This is part of my ongoing series on Entrepreneurial Culture.
So what's this mythical pain point every startup needs to have that everyone's always referring to? The easy answer, (to quote Supreme Court Justice Potter Stewart), is "you know it when you see it". Perhaps, but I think this concept might best be illustrated by the following short case-study of a company I backed called Updater.
Let's begin with a few questions for you. Have you moved recently? What was that experience like? Take a few seconds to reflect on it. Are you frowning yet? I certainly am. Last year my family moved and, even though it was literally from one apartment to another *in the same building*, it was still massively disruptive and stressful- and I still haven't updated all the services, friends and companies in our lives with our correct new address. To compound this, whenever the regular mailman is away, most of our mail still goes to our old place. The previous tenant probably has thrown out more of our mail than he's handed over to the doorman. I know for certain he tossed my car registration- I have a few tickets to show for it. Painful indeed.
So let's take a very quick snapshot of the "moving" landscape:
- 40+ million people in the US move every year and have a change of address event - The average person moves ~12X in their lifetime - Moving is the third most stressful event in a person’s life, trumped only by death and divorce (according to a Employee Relocation Council survey)
I've moved many times in my life (as I am sure you have)- and everytime was a huge pain for multiple reasons. That's why when I first met the folks at Updater I already understood the profundity of the "pain in the market" deeply. I was delighted thus to learn that they could help with all of the following pain points:
- No need to wait in line at Post Office to get your mail forwarded to your new address (avg wait time in NY's POs are 2-3X that of all other POs in the US).
- Forwarding mail does not mean the senders know you actually moved! This is a massive problem. How many dozens of hours would it take to update everyone and every company in your "network"? Updater provides an easy, online way to send updates of your new address to all your accounts and subscriptions such as:
- magazines & newspapers
- banks & credit cards
- loyalty programs
- charities & public service
- professional organizations
- political organizations
- social organizations
- They also allow you to easily create a very cool interactive map of your move to notify friends and family via social-sharing and email.
- Updater gets me access to tons of exclusive deals I can save money on. The average professional household move costs $12,230 (Worldwide ERC report)
Updater is just one example of a team that identified a huge pain in the market and is now delivering huge value to their customers. If you're testing the viability of a potential business, the best way to do this is to identify the customers in the market ahead of time(!) and talk to tons of them using a rigorous customer development approach. Keep in mind that you might have multi-sided markets- in other words there might be tons of businesses who you could partner with that help you acquire customers. You need to talk to them as well and continually refine your value proposition.
My main point is this: if you're going to "go-for-it" as an entrepreneur, why not try to solve a huge, painful problem? So many folks are carelessly launching me-too businesses that are commoditized and "nice-t0-haves". Why not put in some heavy-duty customer development effort and emerge with a product that's a "must-have"?
I'm happy to report that this press release went out yesterday announcing the following partnership:
Endeavor Global and Startup Genome are pleased to announce a partnership that will help drive and deepen the cultivation of entrepreneurial ecosystems worldwide.
It’s the mission of Startup Genome to build the world’s most up-to-date database of entrepreneurial communities through a network of local curators. So far over 150 curators across the globe (including many developing nations) have begun layering real-time updates over the existing data in their respective ecosystems with profiles of founders, startups, investors, accelerators, incubators, universities, etc.
Co-founded by Dave Lerner and Shane Reiser, Startup Genome is going beyond mere hyperlinked lists and has already created the first of many data visualizations of these ecosystems to make entrepreneurial communities much more accessible and searchable for entrepreneurs and others worldwide.
Endeavor Global is now working with Startup Genome to add its own layer of curators in many cities and nations where Endeavor operates.
The last few days in NYC have been harrowing and humbling for everyone, but especially for those living in low-lying areas. Many have lost their homes, many have seen valuable possessions destroyed, and tragically for some of the unluckiest- Sandy took their lives and the lives of loved-ones. The city will be digging-out of the carnage for months- there is widespread destruction to the whole infrastructure of this town. Once again New Yorkers' sense of security and well-being has been massively jarred.
One remarkable thing I think most everyone in the city has witnessed though was the quiet heroism of the nurses, doctors, firemen, police and others that literally kept the city from descending into total chaos and even more pronounced tragedy.
One particularly moving example for us all (pictured above from the Associated Press) was the specter of nurses manually breathing for babies being evacuated down nine flights of stairs from the neo-natal intensive care center when the back-up generators at NYU's Langone Hospital failed. They literally pulled 20 of the most fragile and vulnerable human lives in this city from the abyss. And that was just one story among countless others that emerged over the last several days.
Once again, as was the case over a decade ago, it was the unheralded salt-of-the-earth folks whose grim heroics bore us up in some of the darkest hours New Yorkers have experienced. For these folks, it's just "what we do"- for the rest of us- we can only be awed and eternally grateful.
For the next post in this Mentorship Series, click here
I am a mentor for Blueprint Health and their winter program that starts on Jan 7 is accepting applications for healthcare start-ups. Blueprint Health is a healthcare-focused accelerator program based in NYC that helps early stage healthcare companies get started by providing access to a community, customers and capital. Their companies have raised over $7 million in seed capital from some of the most well-known and respected healthcare VCs and angels. Companies and floating founders can apply by visiting www.blueprinthealth.org.
Check it out!
Our Startup Genome project got some excellent coverage recently in the Silicon Prarie News. I've appended the text below. It captures what we're trying to accomplish for entrepreneurs and others in the startup ecosystem worldwide.
We've got a burgeoning group of remarkable city and state curators all around the world and we're honored to have Brad Feld of Foundry Group and Startup Revolution join us recently as curator of Colorado. Exciting stuff for sure and more to come soon with new releases.
Feel free to check out Startup Genome to learn more about our mission.
Startup Genome takes local approach categorizing, visualizing ecosystems
Dave Lerner created maps of the startup ecosystems of New York City (partially shown above, click for full) and Boston. Inspired, Shane Reiser reached out. Today, the two are working to take Startup Genome global.
Ever wished you had a directory of all the startups in your city? All the investors who were interested in technology? Or just the right person to join your team?
Of course, this isn't a new idea. Startup enthusiasts around the globe have data tucked away in spreadsheets or mapped out on whiteboards. The best-known tools for organizing that sort of information include CrunchBase and AngelList.
Reiser, who also works full time with Kohort, noticed while traveling to different cities organizing Startup Weekend events that homegrown directories weren't easy to share, weren't interconnected, usually weren't up to date and were almost never very visual or interactive.
The goal, Reiser said: "One place where entrepreneurs can find everything they're looking for in their local community."
Use of local curation is what sets Startup Genome (which is not to be confused with the unrelated Startup Compass tool, the Startup Genome Compass) apart from other databases. While anyone can add to Startup Genome, a team of local curators will monitor and edit the information for their community. For instance, the organizers of StartupIowa announced on Monday that they will curate the Iowa Startup and Entrepreneur Directory.
Reiser's belief in the need for local curation was reaffirmed as he edited Startup Genome data for Omaha. After importing data from CrunchBase, Reiser ended up deleting nearly 60 percent of it — including fake companies, dead companies, individuals who had moved on and companies and individuals who weren't really related to startups. Reiser said Startup Genome started with a list of nearly 150,000 companies nationwide, but that has since been edited down to about 80,000.
Reiser said it will be just as important to keep the wrong information out as it will to get the right information in. Initially, startups, founders, investors and resources will be featured while consultants and service providers will be stripped away. Reiser said those auxiliary services might be added back later.
While Reiser and Lerner started discussing the project months ago, Startup Genome has only been in development for eight weeks. Reiser said the site is currently a minimum viable product. The basics are there — including profiles for people and companies, the ability to search by location and filter results (left) — but a lot of functionality, including AngelList integration and a publicly-available API, is still in the works.
The Startup Genome team also hopes that adding visualizations can make the data more useful and aesthetically pleasing. The first will be a Google Maps layer. The second will be a mind map, which is a type of graph that shows the relationships between data points. For example, if you selected a company on the mind map, you might see employees on one side, investors and mentors on another, and all the companies those people are connected to beyond that. Once the API is available, users will be able to build their own visualizations, too.
Startup Genome is a bootstrapped side project for Reiser and Lerner. While the mission is global, they're keeping an eye on the local.
"We care a lot about the city-based startup community," Reiser said. "We want the city to really own their Startup Genome page, and do what they want with it."
Lerner explains Startup Genome in the video below. For more information, visit the blog.
This is part of my Series on Entrepreneurial Culture
I was in a serious meeting recently. Some heavy-duty decisions were being made. Faces were grave, people were addressing each other in quiet and measured tones. The tension was palpable.
Suddenly, a loud crunching noise broke through the charged atmosphere. At first I had no idea what it was and I turned slightly toward the direction of this noise and to my amazement noted that it was the sound of a person chewing on a piece of celery.
He was oblivious and continued to chew loudly. This was not a lunch meeting, I assure you. Others shifted uncomfortably in their seats and exchanged eye-rolls and yet he persisted until he finished eating the vegetable. The conversation, which had slowed while he chewed, continued from there.
People let it slide on the surface, but make no mistake- his behavior spoke volumes about his mindset, his character, his commitment and his attitude.
So whether it's checking your iPhone constantly while someone's talking, interrupting people while they're making a point, or chomping on a stick of celery- be cognizant of the impression this might leave on others.
Here's a running compilation of massively helpful links that I've come across over the years that correspond to each phase of launching and operating a startup.
Getting from Zero to One (What To Do Before You Launch)
Dave Lerner: My Series on Getting from Zero to One
Venture Hacks: Quick and Dirty Guide to Starting Up
Thinking About Names for Your Startup
Julian Shapiro, Founder of NameLayer, gives an excellent overview
Understanding the Meaning of a Lean Startup
The Lean Startup by Eric Ries
Finding A Technical Co-Founder
Humbled MBA: Stop Asking How to Find One: (You Have to Earn One)
Tech Crunch: Stop Looking for a Technical CoFounder
Founder Institute's One Sentence Pitch concept
Understanding Lean Incubation & Investing
Dave McClure, in his inimitable way, lays it out
Marty and his colleagues hold weekend-long workshops for anyone who wants to build their own bamboo bike with their help. At the end of the weekend, folks ride out on their own bicycles with an enormous sense of accomplishment. He's even developed bike-building kits for the more adventurous do-it-yourself types.
The movement he created is definitely spreading and he's taking this international, opening Bamboo Bike Studios in Canada and has lots of offers to open in Europe, and may even open a factory in Ecuador in the near future.
I learned that Bamboo Bikes are just one small extension of Marty's personality and anti-consumerist vision. Enjoy.
We spoke with Veer Gidwaney recently about the company his brother and he created to help motivate people to reach their personal goals. Users can actually get perks and/or cash via points they earn for making healthy choices in their lives.
Veer is an entrepreneur with an incredible sense of mission and purpose. He shared a great deal about the people who have inspired him and shaped him as a person.
It's all part of our social entrepreneurship series. Enjoy.
We sat down recently with John Walker, (aka "Johnnie Walker Black Label" as I call him), who is the finance director of Echoing Green, a seed-funding foundation that has disseminated $31 million to ambitious social entrepreneurs.
John's an expert in this space and tells us the story of Echoing Green, which was launched in 1987, named after a William Blake poem about creating a better world. In 2002, Echoing Green was recast as a global non-profit by one of its alumni fellows.
Echoing Green has funded the ideas of more than 500 fellows. “We’re looking for people who have the maximum potential to create social change,” says Walker. “It really is about that single individual person.”
If you need subtitles to understand my friend John's great Scottish brogue let me know.
We sat down recently with Mike Norman, co-founder of Boston-based WeFunder.
Wefunder’s platform seeks to offer an alternative to the traditional funding rounds a startup normally has to go through by marrying it with the popular crowdfunding techniques found on websites like Kickstarter and IndieGoGo. Wefunder splits from the aforementioned platforms in two key ways: It actually does allow businesses to use the platform, and potential funders are also offered a stake of equity in the company.
It’s innovative — and was nearly legal at the time of filming. Wefunder became active upon the subsequent passage of the recently congress-approved Jumpstart Our Business Startups (JOBS) Act, which centered on a provision that allows small and medium-sized companies acquire traditional business funding through crowdfunding methods. It could be huge win for Wefunder and the startups interested in using the platform.
Do you believe this is the startup pathway of the future? Let us know in the comments.
Note: This video was produced before the passage of the JOBS Act on March 27.
AOL Venture, the venture capital arm of AOL, is one part early-stage investment firm and one part incubator of new and unique AOL products. The focus on seed and series A rounds is unusual among corporate investors, and founding partner Mike Brown, Jr. says it is because the fund is focused on helping entrepreneurs succeed early on and building AOL’s reputation in the early stage community. Though relatively young, AOL Ventures has already assembled an impressive portfolio of investments, including participation in rounds with startups like Bit.ly, About.me, OpenX and NewsCred.
John Frankel is the head of FF Ventures, an early-stage venture capital firm that includes some of the web’s hottest startups in its portfolio, including Hashable, Klout and IndieGoGo.
Check out our interview with Frankel on Venture Studio to learn what motivates him as an investor, why he’s so attracted to early stage companies and his thoughts on where the next tech bubble will manifest.
This Venture Studio Classic was originally released on October 24, 2011.
When Jeff Clavier founded SoftTech VC there weren’t too many investors doing small, seed-stage investments in next generation web companies. Many traditional venture capitalists just didn’t find the new breed of capital efficient web startups very intriguing. A small group of investors, including Clavier, thought otherwise, and began to invest their own money as angels. They’ve been wildly successful in doing so, and today Clavier’s SoftTech VC firm has investments and holdings in some of the web’s most successful startups, including Bit.ly, Get Satisfaction, Ustream, Twitter, Groupon and Facebook.
Clavier just closed SoftTech VC’s mammoth third fund — a whopping $55 million, which is more than three times larger than the firm’s successful second fund. The new fund will allow Clavier and company to invest in 60 to 65 new companies with an initial investment averaging $400,000.
Watch our interview at Venture Studio with Clavier to find out what he looks for in new investments, why VCs do whatever it takes to help their portfolio companies succeed and why there is no pride in venture capital.
This Venture Studio Classic was originally released on May 16, 2011, after the launch of SoftTech VC Fund III, but prior to it closing.
While playing for the Tennessee Valley Vipers in the Arena Football League, and pursuing his dream of playing football professionally, Lewis Howes broke his wrist diving for a pass. He gutted out the rest of the season, playing through his injury, but underwent career-ending surgery in the offseason. For the next six months he wore a full-arm cast and went about trying to answer the lingering question, “What now?”
He didn’t have a back up plan — it was football or nothing.
Following the advice of a mentor, Howes got on LinkedIn. There he discovered a way to build a brand identity for himself around something other than his talent on the field. He became so engaged with LinkedIn that he wrote two books about using the site and today he is in demand, as a speaker, as a sports marketer and as the host of numerous webinar training sessions.
Watch our interview with Howes on Venture Studio and learn how to maximize your presence on LinkedIn, his suggestions and best practices for freelancers and why he recommends all job-seekers start their search on LinkedIn.
While Harvard Business School grads Katia Beauchamp and Hayley Barna were looking for a business idea, they noticed that the beauty product industry was seriously behind the times on the online retail side. They discovered that some of the biggest pain points for customers included the overwhelming selection of products and the inability to get a hands-on experience with the items before making a purchase. With that in mind, they created Birchbox, a company that mails women a box containing four to five deluxe beauty products every month. Their customers can test out a handful of new products from home and brands benefit from follow up purchases when the samples run out.
Their unique approach to connecting qualified customers with deluxe brands got the attention of New York’s venture capital community and landed them a seed investment of $1.4 million, followed by a series A round of $10.5 million. Having hit their third year’s sales target in just seven months, Birchbox is now scaling their business model rapidly, as well as planning a new subscription offering targeted at men.
Check out our interview on Venture Studio with Beauchamp and listen to her tips on what entrepreneurs should be thinking about before meeting a potential investor, how she and her business partner manage the personal dynamics between co-founders and a look at the logistics of rapidly scaling a company.
After graduating from the famed Wharton School at the University of Pennsylvania, Steve Ellis spent the next decade trying to make it in the music business, while tending bar on the side. According to Ellis, he was one of the lowest earning Wharton grads in the school’s history. He persevered, though, and founded Pump Audio, as a means of distributing his own music online. The site eventually became the de facto online destination for independent artists looking to license their music, and in 2007, Ellis sold Pump Audio to Getty Images for a reported $42 million.
Back as a second-time entrepreneur, Ellis’ latest venture is creating a marketplace for celebrity content where none previously existed. At WhoSay, Ellis is building a platform that simplifies the direct-to-fan relationship, creating greater engagement for the celebrities and influencers who use it.
You can watch the video on Venture Studio.
Based on lean startup methodology, Lean Startup Machine is a weekend-long startup competition, as well as a workshop for educating entrepreneurs on lean startup best practices. Founded by NYU business school drop out Trevor Owens, Lean Startup Machine plays host to a list of tech royalty, who come in to advise participants and teach teams how to understand their customers, quickly build, validate or invalidate their initial assumptions and then persevere or pivot, based on that feedback.
Check out our interview to learn how Lean Startup Machine has helped participants figure out if their ideas are valid and pivot if they’re not. Owens elaborates on why he feels that sometimes the best way to give entrepreneurs a dose of reality is to kick them out of the building and what he looks for when reviewing applications for his program (hint: demonstrate that you’re truly dedicated to being an entrepreneur).
You can watch the video on Venture Studio.