My anti-telemarketer hack

I don't blame people for doing telemarketing as a job - thats fine. But I've not had consistent success with "please remove me from the list".

Credit: http://www.teaandsnippets.com/

So I've started saying "I don't accept that you are recording the call for training purposes".

They then thank me and wish me a nice day and hang up.

Conclusion: Random people ring to wish me a nice day!

Warn before quitting

Sounds like a great tip for startups right? Especially when I see Gen-Y's failing out of a business after giving it a few weeks concerted concentration :)

Well...this post is for programmers.

If you are bashing away at keyboards on OS/X, then you will be intimately familiar with:

• ⌘ W
• ⌘ Q

But the bummer is they are adjacent on the (non Dvorak) keyboard. For old-timers like me the neural pathways get crossed when keystroking at high velocities (I only have 22 Chrome tabs, 4 Safari tabs, 14 Terminal tabs open at the moment) and you get to kill your Chrome before the brain knows.

So here is the solution:

Warn before Quitting is your friend.

Startup Board Meetings in the US

On the StartMate list, it was asked:

> Can any Alumni or Mentors advise us on what should we expect from US investors? 

Here is my response...its pretty much coloured (or is it colored???) by my personal experience and I know at least one other CEO that experienced extremely adversarial board relationships. Overall I'd say that US investors really are glass-half-full (maybe even 3/4 full!) and so are very positive and supportive - they know that supporting the CEO is their best contribution if they don't think the CEO needs to be sacked.

CAVEAT: If I make disparaging comments about Aussies its only Aussie angels, not VCs :)

Board process is largely about the Board meetings. So I'll focus on that. There are activities around events like funding, M&A but thats all academic right now.

Chairman of the board

A large part of Board meetings is theater. Your board want to walk away confident that you are the guy/gal for the job and so you need to control the show (few points below on this).  We know that Aussie self-deprecation does not play well in the US. So I'd suggest always "having your game face on".

Heres a dump of some generalisations:

Depending on who your US board members are, you can expect a lot more connection to networks and intros. Make sure you milk that. Australian mentors/investors are generally less connected, so make sure you ask US Directors to help you. The really good thing about US folk is they are much more active in this if they are committed to you (director/advisor).

In particular expect intros to other (of their portfolio) CEOs, CTOs etc - this will ostensibly be to share knowledge or get a sales lead but its also for them to triangulate (from someone they trust and who has at least as much tech skill as you) just how solid your product/team is.

US Investors are more likely going to want you to spend money rather than break-even. Because of 2 drivers:

a) they go for growth as that will drive up valuation. Profitability is way down the priority list.

b) they get to invest multiple times and can afford to retain pro-rata.

Generally Aussies don't really have a handle on the 'norms' of expenditures in startups at various stages. e.g % on R&D, % on Marketing, % on Sales team for Enterprise company etc. US guys tend to be able to look at your plan and quickly sum up the anomalies - assume more probing questions. This is because they have larger portfolios and have seen more norms. In a crude sense Aussies don't even know where to look.

KNOW YOUR NUMBERS: If you are a technologist CEO, then give that up. These guys are thinking about value, so per the above point - get inside your numbers. Particularly variations.

Assume your budget is the "statement/plan of record" and you may be held accountable to any divergence. If you are heading off plan, then table it. Thats much better than hiding it and trying to recover - its not your job to keep the board happy, its to keep them informed and to demonstrate you understand the issues and can act.

One nice piece of credibility is to keep long shot sales off your sales forecast. e.g If you are working a deal with BofA or Amazon, then put it in the pipeline not the forecast. (unless you get to contract negotiations).

Keep your board meetings to two hours max - not much can be achieved by digging into issues and seeking consensus in the meeting - you are running the show, so take feedback, don't be combative but reserve your judgement for a few days then feedback to the whole board.

Don't assume they know your business. Nobody does - like you.

Make the board meeting at the end of the day so you can beer or dinner afterwards. Investors will have kids etc so will want to get home which helps to have a hard-stop. Very different to the startup folks who will just keep going.

Have your execs report in the board meeting (for accountability and to build relationships), then excuse them at the end when you do board approvals (plan approval, key hires, options grants, funding, anything with vetos etc). It also helps get an issue answered quickly and coherently ("how come we've got technical problems at Acme Inc?")

To the above point: make sure your execs know they get 5mins and when to get off stage. Keep the meeting moving.

Have a dashboard of your fundamentals so it does not look like you are burying anything. Counter to current fashion, vanity metrics are good. Remember the board meeting is theater so you need to use all tools at your disposal to help the board believe you are great.

Assume if you aren't (or a chunk of your team) in the US, you will be fighting a battle for credibility. Its just a by-product of not being visible when they want you to be visible. Don't expect anyone to call Australia - ever.

In Australia I've seen dodgies like being forced to use someone's accountant as your interim CFO or their favourite Lawyer or funny things to do with expense claims - I've not really seen that from US Investors (but I've only seen VCs not angels).

The most important thing is to super-manage your board:

1. get a board report out a week before the board meeting. You can delay all the other details but give them a top-view in advance.
2. Point out any variations from plan and state the reason why (e.g "we decided to do XYZ tradeshow and it cost us an extra $50K but it looks like its already paid for itself with leads into ABC, DEF etc")
3. if there is anything contentious, then call the heavy-hitters days before the meeting so you know where they stand. (e.g could be a funding or M&A discussion)

Assume everyone has an agenda: Get to know your investors: fund size, stage, how the portfolio is going.

Disengagement: I've not experienced this but I know others who've experienced disinterest from their investors. They either have a large portfolio or a large amount of distress in the portfolio - so if you are ticking over, don't be offended if you don't get much love, its just they are triaging the wounded.

> In addition to this does anyone have template/sample Board Agenda and Minutes of meeting documents? 

I will sanitize one over the next week but initially I made the mistake of actually documenting what was discussed. This is not US style - minutes are pretty sparse and procedural. Its got something to do with lawyers :)

Heres a real example:

2. Business Update
Mr. X provided the Board with an update of general business matters and expectations for Q4, 2012.  Mr. X also provided an analysis of key priorities.  Discussion ensued.

3. Sales Review 
Mr. Y provided an update on the sales pipeline for Q4, and commented on strategic accounts.  Discussion ensued.

Ninja Blocks Temperature

This is the temperature of the RF Monitor in my house talking to the magnificent Ninja Block!

Startup Advice - its all wrong (thoughts for StartMate 2013 teams)

Most days there is an endless stream of startup advice and to a lesser extent war stories.

So much so, I am waiting for a startup to appear that just curates startup advice**

Anyway, this post adds to the noise by providing advice to ignore all advice. So you can ignore me now :)

Mentors hope to add value during the StartMate process by doing stuff like:

• providing access to their network
• asking probing questions
• providing guidance that challenges a startups assumptions.
• suggesting a possible next step

For StartMate teams, each week you will pitch to different mentors and get feedback. The next week you will pitch and get diametrically opposite feedback.

This is natural.

For any one startup there will be many paths to navigate and many options. The mentors are going to give you a perspective from their experience. But its all wrong.

All advice is:

• based on the past
• based on circumstances that suited their unique place in time.
• has a shade of confirmation bias mixed in (e.g there were probably some important pre-cursors to some anecdote that have been forgotten). 

Things change fast now and so some gangsta technique that worked before might be fine or it could be passe, this is particularly true of gaming social networks. I think the idea when receiving advice is to "listen but don't obey".

Over the years I've obeyed advice from board and advisors with mixed results:

• "you need to build a shopping cart so people can buy your $25k product over the web" (bad)
• "who cares you are out of cash - you need to fly to Singapore for this one hour meeting" (good)
• "hire this guy" (meh)

You're running your own show and you will make lots of mistakes, the best CEO's I've worked with absorb a phenomenal amount of input and opinion, process it and make it their own. This sometimes mean they take advice and sometime mean they ignore it. Its not personal.

"listen but don't obey"

** maybe thats HN's voting system.

ask for money (thoughts for StartMate 2013 teams)

TL;DR 

• This post is not about asking investors to drink your Kool-Aid.
• This post asserts that asking prospects (during customer development) to pay ($$$) you for the product is a critical and valuable step.
• Doing this in person is a perfect complement to just running a web A/B test.

In my first startup**  I was too naive to think products could exist without paying customers. So I went out and asked a few enterprise prospects: "If I built this enterprise email filter - would you pay for it?"

They said "yes" - so I built it. Things turned out well.

At ThreatMetrix (we started out as "SpamMatters") we made the mistake of only asking one prospect and so we only made one sale for our first product. It was a big-ass sale that funded the next product but effectively it was a consulting project. This talk covers the early pivots in the ThreatMetrix adventure. Things turned out well.

At StreetHawk we only talked to consumers who wanted to use the product but we didn't spend enough time (initially) with retailers - who would pay us for our fashion aggregation app. The net result was a product that consumers were using but no way to fund an engine of growth. So we asked what product they would pay for and they told us they wanted the same technology packaged differently - dah! (So thats what StreetHawk does now. Things _should_ turn out well).

So, I've learned painfully that one of the best customer validation questions is when....

...you look deep into their eyes and ask for money:

• "Would you pay for this?"
• "How much would you pay for this?" 
• "Will you pay me now and if I don't deliver in 3months I will give you back the money?"

are the type of questions that can save you months of time (and cash).

People are happy to blow smoke up your nether regions whilst their pecker isn't on the block. But once you ask them to pony up some cash the conversation shifts into honesty. This is a skill that most sales people understand but technologists avoid.

Why?

Sales People

Sales people understand that closing a deal is about surfacing and overcoming objections - so the good ones aren't afraid to get "buyers objections" because it really shows the potential customer is internally convincing themselves to not buy the product. The good salesperson can then counter the objections and help the prospect get those issues addressed and emotionally ready to buy.

Technologists

I'm not lecturing on this - I've done this more times than I care. We (technologists) avoid this scenario, because its damn confronting. The embarrassing moment when they tell you your baby is ugly and not worth a lousy $29.95 per month. Its even more embarrassing because technologist's are not trained to handle rejection.

But you arn't selling

The good news is that you don't have to sell - you are just "asking for money" to reframe the discussion more honestly. In fact selling during customer validation is wrong - it means you aren't listening. Your goal is to capture the objections and find what key features/benefits matter****. The debate still rages when you should believe validation answers (Ries) vs when you should 'go with your gut' (Jobs) but if you are hearing "yes I will pay" from multiple people then you are heading in the right direction!

Sounds too "old school"?

Many businesses will argue that a better statistical validation is achieved with a landing page and call-to-action measurement. I think you still need to stare deeply into a few eyes to get the real response (and feel the discomfort) - otherwise you are just piling assumptions on top of assumptions. This is particularly relevent for enterprise or B2B startups - and a logical extension of Blank's 'get out of the building'.

So HTFU and just ask for money***. It will save you time. Do it soon. Do it yesterday.

** - that became part of surfcontrol - now websense
*** - yes, I was tempted....but decided to leave this is a jerry maguire free zone
**** -  I assume everyone belongs to the religion anyway so I won't rave on that.

pitching (thoughts for StartMate 2013 teams)

TL;DR

• pitching is a Darwinian skill. You need to be great to take the next step in company evolution. Otherwise greater chance of extinction.
• be prepared to lose 4+ hours/week to pitching
• don't assume that one team member (not you) will pitch
• pitching is a muscle you build
• you are pitching a company - not a product
• your business is not your product

---

One of the best things about being a StartMate advisor is the alumni mailing list. As opposed to skynet, it started self-aware (mostly) and continues to evolve its intelligence (at a less than exponential rate). 

Everyone on the lists gets smarter from the collective insights.

Last month - with the 2013 group selected, the alumni kicked-in with practical advice about matters of housing/accomodation and what the StartMate experience will be like. For example: great posts here from Chris and Jindou:
http://chrisrickard.github.com/ascii/startup-accelerator-braindump
http://www.jindoulee.com/i-got-in-the-final-20-for-startmate-help
(this tip is gold: "getting all the features done before Startmate commences!")

Meanwhile, behind the scenes, the alumni email list also started to crank away with tips and advice. A standout example: Stuart Argue from 2011's Grabble*** produced a great list of 24 points (which I won't leak), but here is one that I wanted to cover in this post:

"16. Keep refining your pitch deck when in pitch mode"

This is the main point of this post. You pitched pretty well to get into StartMate....but its not good enough. When you hit the US, you will be getting one shot to amaze potential investors - you want to make those few minutes count.

I can't guess how Niki will run the 2013 schedule, but its likely ALL Tuesday afternoons will be allocated for team pitching. Its an unspoken rule that ALL teams (and ALL team members) show up and support each other. Different mentors will come in each week and give feedback on pitches - generally diametrically opposite to the previous weeks advice :)

In StartMate 2011, we were too relaxed - we just had a quick update and elevator pitch.
In StartMate 2012, teams pitched every week their full pitch deck (5+minutes). Then got feedback.

The result is that teams of 2012 were far superior in understanding the business aspects of their company and preempting objections from potential investors. Just like hitting the gym; through repetition and feedback you build a muscle that technologists don't usually have. (StartMate is biased to selecting technologists).

An example of 2012

ScriptRock had a very specific valuable enterprise product but the team had no clue how to communicate the value to people outside their sector (most technologists start by describing features not benefits - then words like "awesome" and other purple farts*****). This was a major fail because NO INVESTORS will understand your business - nor can you educate them (bottom-up) in 3-8minutes.
So ScriptRock iterated a lot and got massively better. The "a-ha" moment was when Alan (coder) took the lead in pitching from Mike (hustler) - it had velocity, clarity, crispness and attitude.****
The important thing here is not WHAT evolved but that they listened, iterated and evolved. They weren't afraid to try new things and they developed pitching muscle.

EDIT 1:

Alan from Scriptrock let me know that point #8 in his own post is pretty relevent. Thanks Alan!

"Competition drives excellence"

Entrepreneurs are competitive, so when teams see others getting better and better (in a collegiate environment), friendly competition emerges. So the net result was some pretty funny creative theft of pitching ideas (more flames!) and all teams increased their skills.

Pitching ain't stealing time from coding

Its likely that some of you will resent losing 4+ hours weekly to pitching when there is so much pressure to work on your product. This is natural: the geeks and product guys think that the product will sell itself. The twisted logic in a coder's mind is like: "If I just sort out this UI issue, then we will have solved world hunger".  But:

Your business is not your product.
Your business is: product + recruit customers + make them pay.
Think about this - the best way to get across your business is by getting brutal feedback fast and often - so pitch weekly but also pitch people on the train and bus. Get used to describing the business in 20 words, 1minute etc. I'll do a separate post on selling pitches vs validation and "listen but don't obey".

Where to start

There's a bajillion pitches to view on the web and different approaches (e.g "tell a story", "problem/solution", "product/traction/team" etc) but just for simple discipline of knowing the answers to questions investors will ask, then Pollenizer's Universal Pitch Deck is a great start point.

Collegiate Environment

a quick side-note: By far the standout difference of 2012 (in comparison to 2011) was the collegiate environment created at ATP via the generosity of Hamish and Andrew (they are much cuter than their profile photos). ATP supported 2011 as well but for some** reason(s) the teams did not commit to the location and largely worked independently. Working together just seems to accelerate quality of all the teams - the value of easily sharing technical and business savvy is often underestimated.

** some lessons we learned are now part of the StartMate filtering process.
*** Anthony used this headwear for negotiations will WalMart.
**** I don't know how they pitched in the US. Recently I saw Mike pitch and he was even better :)
***** “purple farts”—adjectives that sound impressive but carry no substance. Guy Kawasaki