're going to need fuel for the engine. Ideas, talent, and technology are crucial, but if they don't lead to cash, you'll be wasting them.

It's money. Money is the fuel.

When I talk about funding, I'm going to ignore your intentions as a founder -- in that, I mean I don't care how noble and altruistic your reasons are for doing what you do. Startup street is littered with the burned out carcasses of enterprises whose founders had the best of intentions, but couldn't or wouldn't focus on making their mission sustainable.

Don't let that be you. You need to be funded.

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.

Customers are your primary source of funds. I can't state this emphatically enough so I'll just repeat it a number of different ways.

I'm not leading off this series on funding with venture capital or angel investing or friends and family money or even self-funding. While all of those are certainly valid and important, and I'll get to all of them, the value brought by money from all of those sources is completely eclipsed by the value brought by money from customers.

In fact, you can start your company without ever raising money from any of those four other sources. You can't survive without revenue, and you should be in this mindset from the very beginning.

There. I think I beat that to death, and we can move on.

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