Join the global conversation
31 High-Impact Entrepreneurs from 15 Countries Join the Endeavor Network at the 54th Selection Panel in New York City
New York, NY – August 14th – Endeavor selected 31 high-impact entrepreneurs leading 21 companies in 15 countries at its 54th International Selection Panel. Endeavor now supports 948 High-Impact Entrepreneurs from 606 companies across 20 […]
August 14th, 2014 — by adminRead more
In the news
Endeavor Entrepreneur companies KidoZen, founded by Jesus Rodriguez, and My Ceviche, founded by Roger Duarte and Sam Gorenstein, were recently featured in The Miami Herald’s Business Monday section, highlighting the growing presence of both companies […]
February 25th, 2014 — by adminRead more
Latest Video(video) Endeavor CEO Linda Rottenberg Featured On Fox Business’ After The Bell
July 15th, 2014
By David Beisel, a cofounder and Partner at NextView Ventures
Personal networking is a key business skill. And as a VC, I get plenty of practice doing it. As one of my former high school coaches used to put it, “Practice doesn’t make perfect. Practice makes better.” While I guess you could develop a “strategy” to networking successfully (… with many a book written about the subject), I think becoming especially productive at networking is largely tactical. Along the way, I’ve stumbled across two tactics which I think are valuable.
First is leveraging the pretty obvious concept of giving-to-get, but being specific about it. In any two-way relationship which builds based on the trust that the exchange between the parties will be equal over time, someone needs to give first. With any potentially valuable relationship, it’s just best to do something for the other person first and not worry about reciprocity initially.
As a tactical matter, I try to end each networking conversation with “How can I specifically help you?” Rather than just getting to know someone with the hope that you may be helpful in some way in the future, directly asking the other person how clarifies and sets expectations immediately so that a meaningful relationship can develop sooner rather than later.
The second tactic is just the reciprocal of above. When networking to ask for help, I’ve found that after a rapport is established, it’s best to be as specific as possible about what you’re looking for. Even though it narrows the scope of possibilities, an extra level of specificity jogs the thinking for things that are current, as well as plants the seed for recognition recall in the future.
For the job seeker, instead of saying “I’m looking for new job opportunities,” rather communicate “I am looking for a VP Product role at a consumer-mobile startup.”
In seeking new customers, instead of saying “I’m looking for people to buy my product which does XYZ,” rather communicate “My product which does XYZ most resonates most with individuals in ABC roles at companies with DEF profiles that face GHI problems.”
For VCs (including myself), instead of saying “I’m looking for innovative early-stage startup investment opportunities,” rather these days I am saying “I’m proactively seeking seed-stage investments in both ad tech and those which leverage the trend towards ubiquitous computing through device proliferation.”
By Jason Cohen, founder of WP Engine & Smart Bear Software.
The results of a serendipitous live experiment were recently published as guest posts on this blog. Sacha demonstrated the benefits of selling many copies of an eBook at a low price, while Jarrod pointed out the advantages of higher prices, bringing in more revenue with 1/6th the number of units sold.
The ensuing discussion swirled around the merits of selling more units (i.e. maximizing reach) versus selling more expensive units (i.e. maximizing per-unit profitability). This is a choice that every startup founder must make, so I’d like to dig in deeper.
Here is the second post in my series about planning, pitching, and launching a new business venture. In partnership with Microsoft and Office Web Apps, I’ve created a Word document that outlines a good business plan. It’s saved to my SkyDrive folder here. Feel free to download it and use it as inspiration. And if you’re working with a partner, you can use the free Word Web App to stay in sync.
I provided the PowerPoint document before the Word document because a good business plan is an elaboration of a good pitch as opposed to a good pitch being a distillation of good business plan. You should give your pitch a few times to see what works. Change the pitch to make it better and then write your plan.
Think of your pitch as an outline, and a business plan as the full text. (How many people write the full text and then write the outline?) The more you pitch, the better your outline and the better your outline, the better the plan. After you perfect your pitch, then start writing the business plan. At a high level, here are some tips for writing an enchanting business plan:
1. Write for all the right reasons. Most people write business plans to attract investors, but most venture capitalists have made a “gut level” go/no go decision during the PowerPoint pitch. Receiving (and possibly reading) the business plan is mostly a mechanical step in due diligence. The more important reason to write a business plan, whether you are raising money or not, is to force the management team to solidify its objectives (what), strategies (how), and tactics (when, where, who). Even if you have all the capital in the world, you should still write a business plan. Indeed, this may be especially true because too much money usually causes sloppy and lazy thinking.
2. Make it a solo effort. While creation of the business plan should be a group effort involving all the principal players in the company, the actual writing of the business plan–literally sitting down at a computer and pounding out the document–should be a solo effort. Ideally the CEO should do it because she will be pitching, defending, and implementing it.
3. Put in the right stuff. Here’s what a business plan should address: Executive Summary (Overview), Problem/Opportunity, Unfair Advantages, Sales and Marketing, Competition, Business Model, Forecast, Team, and Status and Milestones. In other words, this is the same list of topics as a PowerPoint pitch. If you were extremely articulate, you could theoretically transcribe your pitch, and you’d have your business plan.
4. Focus on the executive summary. True or false: The most important part of a business plan is the section about the team? The answer is False. The executive summary, all one page of it, is the most important part of a business plan. If it isn’t fantastic, eyeball-sucking, and pulse-altering, people won’t read beyond it. You should spend eighty percent of your effort on writing a great executive summary and twenty percent on the rest of the plan.
5. Keep it clean. The ideal length of a business plan is twenty pages or less, and this includes the appendix. Many people believe that the purpose of a business plan, like a PowerPoint pitch, is to create such shock and awe that investors are begging for wiring instructions. They are wrong. The purpose of a business plan is continued due diligence with activities such as checking personal and customer references. The tighter the thinking, the shorter the plan; the shorter the plan, the faster it will get read.
6. Write deliberate, act emergent. I borrowed this from my buddy Clayton Christensen. When you write your plan, act as if you know exactly what you’re going to do—in other words, act deliberate. You’re probably wrong but take your best shot. However, writing deliberate doesn’t mean adhering to the plan in the face of new information and new opportunities. As you execute the plan, you act emergent—that is, you are flexible and fast moving and change things as you learn more about the market. The plan should not take on a life of its own.
Again, here is my template for an enchanting business plan. You’ll see that the template is very similar to the tips in the PowerPoint document because, again, your business plan should be a derivative of your PowerPoint pitch. I appended tips for each section in the Word document, so that you can write an enchanting one.
An extremely useful concept that has grown popular among startup founders is what eminent entrepreneur and investor Marc Andreessen calls “product/market fit”, which he defines as “being in a good market with a product that can satisfy that market”. Andreessen argues persuasively that product/market fit is “the only thing that matters for a new startup” and that ”the life of any startup can be divided into two parts: before product/market fit and after product/market fit.”
But it takes time to reach product/market fit. Founders have to choose a market long before they have any idea whether they will reach product/market fit. In my opinion, the best predictor of whether a startup will achieve product/market fit is whether there is what David Lee calls “founder/market fit”. Founder/market fit means the founders have a deep understanding of the market they are entering, and are people who “personify their product, business and ultimately their company.”
A few points about founder/market fit:
Founder/market fit can be developed through experience: No one is born with knowledge of the education market, online advertising, or clean energy technologies. You can learn about these markets by building test projects, working at relevant companies, or simply doing extensive research. I have a friend who decided to work in the magazine industry. He discovered some massive inefficiencies and built a very successful technology company that addressed them. My Founder Collective partners Eric Paley and Micah Rosenbloom spent many months/years becoming experts in the dental industry in order to create a breakthrough dental technology company.
Founder/market fit is frequently overestimated: One way to have a deep understanding of your market is to develop product ideas that solve problems you personally have. This is why Paul Graham says that “the best way to come up with startup ideas is to ask yourself the question: what do you wish someone would make for you?” This is generally an excellent heuristic, but can also lead you astray. It is easy to think that because you like food you can create a better restaurant. It is an entirely different matter to rent and build a space, market your restaurant, manage inventory, inspire your staff, and do all the other difficult things it takes to create a successful restaurant. Similarly, just because you can imagine a website you’d like to use, doesn’t mean you have founder/market fit with the consumer internet market.
Founders need to be brutally honest with themselves. Good entrepreneurs are willing to make long lists of things at which they are have no ability. I have never built a sales team. I don’t manage people well. I have no particular knowledge of what college students today want to do on the internet. I could go on and on about my deficiencies. But hopefully being aware of these things helps me focus on areas where I can make a real contribution and also allows me to recruit people that complement those deficiencies.
Most importantly, founders should realize that a startup is an endeavor that generally lasts many years. You should fit your market not only because you understand it, but because you love it — and will continue to love it as your product and market change over time.
Thoughts from Fred Wilson: Entrepreneurs have control when things work, VCs have control when they don’t (with audio)
I did an interview yesterday in Buffalo, NY where I was the past couple days for the launch of the Z80 incubator. Grove Potter, the Business Editor for the Buffalo News, interviewed me for something like an hour. It was a fun talk.
At one point he asked me about the issue of entrepreneurs giving up control of their companies to VCs. It’s an interesting issue and one that I think is not well understood.
In theory, control of a company rests with the ownership split between the founder and the investors and how the Board of the Company is set up. If the founder/entrepreneur owns more than 50% of the company and controls more than half of the board seats, then he or she has “control” of the Company.
But in reality I have found things are very different than that. And it all comes down to two things:
1) How well the Company is performing
2) Whether the Company needs more investment capital and where it is coming from
I like to think about it this way.
An entrepreneur or hired CEO can own as little as 5-10% of a Company but they can control it like a dictator if they are doing a great job running the business and the company is making a lot of cash flow and has no need for additional capital.
An entrepreneur can control 95% of a company and all the seats on the board but they can easily lose control of the business if they company is floundering and they need more money and the only investors who would consider putting up money are the existing investors.
This extends to the idea of who sells companies. My friend Dave Winer put up an interesting discussion thread a few days ago talking about the sustainability of social media platforms. It is an interesting discussion and one very much worth having. In the post that kicks off the thread, Dave suggests that VCs are behind the decisions to sell/exit companies.
I left a comment on that thread and at the end of my comment I made this point:
I would be remiss if i did not take a minute to point out that you are missing the person who is the most important part of this discussion and that is the founder. In big successful companies, the founder, founders, and the teams they hire to help them run their businesses, are really the ones in control. The VCs are often “along for the ride”.
VCs have control when things don’t work. Entrepreneurs have control when they do.
That last line sums up my point of view on control and that is why I used it to headline this post. If you want to maintain control of your company, focus on running it well or find a team to run it well, and make sure you have plenty of cash to operate your business and that you never find yourself in a position where you are running out of cash and have nowhere to go but your exisiting investors. Do those two things well and you will be in control for as long as you want to be in control.
Reprinted from AVC. Original article here.
By Fred Wilson, a VC and principal of Union Square Ventures, and Scott Kurnit.
When I announced the MBA Mondays series on People and mentioned I would end with a number of guest posts, I got an email from my friend Scott Kurnit, founder of About.com and Keep Holdings. Scott said, “Culture that is something I have thought a ton about. I’d love to contribute a guest post.”
So what follows are Scott’s thoughts and experiences on building culture in an organization.
By Mark MacLeod, a Partner at Real Ventures (Canada’s largest seed VC fund) and an advisor to some of Canada’s leading startups.
VentureBeat wrote a post recently on debt versus equity which one is right for your business.
This is an important topic for any business. However, I found the VentureBeat article to be too simplistic. The advice given was often conflicting and was specific to their individual situation and context
So what I would like to do here is layout a more comprehensive framework for the pros and cons of debt versus equity and when you could look at each for financing your business.
By Avi Flombaum. Avi is the Dean of The Flatiron School, an intensive program to learn Ruby on Rails in New York. He was formerly the co-founder and CTO at Designer Pages. You can follow him at @aviflombaum or @flatironschool.
Hiring technical talent is often cited as one of the most difficult parts of scaling a startup. Great companies are built by great teams so naturally, when it comes to technical talent, companies are competing harder than ever to entice the best of the best. The rationale you’ll typically hear is along the lines of “a great developer is 10x as productive as a mediocre one.” That might be true, but it is an impractical startup hiring strategy.
While companies fight tooth and nail over engineers with MIT or Stanford degrees with years of experience, as CTO of designer pages, my best hires were consistently entry-level developers that I developed on the job. Some companies, like Zendesk and GeneralThings have already realized this and are working with schools like Dev Bootcamp in San Francisco, The Flatiron School in New York (of which I’m a co-founder) and Code Academy in Chicago to hire their newly minted web development graduates. Aside from the fact that they’re significantly easier to attract, there are tremendous benefits to the company.
1. Cost- Starting salaries for senior developers have skyrocketed in the past few years. The average starting salary for a senior Ruby developer has climbed to $94,000 ($107,000 in Silicon Valley). Compare that with the average salary for a junior Ruby developer, $70,000, ($80,000 in Silicone Valley). At that rate, you can give a junior developer a 10% raise every year for 3 years at the end of which you’d have an experienced senior employee who’s been with you that long and is still costing less than a new senior hire.
2. Attitude- Anyone that gets courted the way a senior engineer does today is at risk of developing a sense of entitlement (to put it lightly). When I hired ‘rockstars’ at Designer Pages, the requests became increasingly ludicrous. Senior engineers had four-day weeks, required conference budgets, and refused to adhere to the language and technology standards the company had established. They always knew best and felt that we were lucky to have them. Junior devs on the other hand, are hungry. They want to prove themselves and are eager to learn. And assuming you’re fostering the right culture, are excited to be part of your team.
3. Turnover- High turnover is the easiest way to kill a product. In The Mythical Man-Month, Frederick Brooks discusses problems inherent in a system designed by a succession of leaders, each with his own style and ideas: “I will contend that conceptual integrity is the most important consideration in system design. It is better to have a system omit certain anomalous features and improvements, but to reflect one set of design ideas, than to have one that contains many good but independent and uncoordinated ideas.”
Great companies need great engineers who want to solve complex problems. But the majority of work being done on a typical web application does not require a team full of PhD’s with 10 years experience, making it no surprise that senior engineers quickly get bored and seek out other opportunities. By hiring junior developers and ensuring they’re getting the continual training and development that they need, you can ensure that they stay engaged and derive as much personal and professional value out of your company as your company derives from them.
4. Culture- A prerequisite for being a great programmer is a love of learning. Unfortunately, many senior engineers come with a lot of baggage; they want to work on specific problems, in specific languages, and have little patience for the inexperienced n00b. By hiring junior engineers, and giving them the training and development they need to flourish, not only can you align everyone’s technical styles under a cohesive vision, you can more easily create a culture wherein it is expected for the senior employees to mentor and coach new hires, just as they were coached when they first started.
To be clear, this isn’t true in every case. I happen to know plenty of incredibly humble, loyal, and generous (though not cheap), senior engineers. And if you’re trying to build a better search engine, or solve the world’s most complex data problems, you probably do need to recruit from the top 1%. Most companies though just need great leaders who can help their teams think through the difficult questions, and team members who are wiling to work together to implement creative solutions. The bottom line is that for most products, seeking out rockstar senior engineers is like hiring Picasso to paint your apartment.
So what’s the best way to put this plan into action? Here are some things I found to be effective when developing junior engineers at Designer Pages:
1 – Deploy on Day One- Making engineers deploy code on their first day is the single best way to get them feeling great about their ability to acclimate and impact change in your organization. Companies like Etsy actually have a hard-and-fast rule that all engineers should deploy to production on day one.
2 – Assign Mentors- Lots of companies say they mentor their employees. I’ve found that unless this is systematized, senior employees get too busy to dedicate the necessary amount of time. Make sure every new hire has a mentor to pair with basically all-day for at least the first two weeks.
3 – Foster Productivity Early- The best way to sharpen a programmers skills is to write code. Junior engineers shouldn’t be trying to learn legacy systems when they first arrive- let them work in as fresh a codebase as possible so they can get cranking right away.
4 – Invest in Training- Nothing will give you a better ROI on your time than making sure your employees are well trained. Create a learning plan for each hire for the first 3-6 months, complete with recommended reading, that applies to the projects they are working on.
5 – Be patient.
At the end of the day, when you hire junior developers, you are investing in people. You are creating a culture of growth, promotion, and learning that will pay for itself multiple times over. And it will also help you recruit the Ninja-Rockstars when you actually need them.
Here are some things I’ve learned over the years about recruiting programmers* to startups. This is a big topic: many of the points I make briefly here could warrant their own blog posts, and I’m sure I’ve omitted a lot.
- The most important thing to understand is what motivates programmers. This is where having been a programmer yourself can be very helpful. In my experience programmers care about 1) working on interesting technical problems, 2) working with other talented people, 3) working in a friendly, creative environment, 4) working on software that ends up getting used by lots of people. Like everyone, compensation matters, but for programmers it is often a “threshold variable”. They want enough to not have to spend time worrying about money, but once an offer passes their minimum compensation threshold they’ll decide based on other factors.
- Software development is a creative activity and needs to be treated as such. Sometimes a programmer can have an idea on, say, the subway that can save weeks of work or add some great new functionality. Business people who don’t understand this make the mistake of emphasizing mechanistic metrics like the number of hours in the office and the number of bugs fixed per week. This is demoralizing and counterproductive. Of course if you are running a company you need to have deadlines, but you can do so while also being very flexible about how people reach them.
It is sometimes helpful to think of recruiting as 3 phases: finding candidates, screening candidates, and convincing candidates to join you.
- Finding means making contact with good candidates. There are no shortcuts here. You need to show up to schools, hackathons, meetups – wherever great programmers hang out. If your existing employees love their jobs they will refer friends. Try to generate inbound contacts by creating buzz around your company. If you have trouble doing that (it’s hard), try simple things like blogging about topics that are interesting to programmers.
- Screening. Great programmers love to program and will have created lots of software that wasn’t for their jobs or school homework. Have candidates meet and (bidirectionally) interview everyone they’ll potentially be working with. If the candidate has enough free time try to do a trial project. There are also more procedural things that can be useful like code tests (although they need to be done in a respectful way and they are more about getting to know how each side thinks than actually testing whether the candidate knows how to program (hopefully you know that by this stage)).
- Convincing them to join you. This is the hardest part. Great programmers have tons of options, including cofounding their own company. The top thing you need to do is convince them what you hopefully already believe (and have been pitching investors, press etc): that your company is doing something important and impactful. The next thing you need to do is convince them that your company is one that values and takes care of employees. The best way to do this is to have a track record of treating people well and offer those past employees as references.
A few things not to do: you will never beat, say, Google on perks or job security so don’t even bother to pitch those. You’ll never beat Wall Street banks or rich big companies on cash salary so don’t pitch that either. You’ll never beat cofounding a company on the equity grant, but you can make a good case that, with the right equity grant, the risk/reward trade off of less equity with you is worth it.
Finally, I’ve long believed that early-stage, funded startups systematically under-grant equity to employees. Programmers shouldn’t have to choose between owning a fraction of a percent of an early-stage funded company and owning 50% of an unfunded company they’ve cofounded. Naval Ravikant recently wrote a great post about this:
Post-traction companies can use the old numbers – you can’t. Your first two engineers? They’re just late founders. Treat them as such. Expect as much.
Making those first engineers “late cofounders” will dramatically increase your chances of recruiting great people. This is a necessary (but not sufficient) condition for getting the recruiting flywheel spinning where great people beget more great people.
* As someone who personally programmed for 20 years including about 10 years professionally, I preferred to call myself a “programmer.” Some people prefer other words like “hacker” “developer”, “engineer” etc. I think the difference is just uninteresting nomenclature but others seem to disagree.
- February 4th, 2014
- November 13th, 2013
- January 24th, 2013
- January 16th, 2013
- View All
In the news
- August 1st, 2014
- July 29th, 2014
- July 24th, 2014
- July 21st, 2014
- View All
- (video) Endeavor CEO Linda Rottenberg Featured On Fox Business’ After The Bell
- (video) Endeavor CEO Linda Rottenberg Discusses Her Entrepreneurial Journey in Business Insider
- (video) Endeavor Greece Reports on Youth Job Creation, Focuses on the Need for High-Impact Entrepreneurship
- (video) Linda Rottenberg Discusses Lessons in Entrepreneurship for Stanford’s eCorner Series
- View All