Wednesday 27 October 2010

Should VCs be entrepreneurs or not?

Old Car in MontevideoImage by AMWRanes via Flickr
To be honest, I don't know. I've been back and forth on the issue on various panels and I kind of cannot make up my mind. On one hand you want to have your investors to have on hands experience, however on the other hand, having to deal with someone who was successful in the past and forces you to do things in their way doesn't really help.

In the past I really looked up at the people who successfully built companies and wanted them to be close by. Over years I learned that this is the wrong criteria. Being successful in the past is not only a function of ability, there are a whole bunch of other factors as well. Some of them have nothing to do with their ability to be a good investor.

One of my best experiences with investors is with those who haven't built big and successful companies, but are rather humble in a way that they really work hard with the founder to built something big and meaningful. Even if they are investment superstars.

So I think it boils down to this: Investors that you want to work with are: intelligent, well connected and respectfully proactive.

You don't want to work with arrogant individuals that sit in shiny offices, come late to the meeting and never switch off their phones during conversation. You owe it to yourself and your business not to take this kind of nonsense.

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Monday 25 October 2010

Introducing DeckReport

It's been 6 months since I've started to work on a small new project called DeckReport. The idea is to create a solution that addresses a bunch of small but important challenges that burden most of startups, founders and investors alike - board management.

Board of directors are quite instrumental in strategic management of a startup. However the advantage comes at a price - time. Running a board is expensive and hard. Presentations, action items management, coordinating investors, sharing information and preparing analysis can easily take 2-3 days a month from the CEO and management.

That's where DeckReport comes in! It's a solution where you're able to post your board decks, share information and coordinate investors. if you're an investor, you'll be able to interact with all your investments from one account. So no more endless email exchanges and hunting down for the last versions of the deck. Everything in one place. Nice and tidy!

Check it out at and follow us on Twitter at @deckreport. We'll launch in private beta in November and go live in January 2011. Sign up for the beta account. 

Tuesday 19 October 2010

Board meeting introduction

Meetings are often held in conference roomsImage via Wikipedia
Each board meeting should start with three basic slides. They are the slides for a brief and quick introduction and they send a tone for the meeting and provide a framework for discussion while setting expectations:

- highlights: this is an overview of a top news from the past month or period, list the good and bad news, don't hide it. If you want to list it in two columns, color it differently, you can do whatever you want. But pick top 3 - 4 of each and list them on one single slide
- plans and challenges: list the plans and challenges that you expect in the next month. Nothing fancy, just a list of top 3 - 4 things that you expect to happen.
- KPI overview - dashboard: it's a kind of dashboard overview of key performance indicators. You should briefly walk through each of them since this is the stuff you agreed with your investors that you'll measure and track. It's one of the most important slides for you since it shows your performance against your past achievements.

Don't spend half of the board meeting on these, however a solid 5 -10 mins will make the whole difference at the meeting.
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Monday 18 October 2010

Tools of trade

I find it amazing how many tools foe entrepreneura on the internet are free and how available they are. I'm Mac biased, however I'm sure you can do the same thing with Wins or Linux. The point is on cloud based and online tools, not on the computer. Here is my list of tools I use, when I'm sketching out new projects/prototypes for internet services. 

Gmail and everything G: I host all of my mailing addresses there. Some say that Google is evil and that they don't want to have the Big gBrother checking their mail. Well they are many more ways how somebody could tap into your account than hacking Google abusing it. Unless you're from another planet, you've heard of google docs, forms and other stuff. It's useful and what I really like, it's good enough for me. Price: 0
gContacts and Isync: again Google, I have my addresses tagged and synced with my phone mac's address book and than it syncs through Isync (standard on mac) with my Nokia, works with everything else out there as well. iSync has a great feature that allows you to sync only those addresses with your phone that have have phone numbers, thus leaving all mailing lists alone. I use gContacts to generate lists who I should contact if i'm in NY, notify if I have something new or just update every 3 months. Checks gContacts tag feature, it's really powerful. Price: 0 
LinkedIn: I don't use Facebook, because I can't find a good use for it, but I definitely use LinkedIn. It's the source of of my business contacts and I use it frequently when I need to find someone close to my network. Price: 0
DropBox: the ultimate file syncing tool, I use it on my Mac, iPad, everywhere. It simply works. Price: 0
iWeb and Google Sites: iWeb is limited to Mac but I use it to generate prototypes for web sites and even production ready web sites. If I need any kind of interaction, like subscriptions or order forms, I simply use gForms. I don't care if it looks slightly lame. It's good enough for low traffic, reliable and it works. Google Sites works well as well, I don't use it, however it's perfect for any kind of site generation/hosting that is occasional in nature and it's aimed at sited that convey information and not interact with users a lot. Price: 0
Skype: talk, talk, talk, for free
gChat: yeah I know, again Google. It's free, widely used and it works 
TechMeMe: the fastest way to learn about important stuff, I'm not fan about browsing through a lot of web sites, I even don't follow TechCrunch. I know I should, but I don't. If something really important happened somewhere I'll stumble over it. It's very unlikely that I'll fail in a business opportunity if I don't read all the blogs. 
Twitter: I use it as an alert tool for my followers and friends. I'm not a heavy user, and I don't use it to gather information. I use it more to stay in touch with companies I'm interested in, rarely with people. Don't DM me, because it's likely that I won't read it for several days. 
EverNote: not ideal, but the most useful way to sync your text files all over. Price:0 or a few dollars if you want to have an offline ability on Ipad

Monday 11 October 2010

What is a startup?

I've heard many definitions about what startup is. Particularly in blogs and tech comunities, startups are becoming synonimous with internet companies. Interestingly, Wikipedia offers a perfect answer: startup is a company with no history!

So how come that the startup concept is so vibrant in the tech community? Because in order for any company to succeed, it needs capital, team and partners. All this is difficult to obtain if you have no history. That's why tech startups came up with inovative ways to obtain those resources.

A significant factor in the story is also the fact that IT and internet advances simplified the way we do business. In fact you need a computer and an internet connection, a few hundred dollars and you're ready to roll, world wide! That's profoundly different to local mill, backery or local delivery business. They all need significant capital investment and when you're there, your set for many years, either your run with it, or you close. In software world that's much easiser.

Given the facts it's interesting to see how tech startups are sometimes rigid and how their investors don't get the difference. It's actually harmful to a startup to demand long term plans as if it was a traditional business.  It locks them in and limits their flexibility and ability to leverage one advantage they have: cost effectivness. I think we need a new model.  

Wednesday 6 October 2010

Working long hours

Image representing Information Architects as d...Image via CrunchBase
I've recently came across an interesting quote:

"There are exceptions, but we believe that working over hours as a habit leads to bad work."

It's a quote from the About page of Information Architects, one of the leading design firms. They go even further than that:

  • We don’t do free pitches.
  • We don’t work on weekends.
  • We don’t work crazy long hours.
  • We don’t finish presentations five minutes before the deadline.

It actually reflects perfectly how I feel about doing things. Not surprisingly they are a studio with a strong European background. And yet they achieve world class results. 

I actually don't think I should add anything to this!   

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Monday 4 October 2010

Why European startups perform differently

Sheena IyengarImage via Wikipedia
European founders too often try to mimic their American counterparts. They hire American advisors, have American investors and yet somehow often European startups don't perform as one would expect. I could never rationalise this until I watched very interesting TED talk by Sheena Iyengar.

The idea is that our culture simply makes a huge difference how we perform in different situations. Sheena talks about an interesting experiment that she and here team did with a bunch of kids. Here is a simplified version of it (watch the video, absolutely worth it!):

Researchers asked a a group of American and Asian kids to solve some anagrams. Anagrams were grouped into six themed batches. Some kids got to choose the batches they want to solve and others were told which ones to solve by an authority (a teacher or mother). And than something interesting happened. American kids solved twice as much anagrams when they were able to choose which ones they want to solve, while Asian kids performed exactly the opposite. When they got a chance to choose a batch they performance went down the drain, but they over performed their American friends when they where told which ones to solve. Interesting isn't it?

Now apply this to a startup. Americans absolutely shine when they have more options or when they can come up with new ones, while non Americans might simply execute the ones they have better and go into depth more.

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Friday 1 October 2010

Who should do the talking at the board meetings

I recently came across an interesting idea about board meetings. Basically, board meetings are a tool that CEO has at his disposal to communicate with investors and other board members. However quite often it's a fairly strict relationship. CEO does the presentation, board members intervene and comment in between and that's about it. I've done it, it's ok, but not great.

However one important aspect of managing the board is to open up the company to the board members.

And one of he best ways is to invite some of the team members from time to time do a presentation on particular subject.  So I'm convinced now that the rule of thumb of who does the talking at the board should be:

CEO: 20%, team members: 40%, board members: 40%

It will benefit the CEO since it will elevate the level of trust the board has in to the CEO. It will change the dynamics of the board and increase the engagement of the team members.

It's best to rotate presentations of the team members, so that on each board meeting, one or two team members do a presentation on the current state and future of various topics like product, marketing and other (depending on their area of expertise). It's actually quite easy to open 30 or 45 mins of time for team presentations and discussions. The topics need to be discussed anyway, why not just include the ones who have most hand's on experience with them.