Posts Tagged: startup
Over the past few years, numerous innovations (Arduino, Raspberry Pi) have made it easier for anyone to develop hardware. Faster prototyping and cheaper manufacturing are empowering a new generation of hardware experts to gain hold in an industry once ruled by large corporations.
We are at the beginning of a new hardware revolution, and at Version One, we believe that platforms are key to accelerating this revolution by commoditizing and simplifying all the steps needed to take a product from prototype to mass production (Boris wrote about this topic earlier this year for GigaOm).
In the design phase, we believe that hardware engineering will follow a similar path as the open source software community that built GitHub. A platform that combines collaboration and data-sharing with a massive public repository and cloud-based design, is not only necessary as engineers continue to design more complex physical things, but it’s also inevitable.
That’s why we are thrilled to officially announce our investment in Toronto’s Upverter, a cloud-based platform for sharing hardware design. Specifically, Upverter is a collaborative schematic capture and printed circuit board layout platform that lives entirely in the cloud and is aimed at companies, hobbyists, students, and the open source hardware community.
A good analogy for Upverter is “GitHub for hardware,” as hundreds of thousands of hours of engineering design are stored in, worked on, and discoverable through Upverter making it easier for individuals and teams to design better hardware, faster. Intel, ARM, Oracle, Facebook, Quirky, and Texas Instruments are all on the platform.
Founded in 2010, Upverter is led by Zak Homuth, Michael Woodworth and Stephen Hamer, who met at the University of Waterloo and are also alumni of the Winter 2011 Y Combinator batch.
Version One is co-leading this investment with Golden Venture Partners, and joined by several angel investors. We are really excited to be a part of Upverter’s growth going forward as they help millions of makers, hardware engineers, and entrepreneurs launch their companies and fuel the radical innovations of tomorrow.
Start-up success typically boils down to three elements: hard work, talent, and luck. Yet when we dissect the successes and failures of other start-ups, we tend to focus on the hard work and talent of the team, completely disregarding the important role that luck (or the lack thereof) may have played.
Luck definitely played a huge role in my career, both on a company-level as well as a personal level. In the early days of AbeBooks, our company got lucky twice. Luck struck first when Barnes & Noble approached us to become a reseller of the books of our sellers. This immediately doubled revenues of our sellers and attracted more inventory to our site. And then luck came again, when Amazon bought our competitor Bibliofind and folded it into the main site. This led most sellers to leave Bibliofind and join AbeBooks.
I’m certain that without both of those events, AbeBooks would most likely never have become the uncontested market leader in the used books space. And while one could argue that our hard work and talent created the right environment for Barnes & Noble to approach us, I have no doubt that both scenarios could just as easily played out another way…completely altering the course of events.
And I also got lucky a few times on a personal level. Back in 2003, I felt like leaving AbeBooks and starting something new, but my parents convinced me to stay at the company. That proved to be the right decision, as most of the success of AbeBooks (including the ultimate exit to Amazon) came in the subsequent years and defined my career.
What’s the moral of these stories? Don’t underestimate the power of luck in shaping the future of your start-up. For some this may be unnerving…after all, luck may play such an important role, yet we cannot do anything about it. However, instead of worrying about luck or fate, focus on what you can control. Aim to create the right environment for luck and its opportunities to take hold.
For many startups, there comes a time when it becomes clear that things are not going exactly as you planned. You can read the writing on the wall that you haven’t found a product-market fit, and you’ve run out of ideas on how to get there.
Typically, if you don’t see signs of traction after six to nine months with a SaaS or e-commerce model, it’s time to reassess your market or model (note: a marketplace-based business often requires a longer time table). And if it’s time to pivot, I have one piece of advice: pivot hard.
Too often, I see pivoting startups try to keep too many elements of their original business. This is to be expected. After all, founders invest untold time and energy into building a product and team. It can be downright heartbreaking to feel like you’re throwing it all away.
However, once you’ve decided to pivot, it’s time to forget about your existing business and have laser-like focus on the new opportunity. Don’t let history cloud your thinking about your future business. It’s time to ask yourself the following questions:
1. What opportunities should I be pursuing independent of all the assets (product, customers, teams) already built-up from the current business model? Explore your new opportunity with a fresh set of eyes: if you were starting up today as a new founder, what would you want your new business and business model to be?
2. What should the new product look like independent of what’s already been built? Don’t try to derive a new product based on trying to salvage your current code base. First think about what you need for your new product, then (and only then) look at what code can be reused.
3. What should the future team look like? Consider what roles, skills, personalities, and expertise you’ll need for the new business model. All hiring decisions should be based on the positions you’re trying to fill now, rather than trying to piece together how your current team members can fit into the new venture.
4. What financing do I need to execute on the opportunity? It’s critical to take a realistic look at how much you’ll need for the new opportunity, rather than thinking of what money is available. Underfunded startups can’t and won’t execute and you shouldn’t move forward if you don’t have a plan for sufficient funding and a long enough runway.
Course changes happen all the time and can lead to brilliant things. But when pivoting, you need to completely separate your old and new businesses. Approach your pivot as if it were a completely new startup. Then see which pieces of your current setup (people, product, etc.) can potentially help you accelerate the new opportunity.
Over the course of my career, I have met, worked with, and/or invested in hundreds of entrepreneurs. During this time, I’ve seen some rise to the top, while others never quite made it past the starting line. While there may not be a sure-fire recipe to guarantee success as an entrepreneur, a clear profile of a successful startup leader has emerged for me over time.
Here are five key qualities that successful entrepreneurs typically have in common:
1. They have clarity of vision
Successful entrepreneurs can very precisely describe where the company is today, where it will be tomorrow, and how it will get there. This isn’t some robotic elevator pitch, but a natural and clear vision that’s typically very product-centric. Such clarity of purpose and vision helps these entrepreneurs attract employees, convince investors, and bring in partners more easily than others.
2. The startup is their life
The most successful entrepreneurs love working on their ventures; they can’t imagine doing anything else. These are the type of individuals who will respond to your emails at all hours of the night and can’t help but pitch their company to every single guest at a party. This level of passion is critical, since being an entrepreneur is hard, hard work. If you don’t love what you do, there’s no way you’ll last.
3. They stay focused on what matters
Entrepreneurs are typically visionaries, able to see new opportunities around every corner. While this personality trait is typically considered a strength, it comes at a price: staying focused is one of the toughest challenges for any entrepreneur. Thinking back on my own entrepreneurial career, I found myself too easily distracted by new opportunities. The result is that you find yourself thinking about bells and whistles instead of how to improve the core of the product.
In order to thrive as an entrepreneur, you can’t always chase after each new bright and shiny opportunity. Stay focused on just two to three key priorities at all times. Peter Thiel even takes this a step further and recommends only having one priority at a time. In any case, if you spread yourself or your company too thin, it’s difficult to gain any traction.
4. They surround themselves with great people
No one can be an expert in everything. The best entrepreneurs are acutely aware of their shortcomings and build an ecosystem of great people (including co-founders, employees, mentors, and investors) to fill in the holes. For example, a “big ideas” type needs to find somebody who can run the day-to-day and excels in building out operations. Or, a naturally introverted type may want to pair up with a co-founder who enjoys the limelight, pitches, and presentations. At my start-up, my co-founder Hannes and I had the perfect split of responsibilities: he liked finance, HR and legal while I thrived on marketing, sales, and product.
5. They pay close attention to detail
The most successful entrepreneurs I’ve seen don’t just limit their focus to big picture thinking. They care deeply about those little details that matter, particularly ones that impact the product, brand, customer experience, quality of the team and company culture. For example, I know founders who deliberate over the UI of web pages, who interview each new hire, who consider the details of the Holiday party and office design. These entrepreneurs are making decisions on the micro level that can have a profound impact on the macro.
Perhaps more importantly, these leaders are instilling careful attention to detail throughout their company. And this culture pays off as the company gains momentum and employees follow the CEO’s lead in getting the small stuff right every day.
Not every successful entrepreneur will excel in all five areas. For full disclosure, I’d rate myself 3 out of 5 as an entrepreneur. Yet while some people seem to possess a natural aptitude for these qualities, many of these traits can be learned. Don’t expect to develop any of these skills overnight, but keep them in mind throughout your own journey.
- 5 Common Traits Shared By Entrepreneurs (grasshopper.com)
- Cracking the Code: How Successful Entrepreneurs Build High-Growth Companies (growthology.org)
What do your board meetings look like? Do investors focus on their BlackBerries and iPhones while the CEO plods through every slide in the deck?
I’ve sat through (and run) more board meetings than I can remember. And the truth is, most board meetings aren’t as effective as they should be.
When it comes to board meetings, the single biggest blunder is focusing too much on reporting the past than discussing the future. All too often, board meetings accomplish little more than updating investors on what you’ve been working on. By the time the CEO has reached the last slide in the deck, two hours have elapsed and there’s little time for any meaningful, strategic discussion… the very thing that would benefit your company most.
The best board meetings feel more like working sessions. Think about it. Your board probably consists of some amazing individuals and talent. It’s your job to create a meeting framework that lets these individuals contribute to their maximum potential. Guy Kawasaki summed it up this way: “Most boards are under-utilized, not over-utilized.”
If you’re facing your first board meeting or are looking to get more out of your board meetings, here are a few things to consider:
Send out board materials in advance
When board members have a few days in advance to review the basics and important updates from your reporting period, you’ll free up time for valuable, future-focused discussions during the meeting itself. Note that sending documents at 2 AM the night before the meeting does not constitute “in advance.” Give members at least two, or ideally three days, to fit reviewing your material into their schedule.
In addition, never bury important details in a 50-page document. If there are any critical updates or information that your investors should know, make sure it’s highlighted in either the Executive Summary or the email body.
Make sure that board members read the materials beforehand
If you send your board pack well in advance, you should expect every board member to have read the material before the meeting. If your previous board meetings have traditionally rehashed the deck materials, your email should explain that this meeting will focus on discussing strategic issues and that members should have a grasp of the key issues beforehand in order to maximize the impact of the discussion.
Pick one or two strategic issues for each board meeting
Select one or two of the most pressing strategic issues facing your management team. For example, do you have questions about which international market to enter first? Or how to weigh priorities for what gets included at launch? Summarize these issues in the board materials (most likely in the email body) that you send out in advance, so that each board member arrives armed with ideas, opinions, and questions to drive the conversation forward right out of the gate.
Start the meeting by discussing these two issues. That way you’ll have plenty of time for an in-depth conversation that can help your team. Any questions on the reporting piece can be addressed at the end of the meeting or in one-on-one conversations with board members.
By structuring your board meetings this way you’ll get far more value out of the meeting, and your board, than if you spent 45 minutes fielding questions on a slide that outlined your business development activity for the past period. Your team will gain important insight and fresh thinking on how to move forward.
- All CEOs Should Be An Outside Director For One Company (feld.com)
- Rethinking Board Observers – The Role of the “Silent Observer” (bothsidesofthetable.com)