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Are you building something that no one wants?

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Are you building something that no one wants?

 

 

 

 

 

How is your idea different than what exists in the marketplace? We see companies all the time that pitch ideas to us. Some people spend time working on an idea that is not solving a problem, or has already solved a problem.

What is it that you know in your research that proves this company needs to exist? Here are a couple of bad answers to this question:

1.    Well we are gonna be the best

2.    We are gonna dominate the competitor

3.    Our competitor is old and outdated, they haven’t kept up with technology

One challenge that I have for people is to understand the following three key items to make sure your idea can be successful in your space.

1.    Do you understand your customer?

2.    What is the problem that you are solving for that customer?

3.    How are you different from other things that exist in the market place?

 

When Dropbox applied to Ycombinator he saw a need to share large files online.

The customer for Dropbox is anyone who needs to share large files.

The problem is it is difficult to share large files with other people who are not on your own network. You could only use physical media.

Competing products work at the wrong layer of abstraction and/or force the user to constantly think and do things. With Dropbox, you hit "Save", as you normally would, and everything just works, even with large files (thanks to binary diffs).

The problem before DropBox seems silly now because it is easy to share large files. At the time it did not exist. We would love a startup to be able to give the answer Drew Houston did for DropBox.

Understanding what problem your idea is solving is very important. Sometimes startups build something that people do not want.

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Are You an Entrepreneur or a Scientist?

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Are You an Entrepreneur or a Scientist?

I recently spoke to a group of Texas A&M entrepreneurial students at Startup Aggieland about the topic of customer discovery. My challenge to them was to become scientists, not entrepreneurs. The essence of early stage ventures is to learn and discover what works, and that requires a scientific approach. Once you know what works, then the entrepreneurial side of you can come out.

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Lean Isn't What You Think

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Lean Isn't What You Think

If you don’t think Lean is awesome…I challenge you to re-evaluate the fundamental principles of a movement that’s been very successful for a lot of people, has actually saved millions of dollars and created much better companies along the way.

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Why Investors Invest in Start-Up Companies

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Why Investors Invest in Start-Up Companies

If you don't know what an angel investor is looking for, you decrease the odds that you will be able to connect with them and get funding. Not all investors are the same, so check out a little bit of psychology behind why high net worth individuals choose to invest in pre-seed companies. 

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The Best Startup Pitch Deck for Getting Funded

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The Best Startup Pitch Deck for Getting Funded

When you’re pitching your startup idea, angel investors and venture capitalists don’t want to hear a sales presentation. A pitch is a different type of presentation than you probably have ever done before. If you are presenting wrong, you decrease the odds of getting funded. So how do you know the best way to pitch?

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Why startup funding is a crutch

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Why startup funding is a crutch

We will explain why we think getting funded has become a crutch for startup entrepreneurs, the lifestyle it can create, and how funding can actually detract from building a company that delivers value.

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8 Common Characteristics of Every Unicorn Startup

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8 Common Characteristics of Every Unicorn Startup

 

 

 

 

Finding the mythical unicorn is almost impossible.  There are literally hundreds of angel and VC funds that have been created to do just that. They play the numbers game in an effort to fund as many startups as possible so they can land on their billion dollar baby.

Unicorns absolutely fascinate me.  We have entered the age of the billion-dollar startup and very soon the first trillion-dollar corporations may be smiling down on us.  These companies are moving at the speed of light and disrupting entire industries on their way.  It kind of cracks me up, but to be honest if you are not innovating in every singe part of your organization (constantly) you are going to be swept away.  How are these companies growing so fast?  How can a company like Uber grow across the globe over 4 years and literally be so disruptive they have entire countries trying to shut them down? Snapchat… Twitter… AirBnb… Tesla… SpaceX… (add your own one sentence WOW for each of these companies… they are all amazing and redefined old business models.)

At Seed Sumo, our mission is to discover & ignite. One of our goals is to discover and ignite our first billion dollar baby and we truly believe we will find one in the next 3-5 years.  We also believe there is a method to the madness.  To start, we think it is vital to understand the DNA of the recent unicorns and exponentially growing companies so we can recognize patterns as we sort through thousands of applications each year. Does this mean we will only invest in potential billion dollar companies? No, but you can be sure that we are on the hunt and we think we have found the trail.

So far, we have noticed these common traits (with some help from some other brilliant minds mentioned below).

1.  Massive Transformative Purpose

Do you think Elon Musk thinks small?  Think again.  His purpose for Space X is the following: “Enabling people to live on other planets.”  Do you think that might be able to help you as an organization to have a purpose of that magnitude?  Attracting talent?  Getting Press?  These aren’t your normal corporate vision statements.  These are aspirational.  Google’s “MTP” is “Organize the world’s information”.  As defined by Salim Ismail who coined the phrase: A Massive Transformative Purpose (MTP) is the higher, aspirational purpose of the organization, capturing the hearts and minds of those both inside and (especially) outside of the organization.

2.  Powered by the Crowd

The smartest people in the world are now at your fingertips. Idea generation, design, distribution, sales, marketing, etc. are all being leveraged by these unicorn companies.  My favorite quote that pertains to this topic “The world has over a trillion hours a year of free time to commit to shared projects,” Clay Shirky said on a TED talk.  It allows these organizations to be smaller, but they are tapping smarter, more cost effective people, around the clock.

3.  Leverage Existing Assets

Uber taught everyone a valuable lesson here.  Cars are driving around all the time, what if they could make money while driving?  Now we are literally seeing them uproot an entire industry and flip it on its back.  AirBnb is now the largest hotel company in the world and they don’t own a single asset.  Wrapify is an up and coming startup that is leveraging cars for outdoor advertising and is growing at astronomical rates by asking themselves one question: “What if we can leverage the wide open real estate that cars provide for a more potent form of outdoor advertising?”  Now people can make money just driving around.  Probably the ultimate asset being leveraged by a company is Solar City, who is leveraging the Sun and trying to take humans completely off the grid.  They are now building the largest building in the world to supply enough panels to fulfill their goal.

That tiny Red Dot is all the surface area needed.

That tiny Red Dot is all the surface area needed.

 

4.  Algorithms & Automation

Netflix uses algorithms to decide on what shows to put in front of you when you open their platform.  Uber uses them to deliver a service called UberPool, where they calculate two to three people that need rides and determine the absolute best route to use in the most cost effective way.  Facebook uses data to determine what content to put in front of each user.  The biggest difference between unicorns and smaller companies is that the data is automated and most of the time, it’s the heart of the organization.  These algorithms and decisions are all powered by Big Data, and these companies have figured out the best way to leverage and access it.

5.  Real Time Interfaces

The Apple App store is the best example, with 2 million apps and over 100 billion downloads, 9 million developers and over 30 billion in earnings.  To manage this, they have an internal process for vetting apps, a store that is managed using algorithms that decide what apps appear for which category based on downloads, popularity, and keywords.  Google Adwords is ran entirely by user interfaces.  Without an accurate interface that allows a company to run its critical components, it becomes the number one reason why startups end up not being scalable.

6.  Flat Organizations

Have you ever heard the phrase “Too many Indians, Not enough chiefs?”  I haven’t either.  About 20% of the world’s websites are now on the Wordpress platform - making it one of the most important Internet companies in the world.  The firm behind WordPress only employs a couple hundred people, who all work remotely.  Github has a similar structure.  These organizations are self-organizing, non-hierarchical, with decentralized authority which allows them to make quicker, smarter decisions.

7.  Zero Latency

Defined as a firm that can respond to internal and external events as they occur because information is exchanged across departmental or divisional boundaries without any delay.  When completely implemented, the transparency, connectedness and reduced information latency take these companies to new heights literally automatically. This includes file sharing (Dropbox/Drive), task management (Trello), activity streams (Slack), telepresence (Hangouts, Skype), and social objects.  Some of the unicorns are also incorporating virtual worlds, and emotional sensing.

8. Constant Experimentation

It would be arrogant to think that you know everything and all that is left is to flawlessly execute on a brilliant strategy for (fill in the blank). However, this is rarely how it's done in business. AirBnB initially was a bad idea that wasn't being accepted by the market. Twitter's growth rate at one point was less than stellar.

 

growth hacking twitter

Through constant experimentation and high-tempo testing, these companies were able to discover what works. The answer to finding what works is to constantly run experiments so that you can make decisions without emotion and pursue what the market is telling you.

This is just a partial list of what we are seeing in the startup market place today. The more a company leverages these 8 techniques, the greater the odds they have of achieving billion dollar success. What’s really great about the lessons we are learning from today’s giant startups is that they principles can be applied to any business. Even if you don’t go on to create a billion dollar company, your business might still exceed your wildest expectations.

 

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10 New Years Resolutions to be a better Entrepreneur in 2016

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10 New Years Resolutions to be a better Entrepreneur in 2016

 

 

 

 

Over the past 20 years, I have started and grown dozens of startups.  I have even had the "luck" of exiting a few, if you want to spit in my face and call it luck.  Over the past 3 years, I have mentored hundreds of startups through Seed Sumo and thought I might be able to give you some guidance as you sit down this week making your plans for 2016. 


1. Be more of a scientist, and less of a visionary

Success in business isn't about casting vision for this new amazing idea for a product or service that the world has never seen. It comes down to execution of ideas that work, and that means going through a ton of ideas that don't work until you can find the ones that do. You don't have to be perfect, but you do have to adopt a scientific approach if you want to discover the answers. Be more like a scientist...create a hypothesis, test it, then iterate and learn from the results. You never know what marketing strategy or article headline or feature will be viral to your customers, so go discover what works instead of assuming that you already know. Many entrepreneurs make the mistake of trying to get it right the 1st time. Remember Thomas Edison and the light bulb. Sometimes you get it right because you spent the time to find the 10,000 ways of getting it wrong.


2. Read a Book a Month

Knowledge is power and successful leaders and CEOs are always learning new things. The average successful CEO reads 25 books per year. Get audible on your smart phone and listen to books as you workout, drive, or go through your day. Exposure to new ideas will constantly expand your mind and give you new ways of attacking the challenges of business. Here's my list of some of the best books that I recommend to people at all stages of business and life.


3. Get a clue

Ask for feedback more from people about things that you don't know. Many early stage entrepreneurs make the mistake of assuming that they have it all together and are going the right direction. While this may be true in some areas, it is likely that you need some feedback. Ask people for feedback in areas you can improve. Be specific and go to people who don't love you as much as your mom does and are likely to hurt your feeling if necessary to help you. Ask: ""What are some of my weaknesses I should be working on?"" or ""What are some areas that I need to work on to be a better leader?"" or ""What's something that I need to hear that most people are probably afraid to tell me?"". If they really love you, remember Proverbs 27: Verses 5 and 6 - ""Better is open rebuke than hidden love. Wounds from a friend can be trusted but an enemy multiplies kisses."


4. Be less defensive

I find that many entrepreneurs are difficult to work with because they are not open to feedback and are quick to dismiss ideas from others about areas we need to improve, change, or grow. Sure, you may be right that the thing needs to be red, or the button needs to go here, or that killer feature defines your brand... but what if you aren't? When you are defensive, it sends a signal to others that you can't be worked with. You shut down their willingness to give you free advice that might actually be helpful. While everyone isn't good at giving advice, you still need to drop your guard and be willing to search for the truth in what they are saying. Many investors will not invest in a founder if they find them to be defensive.  The opposite of this is being open-minded.  Elon Musk has been quoted several times on the number one reason he think he has been so successful is he actively seeks feedback from people.  He thinks it's crazy that more people don't do this.


5. Get out of the building

You can't build everything from behind the keyboard. Successful businesses are in tune with the market, and the market is made up of customers, which are people, which are not behind your keyboard. They are out there in the real world, doing stuff, not thinking about your product or company. Go find them, talk with them, see what they do, how they buy, and get connected with the subtitles and nuances of what you will need to do to be successful. Also your future employees and vendors are out there... go meet them and get out of the office. Not everything can be solved with a different twist on a social media campaign.


6. Love thy competition

See my blog article on pitching your competition. If you take time to get to know your competition, and do it with an open mind, you might find that they have cool ideas or features that you weren't going to include. You may also find that your competition is actually a potential partner for growth, but seeing them in a competitive light prevented you from seeing that potential. Instagram initially used Facebook as a launching pad instead of trying to ""rebuild the railroad."" and then later created their own network.


7. Go AFK more

For the non-nerds AFK means "Away From Keyboard".  Leading a company will inevitably mean leading people. You need to understand people in order to lead them. Getting out from behind your computer may be the biggest thing you can do to improve. Read books on leadership, get some feedback on how to motivate and connect with people better. People matter, remember the quote: "A leader with no followers is just going for a walk."


8. Dig your well before you are thirsty

John Maxwell says in "the 21 irrefutable laws of leadership" in his rule of significance that "one is too small of a number to accomplish anything great." Get out there and start building your network. Dig your well before you are thirsty. Start connecting, networking, and building up a list of trusted individuals that you can count on to help you navigate through building your business. Go to meetup events, conferences, and other activities. If you take a friend, founder or co-worker with you, that's fine, but make time to sit at another table, talk with people you don't know, and make new connections as well. This will be outside most people's comfort zone, but after all, that's where the growth happens.


9.  Break your addiction to Email

Email is one of the biggest distracting things in our lives.  I've heard it said "Email is everyone else's ToDo list."  At Seed Sumo, we make it a point that all of the partners and associates only check email twice a day.  Once after their critical task for the day is complete (usually around 10am), and again between 3-6pm.  Email kills production and those constant brain farts all day make it impossible to get anything real done.  Some of the most productive people in the world only check email once per week (a la Tim Ferris).  Tony Hsieh (Zappos Founder) known for the "Yesterbox" theory, which is the concept of only checking email from "yesterday."  For a detailed 10-step guide on this technique go here.


10. Fill in the blank

This one is for you to pick. What's that one other thing that you need to do this year take you to the next level? Take the time today to do some soul searching and find the one other thing you need to start or stop doing in 2016. Maybe it's to get in shape, go to bed earlier and get more rest, or to patch up an old relationship. Make time to improve yourself, and you will see your business improve with you.

 

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The 4 Things We Look for in Startups

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The 4 Things We Look for in Startups

 

 

 

Before applying for accelerator programs, be sure you have a solid foundation in each one of these points and that you stay in this order.

1. The Team 

 The team is important because it is the core of the whole idea and project; no idea can truly function without its crew.  If there is tension, lack of experience, lack of motivation, inability to sell well, or just general lack of skills sets, your team will fail and so will your idea. Remember that ideas CHANGE and that in order for ideas to change smoothly, the team must be COMPLETE and STABLE. Team dynamics is the solid foundation for a successful startup company. 

2. The Market   

 The market in which you’re targeting is very crucial to your overall success, thus you must choose a market that speaks to the maximum size. The dollar amount of the market is everything. When you look at markets such as the newspaper/print industry, the market for paper is in decline, becoming a micro-niche; however, news in general is still relevant, therefore people are looking towards a more modern niche such as online, where more money being generated. So, always look into the market you are interested in and ask, “How much money is being spent here,” and if it’s not a lot, try to avoid the risk. 

3. Traction 

 Traction is a HUGE consideration when looking for our next startups. Traction is the factual proof of your idea and how it is holding up in the current market. The best form of proof is revenue. When we see that your idea is bringing in some bucks, we get a sense that your product must be good and is in demand. Another thing proof shows us is that it removes any kind of risks for us. We don’t want to invest in your company if you have nothing to show for it because we don’t want to waste our time or yours. Traction also shows us that you can DO. It tells us you are determined and hard working, and that you are growing. Remember, traction doesn’t necessarily have to be monetary. If you can show us through numbers that you can increase followers, readership, etc., it shows that you can make goals happen.      

4. Idea

 The idea is an essential aspect we look for in startups, however, it is not necessarily our biggest concern. Ideas do not really matter because they are constantly changing! So when it comes to the idea, we look for the “problem” area you are trying to fix, for example dyslexia, and we want to know what you are going to do to fix the problem. So make sure your idea is the right idea. 



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The new breed of organization

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The new breed of organization

 

 

They call them Exponential Organizations or ExO's and they are a new breed of organization that are disrupting every market, geography and industry. Who calls them that?  Singularity University,  which is a new type of university funded by Google, LinkedIn, X Prize Foundation, and AutoDesk to name a few.  Their mission: Solve problems that impact at least a billion people.  That's a big task, and in order to accomplish it, they had to do some pretty heavy research on some of the fastest growing companies ever to grace the earth.  Their findings are extremely interesting.

For the last couple hundred years, traditional business structures have put an organizational/legal boundary around an asset or a workforce and ‘sold’ access to that scarcity. However, just in the last few years, a new breed of organizational structure is emerging – they are called Exponential Organizations (ExOs). These new organization structures are leveraging a newly available set of externalities like big data, community, the crowd or accelerating technologies and by doing so, are performing a minimum of 10x better than their peers in the same space.

This democratization combined with the reach and collaboration from mobile technologies are allowing these new org structures to scale at unprecedented rates. 

I first heard of the ExO concept from Salim Ismail, the director of Singularity University and former head of Yahoo’s incubator, who gave a jaw dropping speech at Growth Summit in Las Vegas where the top minds in the world meet once a year to grow. 

Salim Ismail spent the last three years interviewing and researching the ninety top entrepreneurs and visionaries including Marc Andreessen, Steve Forbes, Chris Anderson, Michael Milken, Paul Saffo, Philip Rosedale, Arianna Huffington, Tim O’Reilly and Steve Jurvetson.  He also investigated the characteristics of the 100 fastest growing and most successful startups across the world, including those that comprise the Unicorn Club (Aileen Lee’s name for the billion-dollar market cap startup group), to tease out commonalities the companies used to scale.  His findings are astounding and I have summarized them below:

What is an Exponential Organization (ExO)

An ExO is an Organization whose impact (or output) is disproportionally large—at least 10x larger—compared to its peers because of the use of new organizational techniques that leverage accelerating technologies.

The best way to understand what they are is to give you a few examples:

X Prize Foundation

X Prize creates competitions to challenge, leverage and motivate the community in order to solicit radical breakthrough ideas. The Ansari X Prize, which rewarded $10 million to the first organization to launch a reusable manned spacecraft into space (twice within two weeks).  They had Twenty-six teams from around the world participate. Virgin Galactic is currently using the winners design to enable commercial space flight, which will cost $250,000 a ticket and is planned for the beginning of 2015.

Airbnb

Founded in 2008, Airbnb currently has 1,324 employees and operates 500,000 listings in 33,000 cities. However, Airbnb owns no physical assets and is worth almost $10 billion. That’s more than the value of Hyatt Hotels, which has 45,000 employees spread across 549 properties. And while Hyatt’s growth is comparatively flat, Airbnb’s number of room-nights delivered is growing exponentially. At its current pace, Airbnb will be the biggest hotelier in the world by late 2015.

Uber 

The Airbnb for cars converts private automobiles into taxi’s.  Uber has no assets, no workforce (to speak of) and is valued at almost $40 billion, thirteen times its value of just two years ago.

TedX

Over 12,000 TEDx events have been held within the last five years.  More than thirty-six thousand TED and TEDx talks are available on the web and have been viewed almost two billion times. They did this by leveraging TED members where any TED member can create a TEDx franchise event in his or her own locale.  They went from an annual gathering of dilettantes to one of the world’s most popular and influential forums for the exchange of ideas.

GoPro

GoPro has more than seven hundred employees (it had just eight in 2010) and is valued at $3 billion. In 2013, GoPro sold almost 4 million cameras and grossed $985 million (up 87.4 percent from 2012). GoPro is currently ranked No. 39 on Fast Company’s World’s 50 Most Innovative Companies list, and the company went public in July 2014, a culmination of a remarkable run.  Their famous ‘How will you GoPro’ campaign inspired users from all over the world share footage on GoPro’s website and FB page.  Viewers see videos and are inspired to create their own.

GitHub

An open source coding and collaboration tool and platform, GitHub has literally transformed the open source environment. The core functionality of GitHub is “forking” – copying a repository from one user’s account to another. This enables programmers to take a project they don’t have “write access” to and modify it under their account. If they make changes they’d like to share, they can send a notification called a “pull request” to the original owner. That user can then, with a click of a button, merge the changes found in the new repository with the original repository.  

Quirky

Proctor & Gamble take about 300 days to go from a new product idea to a Walmart shelf. Quirky, achieves that same result in 29 days.

Google Ventures

Google Ventures has invested in more than 225 portfolio companies encompassing all stages and industry sectors, including such rising stars as Uber, Nest, and Cloudera.  In an extremely short period it has already completed more than twenty successful exits, with returns far exceeding market averages for venture capital funds.  To find potential companies, Google Ventures leverages Google’s 50,000 employees. Employees are encouraged to refer stealth startups or founders; if an investment is ultimately made, the employee gets a $10,000 finders fee. 

Principals of Exponential Organizations (or ExOs)

    ▪    ExOs are able to achieve performance improvements of 10x or more 

    ▪    ExOs leverage one M.T.P (described below)

    ▪    ExOs leverage one or more S.C.A.L.E. externalities (described below)

    ▪    ExOs leverage one or more I.D.E.A.S. internal mechanisms (described below)

Massive Transformational Purposes (MTP)

ExOs by definition, think BIG.  After reviewing mission statements of this         rare breed of ExOs they encountered statements of purpose that might         have seemed outrageous at the time of inception.

        TED: “Ideas worth spreading.”

        Google: “Organize the world’s information.”

        X Prize Foundation: “Bring about radical breakthroughs for the benefit of humanity.”

        Quirky: “Make invention accessible.”

        Singularity University: “Positively impact one billion people.”

None of these state what the organization does, but rather what it aspires to accomplish.  They aim to capture the hearts, minds, imaginations, and ambitions of those both inside and (more importantly) outside the organization.

The MTP is so inspirational that a community forms around the ExO and spontaneously begins operating on its own, ultimately creating its own community, tribe and culture. Think of those lines outside the Apple Store or the waiting lists for TED’s annual conference.  

It’s an effective attractor and retainer for customers and employees but also for the company’s entire ecosystem (suppliers, partners, developers, startups, hackers, etc.). As a result, it lowers the acquisition, transaction and retention costs of these stakeholders.

ExO

S.C.A.L.E (External Attributes)

Along with an MTP, ExOs leverage (1-2) of the five key externalities, represented by the acronym SCALE:

Staff on demand

Rather than ‘owning’ employees, ExOs leverage external resources to get work done – even for mission critical processes

Community & Crowd

Most ExOs are leveraging their community or the general public to scale. TED uses its community to run TEDx events – over 8000 have been held in just five years

Algorithms

As the world turns into data and information, ExOs are leveraging Algorithms, including Machine Learning and Deep Learning to get new insights about their customers and products

Leased Assets

Rather than trying to own assets, ExOs access or rent assets to stay nimble. Uber doesn’t own its cars, AirBnB doesn’t own hotel rooms.

Engagement

A critical mechanism to scaling their workforces, gamification and incentive prizes are extensively used by ExOs to achieve scale

I.D.E.A.S (Internal Attributes)

To manage these externalities and maintain order, ExOs use (1-2) of the following five internal mechanisms to harness the scalability of the external SCALE elements. They are represented in the acronym IDEAS:

Interfaces

When implementing the above SCALE elements, ExOs use customized processes to interface with these externalities. For example, Quirky has custom processes to manage its community of 600,000 inventors. Uber has unique ways of managing all its drivers

Dashboards

In order to track and monitor an ExO, real time metrics are implemented to track performance. Internally, many ExOs track individual and team performance using the technique Objectives & Key Results (OKRs). This discipline is used by Google, Twitter, LinkedIn and many hyper growth organizations

Experimentation

To keep constantly tuned to the external world, ExOs use the Lean methodology or other techniques to constantly experiment with new ideas and processes – they are culturally risk enabled and their processes are constantly being tweaked with fast feedback loops.

Autonomy

ExOs devolve authority to an extreme level of decentralization. In many cases, a member of the community has full ability to act on the behalf of the core organization (e.g. TEDx organizers). Decision making, even in key mission critical functions is distributed to the edges of an ExO

Social

All ExOs leverage collaborative tools, file-sharing or activity streams to manage real time, zero latency conversations across the enterprise.

Summary

When running a business, you are constantly optimizing the cost of generating Demand and the cost of managing Supply. The internet, for the first time ever, allowed businesses to drop the cost of demand generation exponentially via online marketing and referral marketing – in fact, if you achieve a viral loop, your acquisition cost goes fully to zero.

For the first time ever, ExOs are dropping the cost of supply exponentially. Uber has very low marginal cost to add a new car to its fleet. AirBnB can add a hotel room for almost zero. Google’s marginal cost to running an extra search query is almost zero. Waze has reached 50 million users solely by word of mouth and accesses each one’s GPS to provide accurate traffic prediction.  The rate of change in the world today is so high everywhere that you now must assume that someone will disrupt you, and often from a direction you least expect.  This applies to every market, geography and industry.

The question then becomes, how do you stack up with ExOs? Are you a startup that has no marginal cost of supply and can outperform larger companies by 10x?  

If so, we want you to apply to Seed Sumo.  Whether you are a team surrounded by a concept trying to find a business model, or a team that has a business model and need capital and advisors to help you rapidly scale our accelerator and seed fund is looking for ExOs.

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THE BEST FOUNDERS IN THE WORLD SHARE THESE QUALITIES

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THE BEST FOUNDERS IN THE WORLD SHARE THESE QUALITIES

 

 

 
 

We just got back from the Global Accelerator Conference in Santa Monica, CA.  It’s a meeting held once per year with the top accelerators in the world.  We share knowledge, data, stats and networks.  It was a great event to say the least.

One of the biggest topics of the event was the common qualities to look for in startup teams.  There is actually a trend that is forming and we thought we would post this, since we will be opening applications soon (January 1st).  We want everyone to know what types of teams (historically) have been the most successful of the thousands around the world.

1. DETERMINATION

This was by far the most important quality.  We assumed that it would be intelligence or creativity, but it turns out this is further down the list.  Don’t get me wrong, intelligence definitely matters, but only to a certain point.  The amount of road blocks you are going to hit, you have to be able to fall and get back up, and not lose speed during that process.  One of my favorite videos that describes the type of determination we are talking about is here.

2. FLEXIBILITY

Being flexible is always the toughest to learn for most entrepreneurs.  On one side they are hearing “Don’t give up” and on the other they are hearing “pivot”, “go a different direction”, etc.  Think of it as modifying your vision, not giving up on it.  A metaphor we hear in the industry that makes the most sense is a running back in football.  Sometimes you have to go sideways and even backwards in order to gain yards, but you can’t lose your determination in the process.  This sounds easier than it really is, especially for young entrepreneurs.

3. IMAGINATION

Albert Einstein may have put it best, “Imagination is more important than knowledge.  For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand.”  In the startup world, most good ideas seem bad or are almost funny initially.  If they were obvious, someone would already be doing them.  So maybe you need to be a little crazy.

4. HACKERS

Not just internet hackers…Life hackers.  The most successful founders are typically good people, but tend to have a naughty look in their eye.  This one caught us off guard initially, but after the explanation it made perfect sense.  They don’t necessarily break all the rules, just the one’s that matter.  They can think outside the box.  When on your team, you always seem to feel like you have some weird advantage.  Tim Ferriss became wildly successful by breaking the rules of people’s bodies, minds, and workweeks.  Have you ever beat the system to your advantage?

5. FRIENDSHIPS

Most big, successful, business have had two or three founders and they all are typically great friends.  Startups get slapped around a lot.  You must genuinely like each other, and work well together or the wedge will only get larger as the hardships stack up.  Plus, you’re around one other a lot.  Seed Sumo’s four founders have been friends since 5th grade.  We always seem to be thinking the same things and finishing each others sentences.

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THE ART + SCIENCE OF NEGOTIATING

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THE ART + SCIENCE OF NEGOTIATING

 

 

 
 

Negotiating is an art and science that can make all the difference between being profitable and having to close your doors for good. So what happens when you are locked in to the most important negotiation of your career, and your numbers could not be further apart? Heidi Roizen found herself in the same cubicle as Steve Jobs trying to negotiate to become the publisher for Jobs’ word processing software, MacAuthor-

“15%? That is ridiculous. I want 50%.”

I was stunned. There was no way I could run my business giving him 50% of my product revenues. I started to defend myself, stammering about the economics of my side of the business. He tore up the contract and handed me the pieces. “Come back at 50%, or don’t come back,” he said.

This is the part where the left side of your brain needs to take over and paint the picture your customer wants. Get creative!

Dan’l Lewin, one of the NeXT co-founders, had a cubicle within earshot of Steve (actually, at that time, every employee was within earshot of Steve.) Dan’l had been working with me in background over the last few weeks and we’d developed a good relationship. If this deal did not get done, it was going to end up being his job to find someone else, so he really wanted me to get the business. Dan’l put his arm around my shoulder, and said one sentence, which I will never forget.

“Make it look like fifty percent,” he said.  

That was all Roizen needed to hear. She then understood that her new task was to find a way to make the contract read 50% of revenues to Steve Jobs’ liking. Packaging costs, employee salaries, handling fees, and all the necessary nickels and dimes to make the contract feasible for her company, and satisfactory for Steve Jobs.

The full article, “What I Learned Negotiating with Steve Jobs” by Heidi Roizen is well worth a read at http://heidiroizen.tumblr.com/post/80368150370/what-i-learned-negotiating-with-steve-jobs

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HOW TO GET 100K NEW USERS WITH NO MARKETING BUDGET

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HOW TO GET 100K NEW USERS WITH NO MARKETING BUDGET

 

 

 

 
 

I found a post a few years back on Quora.com written by Noah Kagan. I’ve used it several times to launch mobile apps and help others launch mobile apps with no marketing budgets.

1. Create a product that you know for a fact someone would use. This might just be a simple as a product you would use or maybe you have a few users already enjoying it.

2. Manually reach out and connect with your first 1000 customers. More likely they are MORE important than the next 99,000 people you’ll get.

3. Search Reddit.com for similar /subreddit pages and post comments daily.

4. Search 10 keywords related to you on Google.com and leave comments on those related pages. Key here is to be smart about what you comment about. Don’t be a cheesy salesman and don’t always link back to your site. Only if the timing is right.

5. Give away free content or products to influencers. Read this

6. Guest Post on sites that are similar to yours. Technorati is a great resource to find which sites might be best for you. You can also ask your customers which sites they like and guest post on those. Start small.

7. Email existing users and ask them to refer you. Honestly hardly anyone does this and it works every time…if your product doesn’t suck.

8. Create your Target Marketing Sheet Devote about 3 hours of highly focused time to this task, but DEFINITELY do it. It works wonders and is a great way to keep track of your progress.

9. Leave video responses on (popular-related) YouTube Videos.

10. Search Facebook for “your niche + group” and start talking to these people. These are potential customers.

11. Raise your prices so you don’t need to get so many people.


12. Manually reach out to Twitter / Facebook followers of your competitors. Be smart here.

13. Look at new channels that have less competition (rules). Think Snapchat, Pinterest, and Instagram… to drive traffic.

14. Search LinkedIn for Groups that might be related or have users that would be interested in your product. Once accepted into the group, start Linking and Posting to that group. This is super easy and works great.

15. Evaluate doing mobile related marketing. It’s more affordable (less competition).

16. Get your site featured on some related blogs, news sites, etc. This is a bigger task and really depends on what you are needing. Read these strategies and do one of them.

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INTRODUCTIONS: THE CURRENCY OF THE ENTREPRENEUR

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INTRODUCTIONS: THE CURRENCY OF THE ENTREPRENEUR

 

 

 
 

Backstory
During my first hands-on experience in business, I was working for a bank. I was “building relationships” at the bank. The banking world had a very structured idea of how to build relationships at the time. A relationship in banking speak was loosely defined as the amount of business that a customer had with the bank. By knowing your customer more, you could grow the “relationship” through selling bank products that fit the customers borrowing and excess cash needs. The customer returned the favor by paying their loans on time and growing their deposit account balances. While I liked to think of it as developing a friendship when I golfed with customers or had a drink with them, back at the bank, the management looked for results when I filed my expense reports. Management’s thinking made sense, of course as the bank was a for profit business.

After leaving the banking business, I started several of my own businesses over the next few years and ran them using the corporate set of rules that I learned earlier in the banking business. It was the mid 2000’s. I defined a business relationship as one that was mutually beneficial for my customers, myself, and partners. But the mid 2000’s were a period of being excessive and dollar-minded throughout the economy. Something important was missing in the business world. In the mid 2000’s, American business was missing a subconscious.

American business was missing a subconscious.

Aftermath and Emergence of Trust Economy
After the collapse of the financial markets in 2008-2009, something changed. Funding and capital were scarce and people were humbled. I was one of them. I chose to start a new business in January, 2009 (I know timing, right?). Because my business focus was distressed assets, it turned out to be a good move. Despite being in the right industry (specifically housing foreclosures), the year 2009 was a year of startup anxiety for me. My business was very capital intensive. Investors were still running for the hills so my partner and I relied on friends, family, and fools, as they say, to capitalize our business. I made the decision at the end of 2009 to leave Tennessee and move to New York City to learn more about capital markets and “build relationships” while my partner stayed in Tennessee to run our business there. Our business was growing, but not to our expectations. I felt it was time to meet with new investors and that I couldn’t do that inside our local bubble.

When I arrived in New York, it was early 2010 and while the financial markets started to heal, optimism was everywhere. I quickly noticed that many entrepreneurs were also capital constrained, some of them very seasoned. Because I was surrounded by more entrepreneurs than at any point in my life and a greater variety (not just my industry), I noticed a certain segment of entrepreneurs seemed to have more success than others. What set apart these business owners? Introductions.

I learned quickly that the entrepreneur of the new normal would get to know you, and after the usual small talk would ask one simple but important question: “What are you working on?”. That question would spark a meaningful conversation that often lead to questions and comments such as: “What issues are keeping you up at night? Have you thought of….?”.

After the conversation, contact information was exchanged like any ordinary meeting. After one of these meetings, I sent the standard, thank you email to the entrepreneur I met after I researched him on LinkedIn, Twitter, and Google (It may sounds a little like cyber-stalking but if you Google someone you just met and find them all over Rip-off Report, you may want to think twice about interacting with them). But this is where the relatively normal meeting took a different turn…

Epiphany and Emergence of the Subconscious as the new Relationship Builder
I received the standard, “It was great meeting you…” response to my follow up email.But then shortly after I received another email:

This moment proved critical in changing my world view on how I defined relationships. The intent of the person making the introduction is something which I will never forget. There was no, “Hey Ryan, I’m going to introduce you to someone, and if you guys do business, I want a piece of it.” Nothing like that. That model was officially OLD SCHOOL and out. The introduction email had activated my subconscious. For 4 years now I’ve received introduction emails from the person who made that introduction. I’ve reciprocated in kind.

Result and Application Today
In my opinion the currency of introduction is more powerful than any commission arrangement, joint venture, or any other tangible demand for a connection. Certain business will probably always run on a prearranged fee for introductions (Investment Banking?), however your business doesn’t have to.

 

Consciously knowing that someone has taken time out of their life to figure out who might be of benefit to me or my business has had a powerful effect on how I approach meeting someone. In fact, knowing this creates a subconscious debt of which we should desire to repay. Unlike a financial obligation where it the value of paying the debt is clearly defined, the value of repaying an introduction has no limit to its upside.

Instead of approaching a meeting with the question: “What benefit will result for me or my business?” try these questions:

  • “What challenges does the person I’m meeting with face?”
  • “What keeps them up at night?”
  • “Who can I connect them to?”

As an entrepreneur, your time is the most precious commodity you’ll ever have. So why spend it trying to help others solve issues in their business? Frankly, I can’t think of a better use of time when you meet someone. While not everyone will understand why you actually care about the issues they are facing, others will. These are the folks will reciprocate by connecting you to the people and resources to grow your business, solve your challenges, or just build the support group that every entrepreneur needs in their journey.

Best of all, you don’t need to be a social media rock star to do this. You don’t need to have 50,000 followers, 5,000 friends, or 1,000 LinkedIn contacts. Hell, you don’t even need have a LinkedIn, Twitter, or Facebook profile. The size of your network has little relevance.

Success through Introduction Quick Steps:

  • Step 1: Think of 2 people you should meet
  • Step 2: Write a quick email and introduce yourself to them
  • Step 3: Let them take your introduction and turn it into something

Creating genuine interest in the prosperity of your business from others can make the difference between success and failure. Once you change your worldview and start connecting people to those they need to know, the social reciprocity you create will surprise you. And while the effects won’t happen overnight, they will happen.

Now take 5 minutes and connect 2 people you know that could benefit from an introduction!

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BEST SITES TO BUILD A WEBSITE QUICKLY

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BEST SITES TO BUILD A WEBSITE QUICKLY

 

 

 
 

If you are a startup and are looking to get into a quality accelerator program, you need to get a clean website up that explains your product. You would not believe some of the websites we come across that automatically remove the startup from our list.  Luckily there are extremely simple tools you can use these days that help you build something quickly and extremely cheap or free.  No programming experience required.

Edicy – Beautiful full screen websites (Free trial)

Squarespace – Beautiful full screen websites (Free trial)

Moonfruit – Web and Mobile builder (Free trial)

Pagelines – WordPress website builder ($$)

Plings – Create super-simple website pages (Free trial)

GoogleSites – simple, not fancy, web host provider (Free trial)

Weebly – Probably the quickest way to get a site up (Free trial)

Yola – Compares with Weebly (Free trial)

We aren’t saying to go spend a ton of money on your website.  In fact, try to spend no money at all initially.  You are going to change too many things in the first couple years so you want to use something that is quick and easy to make changes with.  Most of the above sites have worked well for us over the years and are all very easy to make changes to on the fly.

SIMPLIFY. SIMPLIFY. SIMPLIFY.

When we land on your website, we should be able to figure out what you are trying to do in under 20 seconds.  If this is not possible and the concept needs more explaining, then you might want to consider a short (Under 2 minute) explainer video.  Writing paragraph after paragraph explaining your product is just not efficient.

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