I bought fresh collard greens from Elder Bond and his mother Lela on my way home from work. I asked if I could take a picture. Mr. Bond said yes and asked me if I would put the picture on the Internet for him. So here it is!
I bought fresh collard greens from Elder Bond and his mother Lela on my way home from work. I asked if I could take a picture. Mr. Bond said yes and asked me if I would put the picture on the Internet for him. So here it is!
My business partner Adam and I spent a few days doing business in San Francisco last week. All business and/or relationship development, no fundraising.
I've been to San Francisco multiple times, but this was my first visit as the CEO of a start-up. (If you're new to this blog - my company Argyle Social is based in Durham, NC.) It was an eye-opening experience. Turns out that a lot of what they say about the Valley is true.
1.) Everyone very genuinely wanted to help us out. We met with 8 companies - some big companies that you may have heard of like Twitter and some smaller companies that you will probably hear of soon. Every conversation was incredibly transparent and collaborative, even though Adam and I were complete strangers for the most part. A case in point of start-ups (and former start-ups made big) helping each other out.
2.) Everybody knows everybody. The UserVoice guy went to a beer night at Klout. The Klout guy's brother is the API guy at Twitter. The business development guy at Twitter went to UNC. (You get the idea.) No different than any other start-up community...except that the Valley connections are with the most important companies in the world. Adam and I made great connections on this trip and I'm confident that these great connections will yield even more connections.
3.) Start-ups are everywhere. Adam got the great idea to start using Foursquare on the trip...and he convinced me to join the effort. It was amazing - and, frankly, frustrating - to do a Foursquare check in at Klout and find that GitHub, EventBrite, EngineYard, a laundry list of other interesting companies are within a 100 yard radius. There are a handful of start-ups in Durham, NC that I consider peers. There are a handful of start-ups in every building south of Market in San Francisco. And we didn't even venture out to Mountain View, Palo Alto, etc.
I'll be making trips like this (at least) once a quarter going forward and I strongly recommend it to any other CEO of a web start-up. It is useful to get away from the office so that you can think, helpful to build relationships outside of your geography, and energizing to get plugged in to the epicenter of the business.
Book a few meaningful anchor meetings that actually warrant the trip and then work your network to fill up the rest of your time with spec meetings.
The event was a lot of fun and we met quite a few interesting candidates that I suspect we'll phone screen over the next couple weeks. We also met an endless stream of unemployed people - some recently, some more-than-recently - that had spent their careers at big companies like IBM, Cisco, etc.
Many young professionals and graduating students look to these big companies as the "safe" place to work. You can get experience, you can move up the ranks, and so on.
There are certainly reasons to work for big companies, but I believe that this "safety" is a fallacy in large part because one has very little control of their own destiny at very large organizations. A fluctuation in the share price or a decision from on high or a mistake four times removed from one's role might end up in cancelled projects, missed promotions, or worse. The unemployed big company people I met at the event seemed perfectly capable, just unfortunate.
Sure - start-ups are risky...and risky beyond comprehension in the very early stages. But one's scope of influence is much larger and the distance between input and output is practically zero. Plus, one can actually eliminate risk at a start-up. Most of my day-to-day actions at Argyle are focused on making our business more predictable, repeatable, and scalable.
To bring this full circle, imagine the irony when one of the larger companies that participated in the Big Top event "pitched" the audience by showing a video that featured its employees gushing about their job security and peace of mind. I couldn't help but laugh to myself just a little...
Argyle closed a $1.24M Series A a few weeks ago. You can read about it on our blog.
Though we ended up opting to raise an internal round, I spent lots of time interacting with several prospective investors. I learned some lessons along the way, mostly by making mistakes. Here are a few mistakes/lessons fit for public disclosure:
1.) Don't waste time following up on unsolicited emails from Junior Associates. It was pretty exciting to get pinged by prospective investors the first few times, but I quickly caught on to the schtick. The pitch is always the same - We've heard a lot of great things about you, we're interested in the space, let's spend some time on the phone. It only takes a couple of these phone calls to realize that these emails usually come from a 24 year-old Associates that just got out of an investment banking job, knows absolutely nothing about your business, and has next to no influence at their firm. They're just prospecting for deals.
2.) Don't waste time talking to funds that don't invest in early stage deals. Everyone says that they're an early stage investor, but that's certainly not always the case. Many mid/growth stage investors will spend time with early-stage companies just to get a close look at the business/team in hopes of building a relationship. Make sure that you understand the fund that you're pitching - both in terms of deal stage and fund stage - otherwise you'll spin your wheels with someone that is 18 months away from even thinking about writing a check. Most VC/PE funds detail the characteristics of a typical deal on their site...or they'll simply tell you if you just ask.
3.) Don't discount the power of the network. Several people helped me kickstart the fundraising process by making email introductions to prospective investors that I didn't know. At the time, I was a bit surprised by how many of them turned into significant conversations. Looking back, it makes a lot more sense. The network is everything when it comes to putting a deal together. Once I made a connection with an investor, it was very common for them to introduce me (via email) to a portfolio CEO or another propsective investor as a part of the shakedown process. It really is a game of who knows whom and who thinks what - a game make all the more interesting because everybody knows everybody else.
These are the tip of the iceberg lessons. I'll share the rest in my memoirs. Or perhaps over drinks if you buy me enough beer. :)
...happens again this fall. Details below.
The Bull City Startup Stampede is back! After a very successful spring season that brought 15 companies to downtown Durham for 60 days of free office space, the Stampede will be running again this fall. Participating companies receive free space complete with furniture and a 50:5 wi-fi connection and access to a wealth of startup experts.
A few participants will also be eligible for free startup law packages from Hutchison Law and Morris, Manning, Martin. Previous Stampede companies have used the initiative to garner media attention for their software or product, raise a seed financing round, and build a top flight network in the Triangle.
The application process is very simple and only requires a one-pager on your concept, team, and market opportunity. Applications close Friday, August 12 at noon.
To apply or for more info, visit www.startupstampede.com. The Stampede will begin September 16 and end November 18.
This post started as a comment on David Cummings' blog - he wrote a great post about his brief experience as a sports memorabilia dealer when he was in high school. His subsequent ventures have been much more successful...and his blog should be required reading for SaaS start-ups.
I've written once before about my childhood obsession with professional athletes - their autographs, their statistics, and - of course - their trading cards. I had a great time as a kid soliciting autographs via fan mail, which was often ghost written by my dad.
David's post inspired me to jot down a few business lessons I can recall from my incredibly nerdy time trading ball cards with my equally nerdy friends in the late 80s and early 90s:
Ask for what you want. I was obsessed with collecting Wade Boggs cards because we share the same, unique last name, because we both batted left-handed, and because we were both doubles hitters - which was code for "too weak to hit for power" in my case. I knew what I wanted and I made the trades to get it.
Know what the other guy wants. Similarly, I knew what my friends wanted. Drew liked Joe Oliver and the Cincy Reds, Joel was a sucker for Jose Canseco, Justin went for any trade involving a Washington Redskin, etc. I made some great trades exploiting these weaknesses. I fleeced my (admittedly younger) cousin for a Jerry Rice rookie card with a crusty Art Monk card that he didn't have - just because he was obsessed with the distinguished Redskin. (Of course, I'm sure I gave up the farm to get an elusive Wade Boggs card on several occassions.)
Understand value. I remember verly clearly chirping to my father: "This card is worth $10!" And he would invariably respond: "Worth $10 to who?" His response infuriated me when I was a youngster because I never had a clever retort and because I knew that the card was worth something to someone besides just me - but I didn't really understand how or why, that is other than it was listed in the Beckett Baseball Card monthly as worth $10. Turns out that the market defines the value - not me, not my dad, and often not even the hallowed Beckett.
Take care of your childhood toys. My father had several thousand dollars worth (in 1991) of baseball cards from his childhood - Mickey Mantle, Whitey Ford, Willie Mays, etc. He just made the mistake of clothespinning them to his bicycle so that his spokes would make a cool noise while he rode around the farm. :)
I've had people ask me this question several times over the past few months. My usual answer is customer acquisition...but my new answer is Thomas Ferdinand Stowe Boggs:
My wife Kelly and I welcomed Thomas - our first child - on July 3, 2011. He's a happy little guy. And his mother and I are having a great time learning how to parent.
The Boggs Blog will resume its regular programming as soon as I'm able to figure out my new day-to-day programming.
I've been switching in and out of quarterly planning mode for the past few weeks. So I thought I'd share a few thoughts on the matter:
SWAGs are fine at first. Our Q1 2011 plan was our first ever official "quarterly plan". I put it together an hour before I presented it to the team.
I pulled most of the quantitative goals out of thin air and spent 30 minutes running through the product plan by Adam. It really wouldn't have made sense to do much more at the time. We were still in survival mode at the time, so the plan really boiled down to "ship product, get customers, as fast as possible".
We moved around some of the product priorities, but we otherwise did just about everything that we said that we were going to do - including hit the number. Execution against a plan builds credibilty with the team and the board, so this was a big win for us.
SWAG planning falls apart fast. I did the Q2 plan in the same fashion and it burned me a little bit.
My board called me out on one of the numbers that I lazily forecasted. (We were very fortunate to have numbers that actually started to matter!) And our Director of Operations called me out for not including him in the process, rightfully so I might add.
At this point, we had enough moving parts to warrant a more thoughtful plan around top priorities. In retrospect, I think this transition snuck up on me a little bit. When you're slogging it out every day, it becomes difficult to look up and recognize that you're actually starting to make progress.
Survival mode becomes habit if you're not careful. And a potentially a dangerous habit if you don't poke out of the weeds from time to time. It is imperative to make sure that the team is marching towards the same objective, even when you're in the process of figuring out the direction.
Minimum Viable Planning. The Q3 planning process has been much more collaborative and much broader. That said, the process remains fairly lean. We're using the same planning template as the past, just with a clearer story and more supplementary content.
Instead of dictating the goals and plans, I've tried to set a direction and the top priorities - in conjunction with Adam - so that the team and I can collaborate on the plan. Every functional area has provided P1s (short, memorable phrases like "Build Machinery" that represent the "priority one" for the quarter) and a few quantitative goals that align with the strategic theme for the quarter.
We have a plan and it is a smart one. And we're going to execute the sh!t out of it.
That said, there are definitely some things that I'll do differently when we start planning for Q4. I suppose I'll write about it then.
My sister and I made up lots of words when we were kids. (This is before my brother was born - when we stopped making up words and just taught Evan to repeat the silly things we said.)
The words made no sense whatsoever and I have no idea what in the world we were doing that made us come up with them. But I'll never forget "chungum", "mezzali", "flowerdymane" and others - nor will I forget what the words mean!
Silly words and acronymns are fun and they're great tools to drive process for teams. For example, we use the following at Argyle:
Any homemade words or acronymns you'd like to share?
My friend recently closed a financing and will have his first board meeting this afternoon. His company has been around for a while and is doing quite well - but this is the first institutional money he's raised and the first time his company has had an "official" board.
Exchanging emails with him this morning made me think about Argyle's first board meeting in October, so I thought I'd share a few thoughts that entrepreneurs might consider going into their first board meeting with investors:
You might also want to read some other tips for start-up board meetings that I published a few weeks back.
One of our biggest sales operations hang-ups to date has been the lack of clarity around the sales process and lead/opportunity designations, so I spent a lot of time last week documenting Argyle's sales process and tweaking Salesforce to accomodate.
We created specialized values (beyond Salesforce's standard values) for Lead Status, Activity Type, and Opportunity Stage and a few flow charts to reflect our view of the world and our evolving sales process. We discussed as a team this morning.
A few lessons learned:
Thoughts? Anything else to consider for early-stage, sales-driven start-ups?
The Argyle sales machine is powered by three very talented youngsters: Danny, Matt, and Clay AKA "DMC". Even though they're not 15 year sales veterans, they're very quickly learning the trade and very quickly driving results.
They're also very quickly showing many of the classic sales behaviors!
They follow the money. We made a minor tweak to our comp plan last month and the team very quickly figured out the types of deals that make them the most commission. And now they're trying to find as many of those deals as possible. Similarly, they're quickly learning to make calculations regarding their time, the particulars of the prospect, the likelihood a deal closes, and the likely pay-off. This is exactly the type of balancing act that you want them to learn as a manager.
They ask for what they need to make more money. Our product is constantly evolving and we definitely have a few shortcomings in some important funtional areas. And the sale guys are very vocal about it. In their minds, addressing these shortcomings will help them sell more product...which will help them make more money!
They ask for what they need to save time...which helps them make more money. We use Salesforce.com and we have (what I suspect is) a reasonably advanced implementation for a team as small as ours. But our guys are always driving for more process and cleaner workflow so that they can spend more time dialing and less time administrating. (This type of process feedback is one reason our team rocks!)
In short - our sales team does EXACTLY what we pay them to do. Which is why it is critical that sales compensation plans align with broader sales, marketing, product, etc. strategies. More on this in a future post.
I updated Argyle's vacation policy in our wiki tonight:
Kick butt and take names. Take as much time off as you need to optimize future butt kicking and name taking. Just let your manager know when you'll be out of the office by completing the Out of Office Form.
(I added the bit about the form.)
Our vacation policy is very much inspired by the Netflix Freedom & Responsibility Culture.
Brian Halligan - HubSpot CEO - gave a great marketing startegy interview on MarketingPilgrim.com earlier this week. In the interview, Mr. Halligan drew an interesting parallel between renting and buying as an online marketer:
Marketers are traditionally renters. They rent space on shelves, they rent space in Adwords, they rent space at tradeshows or they rent giant lists to cold call from. None of this is anything they own.
We believe that the best way to market a product or service is to create assets that you own and can nurture. Things like unique content, links, Facebook fans, Twitter followers are assets that stick around and, from a monetary aspect, can cost a lot less than the old model.
I dig the analogy. Here is my addition $.02:
We drive a fairly significant volume of leads through a "download a whitepaper" call-to-action - which has a great conversion rate, but generates leads a bit further up the funnel than a "request a demo" or "free trial" call-to-action. (I've written about the trial vs. demo call-to-action previously.)
Whitepaper leads can be tough to qualify - they haven't indicated any direct interest in our product, just the contents of the whitepaper. As a result, our sales reps are very direct in their email follow-up. Here is an example email we send to our whitepaper leads:
I saw that you downloaded one of our whitepapers, and thus I have a question.
Which one of these categories do you fit into?
A. You're just checking things out and there is no way you want to talk to me about Argyle.
B. You're maybe interested and may want to talk b/c you're learning and have questions.
C. You're dying to talk to me and couldn't wait for this email to arrive to your inbox and you are ecstatic that it's finally here.
Let me know which bucket you're in and I'll act accordingly!
This approach works really well! We make it very simple for the lead to qualify itself. If the answer is "A" - then great, we don't waste any time on the lead. If the answer is "B" or "C" - then we spring into action. The anecdotal response rate is significantly higher than the usual boring, email follow-up stuff. And prospects get a teensy glimpse into the friendly way we like to do business at Argyle.
Hat tip to Brad McGinity from Windsor Circle for recommending the format.
Generally speaking - it is better to give than to receive.
That is unless you're selling something, in which case only suckers give without receiving. Reciprocity is the name of the game when it comes to negotiating with a prospective customer, partner, etc.
A very simple example
This is a difficult discipline to build because most salespeople are natural pleasers - who doesn't want to make the customer happy by giving them what they want?!? It takes a lot of confidence to tell a prospect that is ready to buy "no", in part because it is always sooo tempting to just get the deal done.
The reality is that a lack of this discipline can get very expensive, very fast. A skilled negotiator on the other side of the table is going to keep asking until the Rookie says "no" and tear the rep to shreds in the process. (I've been on the giving and receiving end of said shredding process!)
Putting a condition on most "yes" answers is a great way to diffuse this problem.
One of the most annyoing things about business school were my many classmates that had "an idea for a start-up" that never did anything to realistically pursue the idea. Many of these classmates were just poseurs. Others had personal constraints (family, fear, debt, etc.) that precluded them from taking the first step - which is perfectly understandable.
I think that the underlying problem for a lot of these people and - quite frankly - most business people with an "idea" is that they don't know how to take the first step.
Turns out that most business folk don't know that ideas are worthless...and that getting from "idea" to "product" requires incredible amounts of work, thought, patience, etc. Getting from "product" to "company" is about 10X as difficult.
Too many that think that the first step is writing a business plan and then hiring some contract developers. Too few realize that the correct first step is a technical co-founder.
I sent this article by David Albert - An Open Letter to Business People - to some of the entrepreneurial faculty at UNC Kenan-Flagler Business School with the hope that they would share it with every MBA student with an idea that "just needs a developer":
So you have an idea for a startup? Awesome! The world needs more people like you. You're going to have to start by finding a technical cofounder. This is hard because you're not a programmer, so I'm going to teach you how to do it.
You'll notice I said "technical cofounder" and not "developer." That's important. If you decide to pay someone a few thousand dollars for a web app made to your specifications, you will probably fail. Why? Because your idea is not very good yet. You're going to have to iterate a whole bunch of times before your idea succeeds. You need someone who's going to be in it for a long haul. You need a technical cofounder.
I posted this today because my friend Patrick Vernon sent me the following email:
By the way, I can’t tell you how often I share this article. I’m forwarding it again this morning to a former student with a “great idea.” :)
We toe this line pretty frequently:
The situation usually arises during the course of discussing how the feature appears to the user. Someone (usually me) suggests how it might be useful for the customer to see, use, etc. just a taste of the complexity and justifies it by fabricating a very clever use case or advanced implementation or a "omg - wouldn't it be sooo cool if?!?!" scenario.
This is often when the good stuff happens. But this is also often when you might be outthinking your customer.
I suggest reminding yourself on a regular basis that your customers don't think about your product NEARLY as often as you do...and thus probably don't care about the complexity, nuance, etc. in the same way.
They just need your product to work consistently. And hopefully without much effort.
If you've ever worked in sales, then you know this routine:
This is a universal occurence and of couse we deal with it a lot at Argyle.
I recently read a blog post about leaving a "break up" message with these leads. (Can't remember the source - will add a link if I can dig it up.) Instead of the standard follow-up stuff - thanks for your interest, just following up, value proposition, etc. - the break-up message is literally a break-up:
Hey there - it's Eric calling from Argyle. I've tried contacting you a few times regarding your recent inquiry. We haven't been able to connect, so I'm guessing you've moved on to other options. If there is anything I can do to be helpful, please don't hesitate to call - otherwise, this will be the last time I contact you. I appreciate your interest in Argyle!
We've started doing this at Argyle...and it works. Don't have any quantitative data, but the anecdotal evidence is pretty compelling! Prospects call back and they respond to the email. And if they don't, then your sales reps don't waste anytime chasing down prospects that aren't ready to start the sales process.
I suggest giving it a shot.
My friends Matt and Brad started a company called Windsor Circle and recently raised $350k to build e-commerce integration software. Matt led his first board meeting a couple weeks ago and, prior to the meeting, emailed me and another local start-up CEO - Doug from Spring Metrics - to ask about "the three things to keep in mind" for early stage start-up board meetings.
Here is a summary of my response to Matt's message:
1. Be careful that you don't spend too much time talking about product minutia. We spend maybe 10 minutes of every board meeting talking about the product. It is usually a description of what we've done and what we're doing next...and how it will help us generate more revenue.
This might seem counter-intuitive to lean-start-up-product-driven entrepreneurs - Doug actually disagreed very strongly in a follow-up email. The reality is that we OBSESS over our product and our customers at Argyle. Aside from prioritizing projects, product development is the part of our business that I worry about the least. (This is a testament to our product team - Adam, Mike, & Josh.) So I prefer to use our board meetings to talk about business-building issues.
2. You shouldn't show your board a number, forecast, etc. unless you can explain in detail where it came from or at least explain the assumptions you made when you derived it. I've gotten called out on lazy numbers a few times, so I've learned this one the hard way. This mainly applies to forecasts and goals - actuals are generally pretty easy to explain.
3. You'll get MUCH more value talking about the future than reviewing the recent past. The standard metrics and reports are important and it is obviously very important to understand how these numbers drive your business. But it is also very easy to get caught up in details that don't matter nearly as much as pending decisions around fundraising, recruiting, partnerships, customer acquisition, etc.
I'm no expert in board meetings. And I'll be the first to admit I was pretty terrified when I led our first board meeting back in October. And I'll further admit that I've got MUCH to learn about being a CEO and running an effective board. But I think we do a pretty good job focusing on key issues at the board level.