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.