Memo to older entrepreneurs: Don't wear a suit when pitching to VCs

Another post about age and entrepreneurs, this time written by VC Seth Levine (a colleague of Foundry Group's Brad Feld):

I recently waked into a pitch meeting for a social networking related business and was surprised by what I saw. I had interacted with the entrepreneur over email – taking a look at the initial business plan and setting up the meeting – but we hadn’t met in person before. In front of me were three guys in suits, each in their late 40′s or early 50′s, with an older Dell laptop and a paper print-out of some product ideas. And as I sat there listening to their pitch I couldn’t help but think about how differently I might have reacted if this team was in their 20′s or 30′s, dressed in full tech/nerd hipster outfits (or at least jeans and sneakers), and whether there is a negative age bias in venture capital.

Levine tries to sound sympathetic, but it's pretty clear that there is a strong negative stereotype on his part, exacerbated by the choice of clothing used by the team pitching him.

In the comments below the post, there's the expected back-and-forth between older startup founders who bring up the advantages of age/experience and others who trot out more negative stereotypes (e.g., old founders can't handle long hours) and outright misinformation (older founders seek venture capital as income replacement?! C'mon!).

But one of the most interesting comments was by someone named "Kendal":

No one is addressing the elephant in the room. VCs prefer younger entrepreneurs because VC money is largely a game of pimping the inexperienced. Newbies won't argue deal points and won't resist when VCs strong arm them to place their own people in management positions and pick board members.

Experienced entrepreneurs, or those with long domain expertise (generally people in their 30s,40s,50s) won't simply rollover and obey orders. Why? Because they actually kind of know what they are doing.

Levine disagrees with Kendal, but there's a parallel in the corporate world and even the military: The younger the hire, the more easily they can be molded.

I am going to keep an open mind about all of these opinions until I've had more experience in the startup world myself.

"Peak age" for entrepreneurs

There's a vibe in the investment community that only ventures started by young people are worth backing. After all, a 22-year-old "boy wonder" fresh out of Stanford can work 100 hours a week on a startup and doesn't have parental responsibilities or outdated thinking.

I can see the logic. But I also think that middle-aged people have their own advantages and efficiencies, ranging from domain expertise (including specific technical abilities or industry networks) to management smarts (including hiring and team-building skills). The data on the success of young vs. old founders is mixed, but I am heartened by the success stories, including many companies started by middle-aged graduates of the mid-career MBA program that I attended. HubSpot, E-Trade, and A123 Systems are the most well-known, but there are many more up-and-coming ventures such as Buzzient and mob376. In addition, Bill Aulet, the managing director of the MIT Entrepreneurship center, started or joined several new ventures after completing the Sloan Fellows program -- and he has four kids!

Work-life balance for entrepreneurs who are parents

Last night I was awakened by the sound of my son crying. He was sick to his stomach, and he would spend the next few hours retching.

It also meant that one parent would have to stay home to keep an eye on him throughout the day. One of us has a steady job that brings in income and health insurance, while one of us doesn't have a fixed office address and works weird hours on two ventures that have yet to bring in a penny of revenue.

Guess who stays home?

Meanwhile, the educational product startup is on hiatus because my partner's wife just had a baby (their second). When do you think we'll be meeting next to move product development along?

I bring up these examples not to criticize my wife and my partner, but to recognize the reality of juggling a business and family responsibilities: No matter how hard you want to charge forward on your venture, you can only go so far in terms of sacrificing your family's well-being.

Where I draw the line often depends on the availability of childcare. My kids rarely see me at night on weekdays, because I am off at meetings or working on the software startup. But they can manage my absence, as my wife is back from work at 5:30 and can watch them. During the day, they are at school or daycare, which allows both me and my wife to work. But when one child is unable to attend school because of illness, or there's a new baby on the scene, that's when the ventures have to take a backseat to family realities.

Time-constrained ...

Sorry for the lack of updates. That usually means progress, and I'm too busy to write. Sometimes, however, it means hopelessness. The software startup is progressing well, the six-month startup had some rough patches but is back on track this week. I'll share more when I have more time. In the meantime, be sure to follow the @iterinc twitter feed. I do post there more frequently, especially when time is lacking ...

Small-business email and mistyped addresses

Just got off the phone with a potential supplier who I had spoken with last week about the six-month startup. I had promised to send him some specs. Why hadn't I sent them yet? 

I was surprised. I had sent the email, and was wondering why he hadn't responded. Was I being blown off because we are too small, or is he not that responsible about following through?

Turns out that there were two problems. I had mistyped his email address when he gave it to me over the phone, so he didn't receive it. But his company's email server should have immediately bounced my message as undeliverable. It didn't, so I didn't even know I had made a mistake. Frustration and impatience were the results on both sides, although the phone calls helped clear up the situation and get things back on track.

The moral of the story: If you are a small business owner with a dedicated .com domain for your email, make sure it is properly configured to handle email problems, and notifications are sent out to anyone affected by or responsible for missent emails or email outages. Really small companies may not have a dedicated IT staff, but there are consultants out there who can troubleshoot and fix problems. Many other people (myself included) have our company email hosted on Gmail through the cloud-based Google Apps.  

Quickbook alternatives through Google Apps

One thing that many startups are forced to do is run on a pretty tight budget. Both of the ventures I'm involved with use free, cloud-based platforms when possible. Google Docs for spreadsheets and PDF storage, Yammer for project collaboration, Gmail for email (including the Google Apps version, which lets us easily use a .com domain within Gmail), Adium for instant messaging ... you get the picture. But one thing that kind of scared me when I first heard about it at a small business accounting seminar was the high price of QuickBooks. This is the industry standard application for keeping track of expenses, revenue, purchase orders, and other common functions. It's not cheap: More than $200 for the Mac version. The high price is not surprising. It's an Intuit product and QuickBooks has a lock on the market -- with a lack of viable competitors, and industry standard acceptance among customers and accountants, QuickBooks can pretty much charge what they want. What alternatives are out there? I checked the chatter on Hacker News, but nothing promising popped out. But then I noticed through Google Apps that there are a bunch of free options -- small companies and products that I had never heard of, but had offerings that could replace Quickbooks for companies on a budget. I tried myERP, based on the fact that it seemed pretty comprehensive (ERP, accounting and CRM functions) and it was free for two users, and the Google Apps user ratings were mostly positive. But after activating the app, I was very surprised to discover that there is no tutorial to use this somewhat complex product. The "How to use myERP" was literally a list of features, as this screenshot shows:

I hunted around for a video tutorial, but no dice, even though I saw that other users had asked for them on the support forum many months before. This was very surprising to me as a founder and someone who has dealt with online design and help pages many times throughout the years -- videos are extremely easy to make using QuickTime or other easily available tools, and assuming people on myERP's staff are familiar with the product, it should take more than an hour or two to create a basic "setup" video or videos showing common tasks. But what convinced me to uninstall myERP was lack of support for a very common expense -- mileage reimbursement. The support forum suggested a workaround, but it was convoluted and not a long-term solution. I tried Yendo next. Only one free user for the trial version, but Yendo is much better with tutorials and support, as this video shows: I'm still working through the setup now, but if it can handle the basics I am looking for now -- expense tracking, simple entries, and basic accounting reports, I'll be happy.

Sole founders

Heard a story yesterday about a tech startup with a problem:

Only one founder.

This is #1 on Paul Graham's list of 18 things that kill startups, and as someone who is currently trying to get two startups off the ground, I can see why. If there's only one person, ideation sessions will be weaker, the founding team by definition will be weak in a few key areas because

• There are no complementary skill sets
• Things will take longer to get done
• Quality will suffer because no one else is vetting the work
• There is no moral support when bad days arise
• Investors will be skeptical

I've heard that the founder is pretty much consumed with raising money. His capital needs are actually much higher, because he's also a non-technical founder running a software startup. He can't code. As a result, everything has to be outsourced, which is just killing his funds.

Of course, it's not too late to bring on another founder, but he's got to move fast.

When the startup feels stuck

When the startup feels like it's in a rut, or no progress is being made (because of team, money, supplier, distributor, etc.) there are a few options:

1) Hope that the logjam will break up by itself

2) Attack the logjam(s)

3) Attack different problems

4) Hope for an amazing stroke of luck -- someone unexpectedly drops a solution right into your path

5) Other outcome

In my mind, #1 and #4 are possible, but unlikely. Option #2 is warranted, but unpleasant, and sometimes not possible to address (eg., a customer repeatedly blows you off). #3 is a great option -- there is ALWAYS something that needs to be done, and making progress on those fronts can make you feel a lot better.

As for #5, what else did I miss?

The six-month startup has a name!

I'm so glad we've chosen a name (which I hope to reveal in the not-too-distant future), and grabbed the .com domain. It gives us an identity to hang our hat on, and is something that conveys more legitimacy to potential partners and customers than just our names and gmail addresses.

Both of us feel more invested in the venture because of the new name.

Next steps: Email, Google Apps, Website.

How to describe a pre-funded startup in one sentence

A business school classmate emailed me to ask what's going on. My response:

Early-stage startup life: Some days are really good, some are depressingly bad, most filled with uncertainty, all characterized by poverty.

What keeps me awake at night as an entrepreneur

I woke up in the middle of the night, with a disturbing thought in my head about the startup:

What the hell am I doing? How can my startup possibly succeed, with competitors lurking out there, little IP, and no money?

The day before, I had a pretty dismal day with the six-month startup (no progress). The tech startup was up and down -- a good lunch meeting with my cofounder in which we narrowed down our next steps, and I did a pretty good analysis of some of the market factors that we need to pay attention to. But we still have so far to go.

In the meantime, I have no income, and many, many costs, including looming student debt (payments start 6 months after graduation).

The worry and anxiety caught up with me in my dream state. Self-doubt regularly surfaces, but this was a particularly bad. This morning I was able to "talk myself down", and pledge to make some real progress tomorrow. But it would help if I had someone to commiserate with at a moments notice (both of my partners were not available).

The financial bar vs. the courage bar

A great quote from Ben Horowitz's blog:

Over the past 10 years, technological advances dramatically lowered the financial bar for starting a new company, but the courage bar for building a great company remains as high as it has ever been.

The quote comes at the end of his post about leaders making tough decisions. Well worth a read.

(via Hacker News)

Phone vs. Email

I admit it. I'm an email guy at heart. I'll gladly spend 10 minutes hammering out an email (or using any other form of asynchronous, electronic dialogue like a forum, Twitter, or G+) than picking up a phone for one minute.

Why? I'm not as good at spontaneous discussions as I am at writing. There's no record of the conversation that I can refer back to. I worry that the person on the other end doesn't want to talk with me for some reason. I hate to make small talk. I forget to ask or say certain things. Sometimes I say the wrong thing. Because it's spontaneous and anyone can say or ask anything, I don't have control over the conversation in the same way I do with email.

But my reluctance to pick up the phone is a limitation, and not just because it takes more time to write an email than it does to speak on the phone with someone. A sizable portion of the population of the population prefers to use the phone over asynchronous communication. For instance, at my old job, I learned who these people were, and tried to accomodate them. Sometimes I was forced to -- they did not consistently respond to email, which meant that I had to pick up the phone or grab them in the hallway if I happened to see them.

I've found that of my two new ventures, the people I interact with for the tech startup are very much focused on email, Yammer, and Twitter. The phone is important only when we have a face-to-face meeting and need to let the other party know where we are or that one of us will be late.

For the six-month product startup, on the other hand, I have found that almost everybody is a phone guy. I suspect it relates to the quick-moving culture of manufacturing, where people tend to be on the shop floor or moving between meetings. Of course, they won't necessarily adapt to my communications needs, so it's up to me to adapt to their ways of doing business -- which means organizing my thoughts, gritting my teeth, and picking up the phone.

A LinkedIn profile for entrepreneurs: Starting from scratch

Tonight's challenge: Rewriting my LinkedIn profile. I've been on LinkedIn for years, and think it's a super tool for highlighting my career and creating a personal brand. But there are two problems:

- It reads like a corporate résumé, as opposed to an entrepreneurship-focused resume

- Some of my career highlights -- including a slew of awards -- relate to expertise that has nothing to do with my current entrepreneurial ventures.

So, I'm going to rewrite it. One thing I've learned from past efforts is that it's very difficult to do a rewrite by looking at the existing entries -- if they're well-written, or highlight elements that are points of pride, it's very difficult to delete them and start from scratch.

Instead, I am going to really start from scratch, based on the things that I know I want to emphasize, and not even look at what I have up there now. I am also going to ignore LinkedIn's classic format, which is oriented toward chronologically ordered corporate careers. I've seen examples on LinkedIn in which entrepreneurs use the "summary" field to write their résumé the way they want, and this seems like a potential approach. Once I am ready to show my work of art, I'll leave a link here ... stay tuned!

Update: David Meerman Scott has written an excellent blog post about why he's not on LinkedIn. Another marketing pro, Seth Godin, also avoids LinkedIn ... and Facebook. There is a sound argument for avoiding LinkedIn for both -- their branding is tied up with their blogs, books, and speaking engagements, and having people turn to Linkedin to learn about them devalues their existing online resources, and by extension, their brands.

Iteration: Drop consulting plan?

In my first post to this blog ("The Six Month Startup"), I talked about doing some consulting on the side to help pay the bills while I got the tech startup and six-month startup off the ground. Yesterday, I met with a former colleague who now has her own consulting business about my plan.

The good news: It's very easy to get started -- basically hanging out your shingle (including putting up a website), mentioning your services to everyone in your network, and starting the sales process with your first leads.

The bad news: Getting into consulting will suck energy from the startups, even if I am strict in my plan to allot just 10 hours per week to consulting. The reason: There are a lot of follow-up and back-office tasks related to marketing, sales cycles, collection, accounting, etc. that not only take up a lot of time, but require attention throughout the day, which distracts from anything else that's going on and reduces the paid consulting hours out of the planned 10-hour weekly allotment.

My colleague asked me: Is it worth it?

I didn't have to consider the answer. No, it's not. I want both startups to have a real shot at success and get the right start in life, and if it means pulling the belt a little tighter, so be it.

Communicating with suppliers: Local accents rule!

I've found that when I am talking to people on the phone for the product startup, local suppliers often have local accents. It's not surprising; die-cutting shops and some printers are blue-collar places. They are usually staffed by people who grew up in eastern New England. When I hear this on the phone, I almost unconsciously shift my own accent away from standard "North American" to something that's a bit more Eastern Mass. But just a bit.

It's not hard to do. I grew up here too, and while I never had a Boston accent -- my parents were from out of state, only a few friends in high school had light accents, and I spent most of my 20s overseas -- speaking with a slight inflection feels natural. I assume it helps a little in terms of letting people on the other end feel more comfortable, but maybe I'm assuming too much.

Design problem: Die-cutting at an angle

A message to my partner in the six-month startup:

Just spoke with someone at in New Hampshire, who designs dies for die-cutting presses.

He said it's not possible to design dies that go at an angle. This is what you originally thought (the cookie cutter model). I spoke with another die designer in Wakefield, who confirmed this but added that when you are stamping foam, it usually ends up with concavity because the foam compresses as you push down (this kind of jives with what seemed to think it was possible). However, the Wakefield die designer said that he is not sure if you could design a die that tried to get a uniform concavity every time. He noted that it's usually something people try to eliminate with foam.

He suggested that different cutting techniques -- reciprocal knife cutting and water jet cutting -- might be possible, although the latter might not be appropriate for foam.

I got another piece of intel from someone who actually operates die presses -- she said it's basically 15 cents every time the press comes down.

So, we have a few options:

- Pursue die cutting, test concavity on different foams with different foam densities
- Explore alternate cutting tech (reciprocal knife cutting)
- Molds?

Deciding on a company name

For the product startup, we need a name. I thought we could put it off for awhile, but that won't work. An excerpt from the email I sent to my co-founder this morning:

Let's get a good company name and domain through Google Apps. Whenever I talk with people on the phone, they want to know the name of the company. I tell them "<redacted>" but that's the product name ... not sure if we want something that could be more flexible for future products in different areas. It also looks weird when I send email from my personal or .edu accounts. I figure if we decide on a name, we can simultaneously get the domain and a Google Apps account, which includes email from that domain.

Die cutting costs, and a metrics mistake

Talking to a local die-cutting shop, as I research potential suppliers and prototype manufacturers. Found out that the creation of the die is actually done elsewhere, and that once a production run starts, "every time the press comes down it's 15 cents."

Then there was this, when I was describing the dimensions of the product we want die cut in millimeters:

"What's that? We don't do millimeters."

Chalk it up to quirks of the American manufacturing industry ...

The six-month startup

A little over two months ago I finished business school. Since then, a lot of friends, classmates, former colleagues and family members have been asking "what's next?"

The short answer: Startups.

A slightly longer answer: I am working on two startup ventures, and seeking some consulting work on the side to help pay the bills.

Both of the startups are at an early stage of development. One of them, which I will simply call the “tech startup,” won’t turn into a full-time endeavor until early 2012 owing to prior commitments among the team. But we have already begun work, and are thick in the ideation phase. The ideas are coming fast and furious, and we are constantly iterating upon them.

Then there is the other venture, which I am calling the six-month startup. Unlike the tech startup, the six-month startup is not software. It is centered around a real-world product, which myself and another partner hope to design, build and launch in a six-month period. Technology will come into play, but during design, marketing and order processing, as opposed to the operation of the product (there are no embedded software or other electronics involved). Our idea was hatched in mid-July, and we set a goal of getting the product to market by Christmas. We already have a good idea of the product features and have a rudimentary prototype; now we have to decide on materials and work out the many details relating to manufacturing. I won’t talk about the product just yet, but will talk about some of the learning experiences (and difficulties) as the project progresses.

The idea of building and launching a product in a short period of time is not new to the startup world. “Lean” development processes have been a mantra since the beginning of the Web and perhaps even earlier. It’s also possible to develop physical goods on a quick prototyping/iteration cycle. But, as I’ve found out in the last few weeks, there are a lot of of obstacles to getting a prototype built using the same materials that will eventually appear in the finished product.

Is it possible to simultaneously get two startups and a sideline consulting business off the ground and on a path to success? Probably.

Am I naive to think that we can get a product to market in six months? Maybe.

But I have a belief in myself, my partners, and our ideas. Further, I refuse to accept conventional assumptions about what’s possible until I have tried them myself.

Lastly, while validation of our ideas and building successful businesses are the ultimate goals, I acknowledge that I may fail … but through failure I will learn and iterate for success the next time around.