Endeavor Greece released an infographic and video to highlight the office’s impact during its two year anniversary. The team supports some of the region’s top high-impact entrepreneurs who continue to drive sustainable job creation and contribute to […]
Endeavor announced that it will expand its presence in Latin America with the launch of Endeavor Peru, the organization’s seventh country affiliate in the region. The launch is supported by some of the country’s most influential […]
There is a dark cloud over the internet sector due to the weak performance of the Facebook IPO. It’s not horribly dramatic by any means – Facebook is clearly an important company (even if it’s not worth $90B+). But a lot of entrepreneurs and investors were hoping for a really strong showing to drive more liquidity in the market and continue the surge in hype around internet companies (both start-ups and later stage companies).
The interesting thing is that while many entrepreneurs, tech executives, and investors are short-term nervous about the fate of internet-enabled startups, most are incredibly long-term bullish. Personally, I’m more bullish about the prospects of internet-enabled innovation than I have been my entire career.
The reason is that I’m convinced that we are on the ground floor of a new innovation wave that is going to be at least as disruptive as the first wave of the internet. It feels like we are in the early/mid 1990’s again, or, more appropriately, like we are on the cusp on the second industrial revolution where we saw massive developments centered around the foundational innovations of steel, the internal combustion engine, and electricity. Arguably, the second industrial revolution was more impactful to humanity than the first, and I feel the same about what is ahead compared to the first internet innovation wave.
I’m not enough of a tech pundit to create a cohesive theory about the current state of things like Roger McNamee and Mike Maples, nor am I going to rehash the excellent collection of data that Mary Meekerhas graciously assembled (both required reading IMHO), but here are four foundational pieces of infrastructure that is getting me most excited about where the tech industry is today and where it is headed.
Reprinted from The Entrepreneurial Mind. Original article here.
By Dr. Jeff Cornwall, the Jack C. Massey Chair in Entrepreneurship at Belmont University.
“You are gnats! You are like annoying little gnats flying around in the face of consumers.”
This is a message that I consistently tell aspiring first-time entrepreneurs.
Why the harsh words? Most first-time entrepreneurs have so much enthusiasm that they can become blinded to the reality of the challenges that every new business faces.
I tell them to think about the last few hours. How many small businesses did you go past without even really noticing them? What about all of the products in the convenience store where you got gas this morning?
How many of the service businesses that had logos and advertisements on the sides of their trucks did you actually pay attention to?
Many of those products on the shelves are the result of someone’s entrepreneurial dreams. A small-business owner spent hours agonizing over the business name and a logo, and yet most passersby barely notice it.
New business owners need to adjust their expectations. While starting a new venture is one of the most important and exciting things you’ve ever done, to the market your product is just one more in an already overcrowded sea.
So, new business owners need to get a sense of urgency. They need to develop a plan to become more than just another annoying little gnat!
To successfully launch a new business the entrepreneur needs a clear entry strategy, which is a plan for how the business is going to gain the attention of the market and start attracting customers.
If your business is going to take existing market share away from established businesses, you are going to have to do something better, faster or cheaper than the competition. Give people a compelling reason to change their buying habits.
Start small: Consider a niche strategy. This simply means the entrepreneur finds a small part of a market that’s not being served or that has been significantly under-served. It gives the entrepreneur a safer market to conquer a bit hidden away from established businesses.
But establishing a niche requires that you find ways to let the customers in that niche market know that your new business is now open and is ready to fill their specific unmet need.
Getting the market’s attention for a completely new product that has the potential to impress the mass market is the most difficult and expensive market entry. It requires extensive investment in advertising and other forms of promotion to build awareness for your new product and to educate the public about the benefits it offers.
No matter which type of entry strategy you pursue — and as excited as you may be about your new business — remember this: If you build it they may, or they may not, come.
You will need to work hard to find the most effective means to attract those initial customers.
What’s your startup funding strategy? Bootstrapped? True Angel? Super Angel? Venture Capital? There are a lot things to consider before deciding what funding strategy is right for you and your startup. (more…)
The following interview was conducted with Omar Koudsi, who, along with Laith Zraikat, founded Jeeran and was selected as an Endeavor Entrepreneur in 2010. The key to answering the interview’s title involves, as the original post states, “A dash of subterfuge, a sprinkling of Koranic insight, and plenty of pavement-pounding.”
By David Zax
Omar Koudsi is the CEO of the freshly-funded Jeeran, sometimes called the “Yelp of the Arab world.” Koudsi says his ambitions are more grand, with an eye on all emerging markets: “We want to be a company not for the Arab world, but from the Arab world.” Jeeran is live in five countries now, and with a focus on Jordan and Saudi Arabia. We caught up with Koudsi to learn about the unique challenges of bringing a culture of a reviewing to parts of the world where digital penetration is low, and concern with face-saving high.
FAST COMPANY: What’s Jeeran?
OMAR KOUDSI: Jeeran is a local platform centered around places and reviews.
You’ve been called the Yelp of the Arab world.
I think that’s kind of an oversimplification. The problems we’re solving in our part of the world are much bigger than our counterparts in developed markets. The lack of data is a big issue we tackle, as well as the lack of a review culture where people feel the need to talk about their experiences.
Lack of data?
In our part of the world, a lot of places don’t have websites. There’s a statistic from Google–that 80% of small and medium businesses don’t have a web presence in the emerging or developing world.
But if I wanted the best falafel in Amman, I’d go to Jeeran, or not?
Yes, you’d go to Jeeran for that. But the kind of problems we’re solving go beyond that. The first problem we’re solving is compiling a data layer through various sources, and that’s pretty tough to do.
How do you do it?
Various sources–publicly available data, government agencies, data you can buy. It’s scraps here and there. More importantly, we have to go on the street and write down data. We can’t get the majority of it, but we have to get a significant nucleus which we can launch and then incentivize people to add data themselves.
You’ve gone out knocking on doors?
Yes. You get various weird things. Some people think we’re from the tax authority. There’s cultural challenges everywhere. In Saudi Arabia, there’s a suspicion of people walking down the street and taking pictures. We had someone there get stopped several times, whether by shop owners or by the police. He had to figure out a creative way of being able to take pictures, so he got his kid, and started taking pictures of his kid at every place. He basically put his kid in front of places and took the picture.
What other challenges have there been?
In the emerging world, customer service is not very centric. We have a lot of initial negative reactions, where people want to sue us. One time, we put the wrong phone number for a cake shop, it was the phone number for a competitor. He wasn’t too happy about that. But we converted him to a happy business customer with a Jeeran sticker on his window. [Pictured up top.] We educated him and told him he can claim his page and edit the info himself.
So for many of these businesses, you’re their only web presence?
Yes. Sometimes people send CVs to us, wanting to apply to these places. They think we are their site. At our business contact email, we get a lot of people thinking that we are actually the business itself.
Since you’re tackling more than Yelp did in the U.S., you could be way ahead of the curve in your markets.
I think so, and it’s a lot harder. It goes both ways. It’s hard, so nobody’s doing it. But nobody’s doing it because it’s very hard. We do have an advantage because we’re solving a big problem. We consider ourselves as much an offline as an online business. A lot of our energy is literally on the streets. If you take the average street person–not the elite that use Foursquare–their first reaction is, “Why the hell would I put time into writing a review?”
In many parts of the world, there’s also a concern over saving face.
In our early days in Jordan, we brought a bunch of users–good users who we thought had really figured out how to use the site–to a café. Everything in this café was a negative experience, but when everybody went home, they put up positive reviews. Later our community manager asked them, “How come you wrote good reviews? The waiter was slow, the food wasn’t good–you all agreed it wasn’t good.” The response from the majority of them was: We couldn’t write a negative review when you had invited us to this place.
They were worried about offending you, Jeeran?
Their main priority was not about writing an objective review.
So how do you foster a review culture in traditional societies?
Meetups, education, reaching out. We try to focus on universal themes. There are religious sayings.
Where in the Koran does it say, “Thou shalt Yelp”?
There’s one saying from the prophet Muhammad: “Removing harm from other people’s way is pious work.” We do talk about this, depending on the context. You have to say things people connect to and understand. Writing a review is removing harm from other people’s way, right? Another thing we talk about is the concept of hearing the individual voice. I would say in our part of the world, there’s a kind of self-defeatism: The notion that one person cannot make a difference is prevalent. I think the Arab Spring did show that you can control your destiny, you can make a difference. So we tie that to our small angle: Your own review can make a difference. When combined, small voices do have an impact.
When you work inside a startup with lots of clever and motivated staff you’re never short of good ideas that you can implement.
It’s tempting to take on new projects, new features, new geographies, new speaking opportunities, whatever. Each one incrementally sounds like a good idea, yet collectively they end up punishing undisciplined teams. I like to counsel that the best teams are often defined by what they choose not to do.
Let me explain.
As a VC I regularly meet with companies and listen to their plans. It’s a very common occurrence that a young startup with sub 20 staff and sub $2m in financing is racing around doing too many things. This level of complexity always worries me. A significant number of the companies I meet with get some form of feedback from me that:
“I’m a bit worried that you’re doing too many THINGS. You run the risk of being a mile wide and an inch deep. It’s hard enough to do X really well and succeed. I’m not sure how you do all these other things and yet I think they may end up being a distraction to X.”
I already know your response. Trust me. I hear it every week
“Yeah, but I’m just going to execute this [channel sales deal, international license of my product, new industry, new operating system, biz dev deal] and then it will pretty much run itself.”
It never does. That channel deal that you thought would take no times ends up burning scarce calories. The 3rd-party tries to sell your software – they just need your help with tech assistance to close the deal. They just need you to update your marketing materials. They got your last version working but since your latest release they couldn’t get it to work. That test you did on launching a RIM version of your product – it was only beta – now has 20 users who need a patch because it’s not working properly.
Every extra set of features that you added that served one narrow use case end up being features you need to support in future releases adding complexity to future development, usability testing, regression testing, etc.
Every team I fund comes across as laser focused on their core mission.
I always tell teams I meet with, “The scarcest resource in your company is management bandwidth. Spend it wisely.”
Every company is built by a team and every team member matters. But as you know, a few key people in any business have disproportionate impact on the company’s ultimate success. And nobody is more important in this regard than senior management. These people need need to be hyper focused on those things that matter the most to the company’s success. It’s why I don’t invest in Conference Ho’s.
Examples from discussions I’ve had this month that might resonate with your internal debates about how to prioritize
• We are giving a version of our product to a team in Europe who will start selling our product internationally
• We are signing up a channel partner to sell our product since we haven’t scaled our internal telesales team yet [yes, we know that they don’t have experience selling IT, but they have customer relationships]
• We’re going to put a guy on the ground in the UK to address early leads we’re getting from ad agencies there [true, we haven’t thought about employment laws, taxation, currency management, etc.]
• I know our product seems complex but we felt we needed to test lots of features to be sure we knew what would resonate with users … or … we aren’t committed to features x, y, z yet but we know our competitors are planning to so we wanted to be first to market
• We need to hire a team in financial services now to address the needs of that industry [yeah, I know we don’t yet have big customers there. ok, I know our product isn’t yet verticalized. still, we need to start now or we’ll be behind.]
And so on. Trust me – each additional complexity you add before you’re ready decreases your probability of being truly excellent at the things you want to do extraordinarily well.
Instagram didn’t rush to Android. They also didn’t do video. They were truly excellent at what they did do.
What do you want to excel at? How will today’s “toe in the water” initiatives distract you or take your management’s time or attention off of your core business? How likely is your, “won’t take too much time” initiative to come back and bite you in the butt?
I recently wrote a post about negotiating with suppliers called “The End of the Mexican Road.”
The post talked about how to find the lowest acceptable price & terms in a deal through testing.
In the post I made clear that I believe that all negotiations should seek to find fair deals where both parties can feel good about the outcomes. But that doesn’t mean always just saying “let’s split the terms 50/50 down the middle.” Often that doesn’t make sense.
But what about when you’re negotiating with buyers and not suppliers?
This process is obviously very different as you will likely have much less leverage.
Most people claim to not want to deal with the hassles of negotiating. I think most of us feel this way, really. But it’s not a reality in business. While you may be able to offer a price & terms for your service and not ever negotiate (especially if you’re an Internet company that sells cheaply to small businesses over the web and without onsite support & service) – you’ll still likely have to negotiate on business development deals. So please see this post through that lens – at some point when you deal with larger companies: enterprise buyers, biz dev partners, VCs or one day acquiring companies – you’ll like encounter these negotiation issues.
I could sum up my negotiation mentality as a seller in one phrase that I’ve used as short-hand for my portfolio companies for years, “Everybody wants their pound of flesh.”
It’s short-hand for showing that despite our aversion to the process of negotiations – as buyers we’re conditioned to it and even rewarded for it.
Reprinted from Fred Wilson’s A VC. Original post here.
Hiring is a process and should be treated as such. It is serious business.
The first step is building a hiring roadmap which should lay out the hiring plan over time by job type. This should be built into your operating plan and budget. You want to be very strategic about how you invest your scarce resources into hiring and think carefully about when you need to add resources.
Once you have done that, you want to have a system for opening up these positions for hire. This should not be done lightly because each position will require a fair bit of work by a bunch of people to hire for. Don’t open up your hiring process lightly.
The first step in opening up a position for hiring is to define the position you are looking for. Most companies call this a job specification (or spec). The spec should outline the role that is being filled and the characteristics of the person who will be successful in the job. Here is a job spec for a brand strategist job in Twitter’s office in NYC. If you click on that link, you will see that it starts with a high level description of the role within the context of the larger Twitter organization. Then it gets into what it will take to be successful in the role. Then it lays out specific responsibilities and finishes with the background and experience that Twitter is looking for in the candidate.
The manager who is directly responsible for the person being hired should draft the job spec and it should be signed off on by the CEO and whomever is in charge of HR (which could be the CEO in a small company). Once this job spec is published on your jobs page, this position is officially open for hire and the process begins.
Your company should have a jobs page. Even if you are a five person startup, you should have one. It should articulate what it is like to work at your company and list any open jobs. It should be linked to at the bottom of your webpage, right next to the link to your about page. This is important. Don’t put it off. Here is Etsy’s “careers page”. It’s a good example of what you want to do on your jobs page.
There are web-based solutions to get your open positions onto your jobs page, track the candidates through the hiring process, and provide workflow for your hiring team. In the industry vernacular, these systems are called Applicant Tracking Systems (ATS). Many of our portfolio companies use Jobvite, but there are plenty of other options out there as well. You do not need to build this stuff yourself.
Once the position is open, you want to crank up the sourcing process. We talked about where to find strong talent two weeks ago. Do not take the “put the job opening up and let the applicants come” approach. That will not get you the best people. You must go out and find the talent you want to hire. You can use your existing team, that is where the best leads always come from. You can use your network. You can use recruiters, both contingency and retained, and you can use services like LinkedIn and Indeed. You want to cast a wide net and work hard to source the best candidates you can. This is a time intensive process. Many companies will hire an in-house recruiter to help with this process, particularly when recruiting engineers, designers, and product talent. I’ve seen companies as small as ten employees bring on in-house recruiters. I am a big fan of making that investment because it pays dividends in terms of better talent.
Once the candidates start coming in, you will need to vet them to determine who gets an interview and who does not. Someone inside the company must lead this process. If there are HR resources, this vetting process starts with them. But the manager who is hiring for this position must be directly engaged in this vetting process. A HR professional can identify the candidates who don’t come close to meeting the requirements of the job and filter them out. But the hiring manager should go through the applications of everyone who is close to being a viable candidate. He or she knows best what the job entails and can make the kind of “gut calls” that often lead to the best candidates.
You will want to interview a decent number of folks for every position. There are no hard rules for this, but the more people you meet, the better job you will do with the hire. Of course you can’t meet everyone. Many companies like a 15 minute phone call (the phone screen) as the first filter into the interview process. A skype video call is also a good way to do this. At USV we have experimented with a video application (using a service called Take The Interview), with good results. The phone or video screen is an efficient way to identify the small group (a half dozen to a dozen) that you will want to do a face to face interview with.
Once you get to face to face interviews, you will want to figure out how to get as many folks in the company to meet the candidates as possible. Our portfolio company Return Path has each candidate meet with four to eight employees during their interview process. That is a lot but Return Path makes a huge investment in team, culture, and their employees and they feel it is worth it. It may be worth it for your company as well.
Many employees don’t know how to interview and you should teach them the basics as well as educate them on what you are looking to learn from their interview. Some training on interviewing as well as a quick feedback form for each employee to fill out will provide consistency and clarity from the employee interview process.
Most CEOs I know interview every hire their company makes until they get to be more than 100 employees (or more). Even if you have a head of HR and a top notch recruiting team, the responsibility for hiring is yours and yours only. A bad hire is your fault. A good hire is your success. So do not abdicate your responsibility to make the final call on each hire until your company is developed enough and strong enough to start making these hires themselves. This is how you build a great team, a great culture, and a great company.
Once the successful candidate is identified, you will want to do some checking on the person. I am a fan of making reference calls on everyone. They are not that hard to do and you will learn more from them than any other source of background checking. LinkedIn is particularly good for this. If you connect to the candidate on LinkedIn, you can quickly figure out who you know that knows them. Call those people and do your homework. It is also pretty wasy to do a simple background check for criminal or civil information. We don’t do that at USV but I know a lot of companies that do it as a matter of good corporate practice.
When you are ready to make the hire, you must prepare an offer letter. The offer letter will outline the compensation you are offering and any other salient terms of the employement offer. Have your lawyer help you draft the first one you send out and use it as a template for all future hires. Offer letter are written agreements between you and the employee and treat them as such. Sign the employment offer and have the employee sign it to acknowledge that they are accepting it.
That’s the hiring process. Done right, it involves a huge investment in each and every position. So many startups cut corners on it because they simply don’t have the time or the resources to do it right. I would encourage everyone to take a step back and think about the costs of not doing it right and commit themselves and their companies to doing it right. You will see the benefits in time. And they are large.
Raising money is hard. And when you’re relatively new to the process it’s easy to be confused by the process. There is all sorts of advice on the Internet about how to raise capital. Of course much of it is conflicting.
I’ve raised money as a “hot company” and I’ve raised capital when no one would return my phone calls. I’ve raised in boom markets and when everybody thought the Internet was a fraud. I’ve raised seed rounds and A-D rounds. I raised money as an entrepreneur, like you, in 1999, 2000, 2001, 2003 and 2005 for two different companies.
And of course I’ve sat on the other side of the table: As a VC. I now observes the fund raising process as a profession. And I also now have to raise money myself, but this time from bigger institutions that our industry calls LPs (limited partners).
I’ve tried to make this advice as well-rounded and biased free as I can. This is not just the perspective of a VC although I can’t say I have zero VC bias. This is the fund raising perspective from both sides of the table.
For those that want the answer without reading a long post – here it is. Fund raising (as is much of life) is a sale – pure and simple. The sooner you understand that the sooner you can plan your campaign.
As with any sales campaign you need to:
• Qualify your buyers early so you focus your scarce resources on people likely to buy your product
• Spend time researching your buyers and not just pitching them
• Call high. Partners make investment decisions.
• Meet in person. They’re not buying a book on Amazon or shoes on Zappos. They’re buying you. And that doesn’t work remotely.
• Build a relationship with your investors over time. “People buy from people they like, trust, respect and … believe.” (Zig Ziglar). Trust doesn’t come from one 45-minute Powerpoint pitch or 30-minute demo.
• Create scarcity. Three rules in sales: Why buy anything? Why buy me? Why buy now? If you haven’t read my post about that, you should. The hardest is the last: Why Buy Now. People avoid difficult decisions until they have to make them.
Every company is different so it’s hard to listen to advice from the uber-successful fund raisers. Their story will likely be very different from yours. Fund raising is bloody hard. It takes a lot of work. Don’t believe otherwise.