Brittany Walker | December 4th, 2013
It’s hard to feel #likeaboss this time a year when competing with Mr. Claus and Thanksgivukkah. How do you reward employees for their hard work on a startup budget? If you want to make your team feel appreciated this holiday season, look no further. Here are five awesome and affordable gift ideas that will ensure you get the ‘Worlds Best Boss’ mug under your tree.
1. Group Volunteer Day
Many non-profit organizations need help over the holidays. And let’s face it, at the end of a long year your team has earned a day away from the 27″ monitors. Ask your employees which philanthropic causes really matter to them and spend a day volunteering together. This is a win-win-win for a few reasons:
- The people you hire will appreciate your interest in their causes and getting to know them better. Plus, team bonding is uber agile.
- Supporting your local community is hugely important, and who knows, your company might even be recognized for it.
- This activity does not contribute to carpal tunnel syndrome.
This is inspired by Atlassian - they do this all year round!
2. Premium Music Subscriptions
How can your developers focus when obnoxious ads are constantly interrupting their ‘Wham! Christmas Hits’ online radio station? Increasing office productivity costs under $100 with Spotify Premium or Pandora One. With collaborative playlists you can give in to your seasonal guilty pleasures and blame it on the person next to you.
3. Exclusive Company Swag
There’s really nothing better than an ultra comfy set of noise canceling headphones. Am I right? These days you can get a great pair for a reasonable price. If you have enough time or cash, get your company logo printed on the ear buds. Your employees are the people who represent your brand proudly and thus deserve the most exclusive swag. Extra brownie points if they are delivered in 30 minutes by a drone.
4. Endless Caffeine Drip
A three-dollar-a-day caffeine habit can really set your finances back, especially at the rate hipsters are driving up no-foam-cappuccino prices. Investing in an office espresso machine will restore the sanity of your team.
Bonus: You’re more connected than you realize. Ask your team for a wish list of a few influencers they would love to have coffee with and organize it for them. You shouldn’t be the only one meeting cool people.
You’ll need one for the office’s highly anticipated Game of Thrones season premiere party. The only question is: will it be delivered by a dragon or a drone?
And finally, don’t be a grinch and schedule huge release dates on people’s vacation. Happy gifting!
Neha Palacherla | November 20th, 2013
This FounderTalk guest post is written by Scott Kleper, founder of Context Optional, which is now part of Adobe. He has started two companies, and has advised and invested in several more.
“You are making a major mistake,” said the prominent startup exec who was trying to convince us to give up on Context Optional and be “acqui-hired” by his well funded and highly praised startup. To be fair, it was something that we approached them with, when we were basically out of money and looking for a mercy killing. However, as our talks continued, our business started taking off. We had become experts in the then-burgeoning field of Social Marketing, and our services were highly sought after. Looking at our new revenue stream compared to their offer, we turned them down.
Prominent Startup Guy then proceeded to trash our business for its initial focus on revenue instead of building a product. The ultimate insult was thrown down. We had a nice “lifestyle business” but it would never be interesting to VCs. He told me that if I didn’t join a well-known startup by the time I was 30, I would never be successful. I was 31 at the time. Ouch.
A few days later, I had coffee with a friend – at the time, an up-and-coming VC. “That guy’s a jerk.” he said, “So what if you have a lifestyle business? That’s not a bad thing.” Now even my friends were trashing my business!
The Worst Possible Insult
As I drove home, I thought about why this label bothered me so much. At its surface, “lifestyle” makes it sound like you’ve got things pretty well figured out. But clearly, Prominent Startup Guy didn’t mean it as a compliment.
And why were we being labeled this way anyway? Was it because we weren’t taking a big enough risk? Because we weren’t following the Valley model of raising a bunch of money and getting huge before making money? Because we did work-for-hire? Was it simply because we had revenue?
None of those things have anything to do with a lifestyle, though. Those are characteristics of a consulting business. Though I denied it at the time (“We’re just doing consulting to figure out market needs before we build a product!”), we were a consulting business.
I didn’t feel like I had a particularly attractive lifestyle. At the time, I was spending all day answering emails, meeting with customers, and establishing our relationship with Facebook. I was spending all night coding, and occasionally taking a break to try to get my newborn son back to sleep. We oscillated between being flush with cash, and nearly out of business.
When people say “lifestyle business,” they have a certain picture in their mind. They probably picture you in a small back office tallying up sales and expenses by hand in a ledger. You pay yourself a modest salary and have modest children playing with modest toys in a modest house. You’re modestly happy, because you don’t have a boss but you still have enough money to get by. You’ll never be rich because nobody could sell such a business, but you’ll be content. And for a modest guy like you, that’s enough.
And that’s why it’s insulting. The implications of telling someone they run a lifestyle business are:
1) You won’t have a big win, and that’s okay, because you’re not the type of person who needs that sort of thing.
2) You won’t be working hard, and that’s okay, because you’re sustaining a life that works for you.
3) You’ll be happy all the time and spend quality time with your children, and that’s great because family is important.
“Lifestyle Businesses” Threaten the Silicon Valley Model
Entrepreneurship is about risk, and the perception is that if you’re building a business based on revenue, you aren’t taking a big enough risk. Startups are hit-driven. The notion of a small team building something new and crazy, making it huge, and changing the world is the norm. If there’s no clear path for that to happen, people don’t know what to do with you.
For a place that exists to “disrupt” entire industries, Silicon Valley can be a tough place to be “different.”
As our business developed, we eventually made good on our promise to use consulting as a way to learn about our customers and develop a product. Our competitors also got to pretty much the same place, but through a different (more capital intensive) path. We sold Context Optional to Efficient Frontier in 2011, and EF was soon acquired by Adobe.
The stigma still stuck with us, though. Potential investors always wanted to “better understand” all this revenue we had. And even long after we had sold the business, friends would still ask “How’s that consulting lifestyle business going?” Sigh.
Neha Palacherla | November 14th, 2013
This FounderTalk guest post is written by Yee Lee, VP Engineering at TaskRabbit. He is a 3-time founder, angel investor in over 20 companies, and a limited partner in 500 Startups.
The tech press and entrepreneurship blogs project a heroic image of startup founders — driven visionaries, technical geniuses, and sublime designers all cranking away with maximal efficiency to ship the right products, extracting brilliant market learnings and customer insights along the way. If you’re smart enough to read the market, hard-working and scrappy enough to outpace the competition, and execute flawlessly, then you’ll disrupt industries and change the world! Fame and riches await!
The “epic hero” vs. “village idiot” are pretty commonly-held extreme views of startup founders. Just about any self-aware person who’s been through the experience of founding a venture backed tech company will attest to feeling much more like a chihuahua in a tumble dryer than a captain of industry. At the highest level of the startup game — when you’ve got a great founding team, backing from experienced and helpful investors, and are executing like all get out — even when you’re playing the game at that level, luck and it’s close cousin, timing become the overriding determinants of success.
Dirty Little Secret
Let’s define “luck” for startups as: any events or actions that occur outside of the company’s control that have materially beneficial or harmful effects on the company. With that definition in mind, even if you bring your A-game and masterfully execute on all the things under your control, all that earns you is a lottery ticket.
An example of just how fickle luck can be:
At Katango in 2011, we were definitely bringing our A-game. Our founding team had three CS PhDs on it, including a full-tenured Stanford professor who lead the Stanford AI Lab — all of whom were true experts in graph analysis, pattern recognition, data clustering, and machine learning. We were backed by Facebook and Kleiner Perkins’ new S-Fund. And we had built a new social app that our initial beta users loved. They described our app as: “It’s magic!” and “It feels like the computer really knows me!”
Our tests were going great and we were fleshing out the service in anticipation of public launch. All of a sudden, we caught wind of Google’s new social network, Google+. It had a feature called “Circles” which sounded pretty much exactly like what Katango offered. We feared that Google were going to apply their vast datastores and incredible algorithmic power to building the best Circles of friends for everyone. Crap. Our new startup was being relegated to “feature of a bigger platform” status before we even had a chance to launch!
Google announced Google+ to huge national fanfare and it turns out the “Circles” feature was resoundingly panned by journalists for the excessive amount of dragging-and-dropping it took to create a Circle. Some of those same journalists tried out Katango the week after Google+ launched and gave our app rave reviews — they loved how quickly and easily Katango made perfect sets of friends for them. “Katango is what Google+ Circles should have been” was a quote we heard more than a few times.
Google’s announcement had started out looking like a looming disaster for us, but their announcement wound up focusing a lot of attention on the problem that Katango was working on. And that generated a lot more traffic for Katango than we could have garnered on our own. Ultimately, the company was acquired by Google at the end of 2011. Since then, team members from Katango have contributed to a wide range of Google products, ranging from G+ Circles (naturally), to Search, Hangouts, and Android.
What’s luck got to do with it?
Katango benefited from unpredictable events in the market but luck isn’t always so friendly…
I co-founded TipMobile in 2007, just a couple quarters before the real estate bubble burst. We cranked away on user acquisition and engagement, and were able to build a userbase of over 3 million monthly active users for our social communication apps. In the immediate aftermath of the housing collapse in early 2008, turns out VCs weren’t interested in propping up free services with lots of users and high burn rates. The advice we got was: “No one knows how long it will take for financial markets to recover, so you should focus on becoming profitable. Investors are looking at their reserve funds right now and they’re triaging their portfolios. The only companies getting further investment are the ones operating in the black.” Yikes.
We fought to control burn and generate revenue, but ultimately decided to dissolve the company after the founding team worked for more than quarter without any salary at all. We just didn’t have the personal funds to continue operating our servers. It was sad to see all the customer support emails asking “Hey, what happened to your app?” in the weeks after we turned off our AWS account.
In hindsight, we can only shake our heads. If we had just gotten started 6 months earlier, we probably would have been able to raise a round of financing before the market catastrophe struck and would have been able to survive through 2008. And if we had gotten started 6 months later, we also probably would have been fine because our seed round would have enabled us to keep the servers up until VC investments started to flow again after the US government enacted the financial bailout plan in Oct 2008. We saw lots of examples of SMS-related companies that were founded before and after us who made it through 2008, but we were just “unlucky” enough to have run out of runway right during the lowest point of 2008.
Marc Andreessen, an investor in TipMobile, summed up our situation this way: “There’s very little difference between being early, late, or just plain wrong.” While that may sound harsh, I think there is some wisdom encoded into that view of the world. Markets can be fickle, after all, and so if a market shifts on you and leaves your current product out of fit, then it’s your responsibility as an entrepreneur to adapt to the new conditions and tailor your company to survive in whatever environment you find yourself in.
In this view of entrepreneurship, you’re forever behind the ball, always looking over your shoulder, continuously re-examining market assumptions that you thought you could take for granted. “Only the paranoid survive”, right? It’s a heck of a way to live!
Make your own luck
If we’re going to play a game of chance as entrepreneurs, then we owe it to ourselves to constantly up our level of play.
After the bad-luck experience with TipMobile, I spent a lot of time becoming a better coder by building projects with friends in Ruby-on-Rails and Python & Django/Pylons. And I worked for Skype during their year of transition from an eBay-subsidiary to a private company. I learned a ton there about how to accelerate a product & engineering organization by helping to implement agile software development practices at a thousand-person organization.
I think that good-luck experiences create opportunities to double-down on investing in yourself. After Katango was acquired by Google, I spent a year there trying to meet every smart person who would take lunch with me. I jumped at the opportunity to travel to other Google offices and meet bright folks halfway around the world. And as I was expanding my network, I started angel investing more systematically in companies started by people in my 1st and 2nd-degree networks. I really cherish the connections I’ve been able to make with other entrepreneurs through investing. Getting a chance to talk with the founders as an investor and learn how they think through challenges has taught me a lot and given me many entrepreneurial role models to emulate in my own ventures.
“Ganbatte” and good luck!
Jessica Alter | November 6th, 2013
“There must be a ton of people from Google in the FounderDating Network,” an entrepreneur recently commented to me. “Ya, there are, but what makes you say that?” I responded. “Everyone knows people leave Google to start companies and Google is such an entrepreneurial place,” he said without hesitation.
That got me thinking, there are a lot of lists out there: “Great Places to Work” or “Most Innovative Companies”, but few have looked at how entrepreneurial the alumni networks of different companies actually are. We decided this would be super interesting to figure out. FounderDating is a curated network – people apply, we literally screen and reference everyone and then invite a sub-segment to join. Submitting an application means you have high entrepreneurial intent – either you have or you really want to start something. Using this as a key indicator of entrepreneurial intent, we crunched the data (over 100K data points). What we found may surprise you…
The Top 10 List
You can see the top 30 and get your company ranked here.
Surprises and Insights
The Top 3: IDEO, Bazaarvoice, Trilogy
They might not be the companies you immediately think of, but these alumni networks have a seriously high concentration of people with high entrepreneurial intent. It’s not all that surprising that after helping other companies be more innovative, you’d want to go start something that allows you to do the same. IDEOers have spawned great companies from Plum Organics to Mailbox.
What’s Trilogy you say? One alum described their network as “the Paypal mafia without as much money.” Alums have started companies like Zocdoc, MassRelevance, Capital Factory, H.Bloom and Bazaarvoice. And it seems that last one has come full circle.
Yahoo! > Google
Well, this was a little surprising to us as well. But even though people love to turn their nose at Yahoo! (YHOO) these days, don’t forget that for a very long time Yahoo! was an “it” place to work and had a very entrepreneurial vibe.
Sure there is something to be said for startups that hired quickly and have since needed some rightsizing (Zynga, Groupon, Livingsocial, etc.) showing up high on the list. But people who are feeling morale issues at a company or those that lose their jobs don’t necessarily need to go start something. It would be much simpler to just go get a different job. There is something to be said for hiring people that have a raw desire to do something entrepreneurial. Being fairly early at those companies might be an indicator.
McKinsey (Bain and BCG)
After thinking about this, it’s really not that surprising to find these and, quite frankly, other consulting firms near the top of the list. The largest percentage of their employee-base (entry-level) come in for 2-3 years as analysts with the understanding that they will likely leave and go do something else. Each year there is literally an exodus of people with talent and drive. Even if they go work for a fellow-alum for a few years, it’s not surprising that they want to try their hand at it.
Ones To Watch – Startups We Left Out
Because they are either still small or the data felt too preliminary, we excluded a few companies but would definitely keep put them on the “Ones to Watch List.” In no particular order they include:
- Gilt Groupe
There were a few interesting “non-companies” that we didn’t include in the final analyses because, well, they aren’t “companies” in the traditional sense. That said, both Teach for America core members and the Israeli Defense Force (IDF) are spawning alumni with high entrepreneurial intent. We know, everyone in Israel is part of the IDF, but not everyone lists it as a place they worked. Those that do are often part of elite units and may have a higher likelihood of doing something entrepreneurial. A caveat with Teach for America: we’ve done a partnership with TFA so this also affects the data. That said, we’re not the first to notice this about TFA alum. Their selection process, branding and 2 years and then move on system all contribute.
We looked at the overall size of a company’s employee alumni network in the last 16 years (so as not to have a bias against companies that have been around for a longer period of time) and the number of people who have applied to FounderDating who are currently or have ever worked at that company. To assuage any concerns there were over 100K data points and 70,000 companies. We then excluded: companies with under 500 employees and some startups (as mentioned above, where the data just feels too preliminary). Major (and some minor) acquisitions are included (e.g. eBay includes Paypal; Google includes Youtube, Motorola, Meebo, etc.)
- Yes, these are largely tech-focused companies
- Yes, it’s fairly N.America driven although anyone anywhere can apply to join and we have a healthy presence in the UK and Israel
- Yes, there are network effects – when one person from a company joins they pull in others
So it’s true (as my friend noted) that Xooglers have high entrepreneurial intent. But next time you meet entrepreneurs from Austin or Netflix or Yahoo! don’t be so surprised.
Check out the top 30 and get your company ranked and feel free to share your thoughts with us.
Special thanks to Ryan Jackson, Sean Murphy, John Le and Nick Pilkington for their help and guidance with this.
Neha Palacherla | October 29th, 2013
This guest post was written by Rick Marini, a serial entrepreneur in Silicon Valley for the past 14 years. He is currently the Founder and CEO of BranchOut and Talk.co. He is also an active advisor/investor in 25 private companies.
It’s a harder question than you might think. I speak with a lot of people who think they have the next big idea. They see guys like Kevin Systrom and his 12 employees at Instagram sell for $1 billion to Facebook. Seems easy, right? They see “overnight” successes like Twitter, Dropbox, Pinterest, Evernote and LinkedIn but often don’t realize that all those services took several years to gain traction. Those companies all fulfilled basic human needs (centered around communication and sharing) and leveraged technology to scale the hell out of it. So just identify a basic human need, add some cool technology and wait for the billion dollar offers to roll in, right? Not even close. The reality is start-ups are hard. Plain and simple. Caveat emptor.
But I have a good idea, right? And I can be first to market, right? This could be huge, right? I hear these questions (spoken more as definitive statements) a lot as I talk to young entrepreneurs that I may mentor, advise or invest in. I like to tell them “if you think you have an incredible, innovative idea, you should assume that 5 other entrepreneurs are already pursuing the same idea”. I realize that is not always the case but it’s probably more right than wrong. It helps to frame the bigger question that I pose to them next, “In the face of that potential competition, can you out-execute them and win the market?” This is when the conversation gets serious and I ask five hard questions.
1. Are you willing to quit your day job and do this full-time? Younger entrepreneurs have an easier time saying yes due to a lower personal cost structure (no house or kids) and lower compensation to walk away from. They’re more able to take risks and rebound quickly.
2. Can you recruit a team? You may be willing to leave your full-time job but you have to convince others to do the same and that is hard. Most start-ups have a co-founder pair or small team on day one. If you can’t convince at least a co-founding team of your vision and your ability to execute, then do not pass go, you can’t collect $200 yet.
3. Can you raise money? There are several potential funding sources including your own bank account (risky unless you have a nice cushion), friends & family (major pressure to preserve their capital and your relationships), angel investors (can you convince people who you don’t know to give you their personal money?) and VC’s (can you convince savvy professional investors that hear dozens of pitches a week that you deserve a big chunk of money?).
4. Can you execute? Even after you answer the first three questions, running a start-up is really hard. You need to coordinate a team to successfully work together. You need to have a product vision that fits a market need. You have to build a product that fulfills that need. Your product has to work – good design, UI, feature set, technology, etc. And then you get to launch it.
5. Can you get traction? Oh man, if you thought the first four items were hard (and they are!), this is the hardest one. There are countless examples of good products that never reached a point of meaningful traction. There are tons of reasons for that failure – bad market timing, highly competitive landscape, too small of a market, no PR, no virality, no funds for marketing, etc. Some of these reasons should have been identified before you got this far while others are out of your control. That sucks. You take huge risks to get this far, you raise money, you hire a team, you build a decent product… and then it just doesn’t take off. As most seasoned entrepreneurs and investors already know, that story plays out everyday.
After this point, it’s a matter of next steps. Do you stick with it and try to address the issues blocking your success? Do you pivot? Do you raise more money to keep going? Do you try to exit (or shut down)?
When I talk to (potential) entrepreneurs and walk them through this line of thinking, usually 2 things happen – 1) they get inspired or 2) they get nervous. I think both are 100% legitimate responses. I would never want to discourage someone from following their dream – I have huge respect for that. But the path to achieve that dream is often tougher than expected. I think every entrepreneur should do an honest assessment of this list and have a high level of comfort that then can make it. If the confidence level is not high, then take the time to assess if this is the right move. Entrepreneurs should be optimistic but realistic too.
Thousands of new business ideas are tossed around Silicon Valley and beyond every year. VC’s and angels know that most of these ideas won’t work or are not fundable. Yet every year, there is a new crop of hot start-ups pursuing big ideas that could change the world, and that is why I live and work in Silicon Valley. Despite the tough odds, we continue to follow the dream. It’s worth pursuing, both as an entrepreneur and an investor. I love building companies, advising start-ups and bettering the start-up ecosystem. This shit is hard, but there is nothing I’d rather do!
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