Virtual Fundraising

A number of the entrepreneurs I work with are in the middle of fundraising during this crazy pandemic. It’s unclear when we’ll ever be able to meet in person again, let alone travel to venture fund offices for live pitches. Therefore, most are pitching virtually via Zoom or other mediums. A common theme throughout their process has been the lack of face time with potential investors. Investors are expressing it’s hard to write a term sheet or know what it’s like to work with someone they’ve never met in person. It’s reasonable to think that an entrepreneur can accept that they’ll have to wait to meet the investor in person once it’s safe to move about the country again; they need liquidity and are quite used to making sacrifices to forge ahead. However, investors are less desperate and it increasingly unclear if the “I can’t write you a term sheet if I never met you in person” is valid or just another excuse to bow out of a deal.

This got me to thinking about the perspective of each in these times:

The In-Person Pitch

Consider what an entrepreneur worries about when fundraising in person:

  • Travel logistics: In addition to the cost of a flight and hotel expenses, if I can’t crash on a friend’s couch, I’ll be in SF for 48 hours and have to lock in meetings along Sandhill Road, ideally, back to back and with enough gaps to get from one to the next. OR…. Should I take the subway and risk ruining my professional look if there’s no AC or rack up ride-share fees that my startup just can’t afford right now?
  • I’m on their turf: Not knowing what to expect in the conference room, AV, who’ll be there and how they’ll perceive me as I am escorted through the office. Who’s watching, what physical attributes are they looking for, etc.
  • Who attends: We can’t swing all co-founders on the road financially or being out of the office for full days to pitch or for diligence. We have to keep the business moving!

There is certainly upside for entrepreneurs to get in-person face time with their future investors, but there’s not much downside for the investor to do in-person meetings.

Virtual Pitches

Alternatively, the opportunities virtual pitches present to entrepreneurs include:

  • Schedule flexibility — Let me know what works for you! No travel necessary.
  • Cost savings — No flights, hotels or ride-share fees. No hit to the bottom line!
  • My turf — I’m in my personal space, representing who I am and feeling comfortable in my own chair. No one is scanning how I walk or what I’m wearing. I am authentically me!
  • My team — Need to chat with my CTO? She can jump on a video call whenever you’re free. Want to walk through our financials? My finance leader is happy to screen share our pro-forma to review with you.

From an investor perspective, one could imagine that the schedule logistics are the biggest plus for virtual pitches. But there are also some clear potential downsides of virtual pitches for both parties — many related to basic remote work challenges highlighted here, but I’ll call out a few:

  • Attention span — will both parties be fully engaged or distracted by other screen activity? (although I have seen many VCs looking a their laptops/cell phones more than engaging with entrepreneurs in a boardroom pitching right in front of them)
  • Eye contact — it’s hard enough to make eye contact in person let alone tracking gaze awareness and looking for social cues. There is no opportunity to catch a side glance or reaction from one party to the other. The post-meeting debrief won’t include observations like “did you notice when we shared our financial projections that they all looked at each other like ‘WOW’?” or when two partners notice body language between co-founders that suggest they may not be aligned on the company’s go-to-market strategy.
  • Cognitive load — not only does constantly looking at yourself while you are presenting create a lot of emotional pressure, but trying hard to track all of the social cues in 2D can be exhausting for all parties and could cloud the focus of the discussion.
  • Informal connections — the post-meeting socializing one often experiences is completely lost. The casual walk out of the conference room, chat at the coffee area or even the bio break that may lead an entrepreneur and investor to be washing their hands at the same time. Each of those situations are opportunities to form informal connections that don’t happen in the boardroom. You find out you have kids the same age or that you both like the same brand of lipstick. Your college roommate is in their soccer league or you both prefer oat milk over soy milk. While these are minor details, they make these connections more personal and build trust in what may become an important working relationship.

Optimizing For Our Current Normal

We won’t likely be going back into boardrooms for pitches any time soon, so herewith some suggestions to ensure the virtual-only rounds have a better chance of success:

  • Turn off your self-view and expand your screen to just video so you are fully engaged. Put aside your phone and resist texting with your co-founder/partners during the call. You wouldn’t do that in the boardroom (would you?!), so don’t do it on video.
  • For both sides, focus on facial reactions and body language (like leaning back or arm folding). Pause when you think “I really want to text my colleague to get their reaction to what’s going on right now” and consider how to incorporate that into the conversation. For entrepreneurs, this may be saying “Pat, I noticed you looked surprised when I mentioned we have large traction with such a unique audience. Would you like me to explain that further?” Or, “Sam, you seemed taken aback when we shared our unit economics. I have a backup slide with more detail if you’d like to dig into it.”. For Investors, it could be “Tyler, I noticed a long pause when I asked you about your engineering team. I am happy to discuss that further after this call if it’s a longer conversation or you’d like your CTO to be part of the discussion.” [Note: All of these examples could happen in person too, but may be done with more intention when on a video call.]
  • If the pitch is an hour or less, consider tacking on 10–15 minutes post-meeting to allow for more informal conversations. If it’s a longer, diligence or full partner meeting, consider scheduling a mid-point break for the entrepreneur to do a breakout with partners/team members they haven’t met yet. Or schedule these less formal chats as short meetings that follow the main event. Be explicit that these are more personal connections (“tell me more about YOU”) and not for deeper business dives. Yes, it’s more time on the calendar, but that’s the time the entrepreneur may have used to travel to your office or that you used to drive to the office or walk from your office to the board room.
  • Create opportunities for reference checking — Investors, make intros to other entrepreneurs in your portfolio who can share what it’s been like to work with your team after the money was wired. Entrepreneurs, make intros to customers, angel investors, mentors or others who can speak to who you are beyond your business. [NOTE: It’s no secret that backchannel references will happen on both sides, regardless, but being proactive about this is always a good thing!]
  • For entrepreneurs with physical products vs. software that’s easy to demo online, send prototypes or latest products in-market to investors in advance. Allow them to see and feel your product! You’d likely have brought it with you if you were in person, so why not send in advance? If you have limited supplies, ask the investor to send it back post-pitch. Any decent investor should be trustworthy enough to do that…on their dime…even if no term sheet comes of it.

Finally, investors, stop using lack of face time as a reason not to invest. Your investment theses are still valid whether you meet a founder in person or not and pattern matching can still happen on video. Trust your instincts and consider how incredible these humans are to be able to run and scale their businesses even during a pandemic with most if not all virtual teams. They are resilient and determined not to be thwarted by fully remote work environments. The strong survive and prosper, and so will you!

Do you have other tips to enhance the virtual pitch process for entrepreneurs and/or investors? Please add in the comments!

Overhauling Higher Education For Today’s World

University Nevada Reno (UNR) Living Learning Community (visual concept)

Around seven years ago, I had an epiphany that the delivery of higher education would change dramatically. This was triggered by the fact that we had shifted our hiring game in the tech community from caring about pedigree (MIT, Stanford, etc.) to “tell me what you have actually done”. While pedigree demonstrates academic aptitude, it does not speak to a candidate’s ability to execute. Now more than ever, especially in a time when building is going to be what stimulates the economy, those who can execute will excel.

My vision seven years ago (which still stands) is the disruption of higher education as we know it today. Instead of high school students aspiring to get into their top choice college or university and moving on campus for a singular experience, we will move towards a model where young people want to leave home, further their learning, but care less about the brand of institution(s) they attend, or even getting a degree, and care more about their ability to learn what they need to be productive in society. Parents will care less about brand and the degree too, but will want their kids to have a solid, post-secondary, education in a safe environment. College age students (18–22’ish) want to be with likeminded peers who are either focused on similar academic interests or they want a diverse community to expose them to other areas they may not otherwise know about. I loved living in a dorm at UMASS Amherst with peers pursuing all sorts of topics I knew nothing about. I still attribute my interest in marketing to having a roommate that was a marketing major while I was an art major.

Now that most colleges and universities are forced to teach online, and the cost of higher education is through the roof, we are primed to change the shape of post-secondary education. I believe young people in the next 3–5 years will want to move out of their homes (and their parents will be eager for them to do the same), to a city of interest and pursue further education by joining live-in learning communities vs. applying to a specific college.

The model would look something like this:

  • Live-in learning communities will be developed in popular college cities (Boston, NY, SF, Austin, etc. — perhaps eventually abroad as well). These will be dorm-like buildings with high bandwidth on-line learning capabilities like high-tech video rooms, Jamboards, and amenities such as gyms and community kitchens. There will be Resident Assistants and administrators to oversee safety concerns of parents and establish behavioral norms. There will likely be some sort of student-run government, clubs and special programming depending on the live-in learning community.
  • Qualified, remote educators will offer courses similar to how HBX delivers online experiences today (below) or simply via Zoom with smaller groups.

  • Prospective students will apply to live in these communities based on city of interest, peer group and other criteria (amenities, special programming, etc.). Applications will focus on diversity, inclusion and ability for students to contribute to the learning community vs. SAT/ACT scores and high school accomplishments. All applicants will be peer reviewed and cost will be commensurate with ability to pay. In a utopian world (one can dream), the government would subsidize these programs.
  • Live-in learning communities will provide cross-university, curricula based on skills development. For example, a computer science program may be a series of courses offered from not just local universities, but online courses from across the country. Certifications or hours of learning may replace degree programs. A foundational curriculum of core competencies such as public speaking, project management and financial skills will be woven into every program.
  • Most important, live-in learning community curricula will be focused on experiential learning. Most if not all courses will be project-based — some individual and many team oriented so students are developing real-world experiences that also demonstrate their ability to execute.
  • Study groups may form or be required in each live-in learning community or on-line. New opportunities for social connections and networking will be within and between learning communities.
  • Completion of programs may be based on committee reviews and a PhD-theses-like defense. Alumni communities will be fostered post-completion of any program.
  • Prospective employers will recruit from these live-in learning communities. Students’ inherent training to work remotely will be an asset to the growing number of companies establishing remote workforces. The foundational skills development would be seen as a key differentiator of these programs.
  • This will of course require current colleges and universities to partner with whomever creates these live-in learning communities. The question is when, not if, these partnerships will form. For many universities, this will ensure their survival and could enhance vs. dilute their brand.

While there will still be some professions, like doctors and lawyers, that may still need the discipline of a more rigid degree program, I can imagine many students (and parents) taking advantage of the ideas above. Perhaps there are entrepreneurs out there already developing this idea. If so, send them my way…I’d love to support their efforts! …and if you have other ideas about this concept, let’s riff.

The Current Normal

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Our Current Normal, Amelia Austin

A year ago, I was adjusting to moving out of Massachusetts for the first time in my life. I became a full time New Yorker and loving it. I had moved into an empty-nester apartment with an open floor plan. Other than the guest bathroom, my bedroom is the only private space, with a Murphy bed in the living area for occasional visits of my daughters and friends. The NYC startup community was thriving. I have many old and new friends here in the city and countless former students working and starting their own businesses scattered across Manhattan and Brooklyn. In the past year, between teaching in Boston once a week and conducting my coaching practice, my “new normal” was an endless stream of breakfasts, coffees, lunches, dinners, drinks…book signings, shows, galleries, music… It was the dynamic and stimulating environment I craved. As my good friend Bethany noted almost exactly a year ago in her own reflections about leaving Philly for NYC, it wasn’t that I didn’t love Boston (it had been my home my whole life, after all), it was that I wanted more.

[insert sound of car screeching to a halt, here]

My last in-person class at HBS was on March 9. My youngest daughter, Eliza, a senior in high school, had been sitting in on my course all semester as part of her Senior Capstone project (she’s building an app). It was a joy to see her once a week in my classroom as she is a boarding school student and other than weekends when she’d visit NYC or our college tours together, our weekly dinners in the Spangler cafeteria after class were a welcome opportunity to connect. I cherished those intimate times together before she headed off to college, when we discussed what she learned in my course, how her app development was coming along, college applications, her part time job and life in general. On that last day on campus, we ate together and then headed to South Station. It was her spring break and, because of the pending doom of Covid19, a class trip to Amsterdam had been canceled so she decided to hang out in NYC with me and the many friends from summer camp that she knows in the city. We thought nothing of it to have a couple of her high school friends come along for a few days too. Looking back, it’s funny to think about the anxiety we had of the four of us in my apartment for a few days. It would be tight, but we’d make it work.

Amid all of this, my elderly mother was showing signs of decline. The day before Thanksgiving, she had a fall. Falls are not uncommon for an 88 year-old with limited mobility and several health issues, but this fall resulted in breaking her ankle and finding out she had two serious cardiovascular blockages. Two stents later, she was shipped off to a rehab center to recover from the stent procedures and start PT for her ankle. Sadly, mom was not a fan of PT (“the exercise repetitions are so BORING”) and she didn’t appreciate that she had to commit to the physical work if she were to ever return to her apartment in an Assisted Living (AL) facility in Cambridge, MA. Weeks turned into months and mom continued to decline both physically and mentally; she had lost interest in eating (an early sign of dementia) and as a result, her energy was waning and her body was starting to atrophy. All the while, the pandemic was becoming real and we were worried for the possibility we might not be able to visit with her if things got worse. The last time I had seen her was March 2nd – a quick visit to the rehab center before class that day – and she seemed to understand that she was declining, but I’m not sure she fully understood death was near.

Meanwhile, my middle daughter, Amelia, was on a ship on the South Pacific sea off the coast of New Zealand. A Junior in college, her semester at sea program ended March 23 and her plan was to backpack with friends in NZ for a few weeks once the program wrapped up. The same week my youngest was making the most of NYC with friends as it began the pausing process with local shops and restaurants starting to limit hours or closing altogether, Amelia’s program was cut short and we were scrambling to get her back safely (and virus free) before she ended up stuck in NZ indefinitely. So many swift decisions to make – from where she should make safe connections (SF was optimal) to whether she’d be better off in NYC,  Boston with her dad or with my oldest daughter, Abigail, who normally lives in NYC but is temporarily based in Portland, OR for a film project (currently on hold). We decided NYC was Amelia’s best bet so she could at least be with me and her younger sister and close to her friends in NYC. Looking back, we still had no idea how severely life would change for us or how drastically NYC would be hit by Covid19.

Eliza’s friends got back to Boston before things started to get uglier here in NYC and Amelia arrived safely here a week later. There was a mild panic in my home towards the end of that week when it sounded like NYC was totally shutting down. The girls could have gone to Boston, where their dad had more space for them in his home, but we didn’t know whether they were asymptomatic carriers, potentially exposing their father to Covid19. He was caring for his elderly, immunocompromised, parents and the risk was very high. I was also deeply worried about being completely alone. I had moved to this city alone because it gave me so much outside my doors that it didn’t matter. However, the prospect of being totally alone (other than my elderly Maine Coon cat, Edgar), scared the crap out of me. What if I got sick? What if they got sick and I couldn’t care for them? No personal connections for weeks? I just couldn’t bear it. I’ve never been clinically depressed, but I thought about how being alone indefinitely could trigger something like that; never mind the anxiety of fearing for my children’s health. Undoubtably, with so many sheltered alone in place, a major side effect of Covid19 will be depression, anxiety, suicide and accidental death. This is a traumatic moment in time for many and I will be forever grateful my girls stayed here in NYC with me.

So, here we are. I’m referring to this time as our “current normal” because we don’t really know what life will be like day to day or month to month. We’ve adapted to a life of unpredictability; accepting that each day is what we make of it and what lies ahead is truly unknown with minimal structure. Amelia and Eliza are doing two-week rotations between the Murphy bed and the couch. Weekdays are somewhat defined by Eliza starting online high school classes around 8am and I’m on Zoom with coaching clients, students and my work colleagues. Both girls have started to go running along the Hudson river each afternoon; doing their best to socially distance, donning gloves and keeping a scarf handy. I am keeping up with yoga via my favorite studio‘s live and on-demand classes. We are cooking together a LOT which we haven’t done for years. I’m breaking out old favorite recipes and teaching my girls cooking skills. Amelia, our resident artist, is creating new works almost every day – collages, drawings (this blog’s heading pic is hers), and evening hours are filled with music, an occasional cleaning party, binge watching several different TV series and slowly making progress on an epic, 3000 piece puzzle. While Edgar the cat is delighted to have constant snuggle time, he’s exhausted by all the activity that comes with us being home all day. We’re very happy he’s here with us though.

The current normal means that at any time, things will change and we’ll just deal with it. This week, it was mom’s passing. We knew it was near, but hadn’t considered how it would feel to not be able to be with her in the end, to sit with her as her body shut down, to be graveside to say our goodbyes or grieve together as a family. My three, globally distributed, siblings and I had a complicated relationship with our mother and mine was especially difficult with long periods of estrangement, anger and pain. She was my mother though and I was so sad for how she had to leave this world – totally alone. She never left the rehab center. In her last two weeks, PPE was required for visitors and none of her local relatives felt comfortable going there. Her caregivers were kind to her and I am confident she was comfortable at the end. Her funeral involved a brief, live streamed graveside service conducted by a rabbi who knew our mother. Her nieces and a nephew attended – abiding by the five-person maximum allowed at the grave site and all standing ten feet apart. My siblings, our children and a few cousins, watched the live stream together on Zoom. It was surreal and I still don’t feel closure because it was more like watching a reality TV show than my mother’s funeral. Since we never had the habit of talking routinely – she had a hard time hearing on the phone and never became a cell/text user- it’s still hard to believe she’s gone.

Moms_Funeral_CovidThis week, we conducted virtual Shiva sessions with family and friends via Zoom. We prayed and we told stories of mom with a focus on her best self – when she was funny, supported us and how she served as a feminist role model. It still doesn’t feel real for me though. It also feels strange after the past year of a very high-touch relationship with my much older siblings navigating mom’s care, making arrangements, lamenting over her lack of progress in rehab, that we no longer have that forcing function to pull us together. We had been chatting daily on WhatsApp. My sister and I calling each other almost daily to strategize about mom’s care and finances while also discussing how she impacted our lives – for better and for worse. It’s been an intense time. That was our current normal and will somewhat return once we are allowed back in her AL facility to clear out her things – an event that may not be until this fall or even winter given the vulnerability of the community with whom she lived.

We broke the Shiva this week to celebrate Passover. Abigail, three hours behind us, was preparing her own seder feast as we did our abridged “30-minute seder” here in NYC. I found a local butcher who scored me a perfect, small, brisket for three and a shank bone. Amelia waited in line for an hour at Trader Joe’s only to be rushed by their staff to grab matzoh, apples for charoset and other much needed sundries and get out of the store as fast as possible. We left the massive puzzle in tact on the dining room table, carefully placing a computer atop scattered puzzle pieces at the center so Abigail had a view of our tiny spread. We were supposed to be in Portland with her this week – celebrating with dear friends who were kind enough to drop off “Passover in a box” for her earlier that day. I am so jealous she had home made matzoh balls for her chicken soup! We made it work. It wasn’t quite the same, but I was with my girls and we are healthy and safe and that, frankly, is all that matters right now.

My biggest take aways from this current normal is to lean into life as it is today and appreciate this time with my children in the moment. While a planner by nature, these times have shifted my mindset to accepting whatever happens as it happens. I truly believe “this too shall pass”, but I have no idea what the future holds…and I am ok with that. I am absolutely sure life will not go back to the new normal I had adjusted to in NYC. Some of my favorite haunts will not survive, new ones will appear. We will start connecting with friends again, but perhaps with more caution and preparedness. The markets will suffer, but eventually recover. My children will go on with their lives, but we will have new memories together of the time we were forced to live in a period of complete unknowns – grateful we had each other and our health during this time. We will say goodbye together as a family to my mother, likely at her Yahrzeit a year from now. We will embrace life with a new lens – appreciating the moment like never before and being grateful for what we have vs. what we’ve lost.

Each night at 7pm in NYC we hear the loud clammer of residents far and near. They are shouting out their windows, banging pots and pans, and celebrating the countless medical professionals and service people supporting the US epicenter of Covid19. This is the city I moved to; not thwarted by disaster. We’ve been here before during 9/11. We stand together, we will get through it. It’s our current normal.

Testing Leadership During Trying Times

The stress created by the global spread of the Coronavirus is an opportune time to take stock of how leaders, well….lead. Now more than ever, employees are looking to their leadership teams for strength, guidance and direction. Some leaders may have already had led their teams through storms — perhaps financial, operational, or otherwise — and are tapping into what they learned prior. However, many are leading through a storm for the first time and are being tested.

In the early days of Akamai circa 1999, ~200 of us were learning how to run what was then called the world wide web and manage a newly public company. Many of us were learning how to lead at scale and at an extreme pace with little-to-no experience. One of our founders was an academic, one a business school student and the other a computer scientist. The C-suite included seasoned leadership from outside the company, but it was the founders who were setting the tone for leadership across the organization — especially the computer scientist (Danny Lewin, RIP) who regularly tapped into his military background as an officer in the Israeli Defense Forces. He could be abrasive at times, barking out orders and demanding our attention to mastery, but he was smart as f-ck and his passion for the company was infectious, so we obeyed and tolerated his occasional tirades.

Before 9/11, the company was undergoing tremendous scale challenges while the internet bubble was showing signs of an impending burst. Danny knew we were all feeling the strain and one day decided an inspirational message was in order to rally the troops. The company was distributed across the globe — in the time before Zoom or Hangouts. So, he wrote a long email to the entire company about leadership that today most of us who were leading at that time can summarize in three main points:

To inspire trust: Lead by Example

To build trust among teammates: Suffer Together

To restore trust when it weakens: Hold People Accountable

When September 11, 2001 hit us hard both personally and as a business, most of us had never managed teams through a crisis. So, when the world was in crisis (and we lost Danny on the first plane that hit the towers), the points he made about leadership were absolutely brought to light. We did our best to lead by example, we suffered together and we held ourselves and each other accountable. The trust built among our teams was like no other I had experienced and many of those young leaders — some of my dearest friends — are now master leaders of teams and companies; quite surely in part from what we all experienced together in 2001.

With the world in crisis today, leaders should consider Danny’s advice.

  • Lead by Example: If you tell people to self-isolate and work from home, then you too should work from home. If you are restricting travel for employees, abide by those same restrictions. If team members are clueless about how to work effectively from home, demonstrate how it’s done or appoint experienced employees as mentors to guide the newbs. If you expect people to communicate clearly and often, do the same. During times of confusion and ambiguity, leaders are the guiding light — even if the only thing you can say is “I don’t know”. Being vulnerable and not having all the answers can be as powerful as having a perfect plan. It also allows others to do the same.
  • Suffer Together: Now more than ever is when teams need empathy; that you’re in this together. Employees are not just worried about personal illness; they are worried about their family, trips they have planned in the future, their personal finances and how business will fare during a volatile time. No one will be unscathed from this current crisis. You are all suffering together. Create forums for people to talk with each other, offer support and listen. Even if many people in your organization do not get sick or have ill family members, they are dealing with a crisis that is very real. The news and social media is in their faces and they will not ignore it. Accept this and share your own worries and concerns. Show your vulnerabilities and they will do the same. From my 9/11 experience, I can say that crying with co-workers was one of the most transformational moments in my career. No matter our differences, we had a shared experience that strengthened ties and allowed us to rise to the challenge and succeed.
  • Hold People Accountable: Times of crisis are when leaders show their true colors. Great business leaders during tough times are decisive and put the company, their employees, their customers and investors ahead of themselves. They are not seeking friends or trying to win a popularity contest and may make unfavorable decisions. Decisions like closing the office, cancelling a conference or back-burnering projects to accommodate business disruptions are not consensus building exercises. Decide and move forward. Once those tough calls are made, communicate very clearly who is accountable to execute on next steps. Set clear expectations on how everyone is expected to move forward; including communication protocols (cadence, timing and audience). Employees want leaders who can make calls — especially during tough times — even if they don’t like the decision.

If you are old-hat at dealing with times of crisis, reach out to the less experienced leaders in your network and offer a hand. If you are a first-timer, seek counsel from mentors, coaches and peers. You don’t need to figure this all out on your own. This is not time for heroics. Great leaders get help. We’ll get through this, just like we have in the past, and we’ll be ready for the next one. Be safe, lead…and wash your hands!

A Pandemic’s Impact on Remote Work

covid19With the COVID-19 virus continuing to spread, there is a potential for many teams and whole companies to have to quickly shift gears from working in HQs and globally distributed offices to working from home. This will impact the operations of both the companies handling this rapid scale in remote work and companies unaccustomed to a remote work culture. It will also impact personal and family life at a broader scale; creating new demand for services and products that cater to at-home workers.

  • Remote-friendly software tools like ZoomSlackHangouts, etc. must not only ensure their products can function at scale with lumpy spikes in both adoption and usage, but should also ensure their teams can handle the stress on the company — from sales and user onboarding to customer support and billing. Teams need to prepare for growth they’ve never experienced. This is a chance for these companies to shine, but they could also easily implode (for anyone buying up their stock!).
  • If a company has not had a remote-friendly culture to-date, the shift will a big change — and could be sudden without time to prepare. HR and operations teams should start to get up to speed on trends and best practices for remote work, stat. This article has a great list of reads on the topic. Share with your managers and start talking about how you might operate if you have to shift to remote work for an extended period of time.
  • Assuming the dust settles and we will get past this impending pandemic, once you’ve opened the door to adopting a remote work culture, it may be hard to go back. My prediction is that there will be a higher demand for more remote-friendly software solutions, more workers looking for remote roles, more need for co-working spaces outside of urban settings and a lot of empty space in large office parks and urban towers.
  • In terms of personal and family lives, I could imagine even more demand for home delivery services, build-out of home offices and demand for in-home care givers. Those who have not traditionally worked from home will quickly realize that it’s not as simple as sitting at your laptop on your couch for the day. The new remote workforce will need private spaces away from family and life’s distractions (laundry, dishes, the dog!) in order to focus. They’ll need alternatives to daycare and possibly even need work spaces for children who cannot attend their schools for some period of time.

While there’s no need to panic (yet), it’s prudent to think about how the potential for a pandemic will impact our work and family life — beyond the worst possibility of ourselves and our loved ones actually getting the disease. Until then, be safe, get the facts straight, prepare for possibilities and PLEASE, if you are sick, stay home!

Self-Awareness & Asking For Help Are Super Powers!

What’s the difference between having an Advisor, external coach, internal coach, and/or therapist? Should I join a Peer support group? I get asked these questions a lot. The good news is that usually when I am asked this question, it’s because someone knows they need help. With so many options these days, it’s hard to know which to choose or how best to leverage each, or whether adopting a combination of any or all make sense.

My perspective on the many ways to get help…

  • Advisor: Most advisors are domain experts or experienced operators in a particular area (product, marketing, sales, finance, etc.). They are commonly called upon when domain-specific guidance is needed, to make introductions to customers, prospective partners or job candidates. Advisors may also mentor junior members of a team when you lack the funds or time to hire in an experienced leader. Advisors are usually given equity for their contributions, commensurate with their experience and the time they commit to the company. Some advisors work ad hoc as needed, others are more prescriptive with set number of hours per week/month that they are available for consultation. In some cases, advisors are involved so much that it warrants a mix of equity and consulting fees. My heuristic for these types of engagements are to assess whether they are performing a part-time role you’d otherwise fill with a full time employee (FTE) if you could find/afford them. These engagements should be time-boxed and outcomes measured as you would do for any FTE.

    I recommend nailing down expectations prior to any equity grant and using a template like the FAST agreement to solidify an advisor relationship. Most startups have at least 2–3 advisors filling in complementary areas, sometimes many more, but be cautious about too many overlapping interests or people who seek to be an advisor too early before you’ve established a rapport and figured out how they can be helpful. There are a lot of bad actors out there just looking for free equity.

  • External Coach: External coaches are objectively focused on professional (and often personal) growth. They work within the context you bring them. The best coaches guide individuals towards finding their own solutions using tools and frameworks they’ve developed themselves and/or learned from professional training. “A central tenet of coaching is a faith in your client’s inherent wisdom. Good coaching is about revealing their truth, not yours.” (Tarikh Korula) You should expect to commit a minimum of 2–3 hours per month with a coach and many offer email/text touch-points between a regular cadence of sessions. If properly trained and experienced, external coaches can be pricey ($400–$600/hour, sometimes more!), but if the chemistry is strong it can be a partnership that’s well worth the money and time. My dear friend Steve Schlafman has great advice here on how to find the right fit with a potential coach.
  • Internal Coach: Internal coaches (sometimes called “Talent Development”) usually have the same skills/training as external coaches and are hired to develop executives, managers and occasionally individual contributors. They are a marvelous add to any team, but remember that they are employees and therefore have inherent bias as part of the inner workings of the organization. Internal coaches are accountable towards the overall success of the business vs. to an individual and may not always be objective — especially given that they know the players and may be coaching them as well. If you are hiring an internal coach(es), be thoughtful on who they will work with and how to measure their success vis-a-vis employees’ growth. Success metrics can be everything from basic employee retention numbers to frequency of/average time to promotions, employee satisfaction surveys and external recognition as leaders and contributors. Learn more about how internal coaching and talent and development is evolving inside organizations here.
  • Therapists: What used to be stigmatized, is now considered almost a right of passage for most entrepreneurs and leaders dealing with the stress of scaling their companies and balancing life’s demands. Therapists are medical professionals with extensive training who focus on an individual’s psychological, emotional and physical wellbeing. Most therapists lack business context or domain expertise, but may have some insights and empathy from other clients with whom they work. Therapists are wholly objective, can be very expensive, but also extremely worth it if you are under a lot of stress at work and/or at home. If you can afford it or have insurance to cover, I recommend being proactive and engaging a therapist even if everything seems “OK”. Establishing a relationship and providing historical context ahead of any stressors or crises will prepare both you and your therapist if those events arise.
  • Peer Support Groups: The ultimate in gaining empathetic support is being a part of a tight knit group of people going through the same types of challenges you are facing. I highly recommend finding a small, like-minded, group of peers to connect with on at least a monthly cadence. The group is ideally made up of a minimum of six (for breadth) but no more than eight individuals to encourage intimate conversations. They should be from a diverse set companies with varying personal backgrounds to allow for different perspectives and to avoid any awkward competitive conversations — although there should be an inherent “cone of silence” among the group. There may be some areas of commonality like all are at roughly the same stage in their careers, stage of company (e.g., pre-series A or post-IPO), or stage of life. Often, these groups are facilitated by a professional coach or peer mentors who ensure that conversations are meaningful and everyone has a voice. Reboot.io has a great program for CEOs as does the Inc. CEO ProjectYPO, etc. but there are also niche peer groups like VPE Forum that specializes in engineering leaders. It may take some time to find the right group, so be patient. You’ll know when you’ve found your people!

All of the above resources are valuable for anyone in an organization, not just to founders and executives. It is a sign of strength when I meet a leader who taps into each one to develop a healthy, well-balanced, support system. More and more CEOs and leaders are recognizing how critical this support is to their personal and professional growth. Being self-aware and asking for help is a super power, and no time is too soon to get started!

Time, Talent & Treasure

Bootcamp 2020

Bootcamp 2020 students, Faculty & TAs

I am a former Trustee, alumna, parent, donor and longtime community member of a non-profit organization that’s mission is “changing lives for good” through the the community’s gifts of time, talent and treasure. As a hundred-plus year old organization with a diverse group of alumni, staff and trustees, we strive for our community to give beyond dollars (treasure) and to pay it forward with their time and talents. This mission is something I deeply believe in beyond this particular non-profit and extends into my personal and professional life; and it’s something I value and look for in the people I work with. 

If you follow me on Twitter, you know we just wrapped up an eight day Startup Bootcamp at Harvard Business School (HBS). This program was brought to life four years ago by my mentor and friend, Professor Tom Eisenmann who recognized a growing need for our first year MBA students to explore their startup ideas and understand the world of entrepreneurship through experiential learning. First year HBS students enroll in a prescribed curriculum known as their Required Course year, and these students are referred to as “RCs”. RCs wanting to start companies, learn about joining startups and/or venture capital have limited time outside of classes and other school-related activities to pursue these interests in their first year. The advent of Startup Bootcamp created that time and programming to explore before their second (“Elective Course”) year. Approximately 200 students take time out of their January break to return to Boston to immerse themselves in startup land. Startup Bootcamp is free to enrolled students and is seen as a Pass/Fail course on their transcripts.

Those who know HBS, know our primary teaching approach is via the case method. This is an excellent way to help our students understand the complexities and challenges of business through the lens of a diverse set of protagonists and companies around the world. Many of our course sessions for each of the hundreds of cases our students read invite the protagonists into the classroom to discuss their perspective and “what happened after the case” with our students. This time with these leaders is invaluable to students and often the leaders get as much out of the experience as they impart their wisdom and share lessons learned.

In the past few decades we have introduced more field courses to complement the case method with a learn-by-doing approach. Like our live case discussion with protagonists, the HBS field courses tap into some of the top entrepreneurs and industry experts in the world. Startup Bootcamp is no exception! In order to pull off an intense eight days of programming, we drew in over 70 guests throughout the week. These guests did everything from keynote talks and serving on panels to offering hours of coaching time and workshops. Each guest donated their valuable time, treasure (many paying their own way to travel from all over the US) and immeasurable talent to be part of this program. Our students were blown away with the level of high quality content each guest provided and all were so grateful for every ounce of insight they received on their ideas, their teams and their future as entrepreneurs, joiners of startups and members of the venture capital community.

Screen Shot 2020-01-25 at 4.27.54 PM

Tagging over seventy people is well above the maximum limit for most social media platforms, so herewith, a hearty THANK YOU to all of the guests who joined us last week. We absolutely could not have done it without you!

Gil Addo
Gideon Ansell
Henry Ancona
Berlynn Bai
Jay Batson
Eliza Becton
Edward Berk
Ethan Bernstein
Peter Bleyleben
Jana Boruta
Jeff Bussgang
Bobbie Carlton
David Chang
Chuck Collins
Maggie Crowley
Karen Devine
Brian Doll
Richard Dulude
Doug Fox
Dave Gerhardt
Jodi Gernon
Shikhar Ghosh
Rob Go
Jamie Goldstein
Samara Gordon
Sean Grundy
Rohit Gupta
Christian Heim
Jason Hines
Sarah Hodges
David Hornik
Alex Iskold
Jennifer Jordan
Howard Kaplan
Stella Kim
Melody Koh
Brendan Kohler
Tarikh Korula
Karen Korula-Young
Jeremy Kriegel
Pascal Kriesche
Elizabeth Lawler
Sarah Leary
Elise Lelon
Rebecca Liebman
Jennifer Lum
Nate Maslak
Bob Mason
Devon McDonald
Bob Moesta
Jennifer Neundorfer
Eric Paley
Andrew Payne
Melissa Perri
Mark Pincus
Amira Pollack
James Psota
Vinayak Ranade
Christina Raymond
Jeffrey Rayport
Caty Rea
Carlos Reines
Laura Rippy
Mark Roberge
Bryce Roberts
Brendan Schwartz
Javier Segovia
Shereen Shermak
Caroline Sherman
Nancy Tao Go
Satish Tadikonda
Jill Ward
Christina Wing
Peggy Yu

Finally, it takes a village to pull off such an intense program that took months and many hours of planning and an average of twelve hours a day over eight straight days to orchestrate. Hats off to my co-instructors, Allison Mnookin and Martin Sinozich for being great collaborators, to Jacey Taft and Sneha Pham for their tireless support throughout many twists and turns and to our outstanding Teaching Assistants – now second year MBA students and Bootcamp alumni – Gaby Goldstein, Jad Esber & Ollie Osunkunle. Best team ever!

Interested in learning more? Listen to what our students and faculty have said about the program in this video and check out our Instagram page!

 

Product Discovery 101

As an entrepreneur, how confident are you that you fully understand your customer’s pain points and/or job to be done? When I first meet an entrepreneur, they tend to start selling me on their solution before explaining the problem they are trying to solve. I typically see or hear little evidence that they’ve done true discovery work to validate the problem or their target customers. While gut feel or personal experience with the problem can be a strong signal there’s a problem to solve, without proper product discovery work, you won’t truly know if you have a winning solution.

For those that profess they have done proper discovery work and have validated the problem, but don’t yet have a product, my follow-on question is “How do you know people or companies will use your product?”. More often than not, I get examples of interest tests such as hits on social media posts or answers to surveys that are so biased it’s hard to trust the results. Further, they may have a good hunch there’s a job to be done that needs improving/replacing, but they cannot describe where in the customer journey they can truly make an impact.

I’m a big fan of confident founders who are passionate about their idea, but a little humility and a lot of discovery work can determine whether there’s a winning solution and save a lot of time and money wasted on building the wrong thing. If fundraising is also a consideration, being able to have real data vs. gut feelings and biased test results can be the difference between a modest angel round and a strongly led seed- or A-round.

To that end, a few tips…

Interest vs. Problem Testing

“We had 1000 clicks on our Facebook ad in the first 48 hours”,
“Our conversion rate from click to sign-up was 50%”, OR
“We interviewed a bunch of people and they said they’d use our product if we built it”

When I hear these types of quotes early on in a product’s lifecycle, I do a mental facepalm. These quotes suggest they may have found an audience interested enough to click on an ad and to give their email addresses, but they still have not proven anything about the actual usefulness of their product or that it solves a real pain point for their target customer that they are willing to pay for to fix. These tests are OK to do, but should not be the only way you validate problems to solve. If you plan to do interest tests, consider these approaches:

  • Social Media: Great for finding your audience, should be done on multiple platforms and carefully crafted so as to answer only 1–2 hypotheses. These hypotheses are commonly “Is this where our audience is if we want to market to them at some point?” and “Are they interested enough to click and learn more”. These tests can be expensive so be thoughtful about where and when to do them (e.g., if you’re building a product for teens, test on Instagram or Snapchat where they are (vs. Facebook)
  • Landing Pages: The best way to capture interest, email and demographic data. If they found you through social media tests or googling,
    a) you’ve proven they were interested enough to learn more,
    b) that your SEO works and they found you; and/or
    c) that they trust you or care enough about the problem you wish to solve that they will give you insight into who they are.
    These future customers are great targets for problem testing and could be your early adopters. Be careful though, early adopters are great for testing, but don’t always guarantee a chasm-crossing to the mainstream. This too must be validated.
  • Surveys: Surveys are very hard to do right and often capture a lot of random and very subjective information instead of getting real data to inform your product. We have this tendency to think “while we have them, let’s ask them everything!”. Great surveys are:
    • Ten questions or less,
    • reflective in nature (Ex: how many times did you buy “X” in the last month?) and very data-centric (Ex: how often do you order takeout for dinner?). Reflective questions should have ranges to choose from that do not sway the prospect or suggest there’s a right answer; and
    • capture basic demographic information only relevant to the questions at hand (e.g., don’t ask age or gender or income unless that’s specifically something you need to know about your audience); as long as you have contact information, you can always follow up for more demographic data if needed.

More important than interest tests early on, are tests that validate there is a problem worth solving and where exactly a product can be most successful in solving that problem. Validating hypotheses about the problem through a variety of methods is going to lead to a far better outcome than clicks on a Facebook ad. The more ways you can learn about your target customer and discover where the problems are, the more likely you’ll get on the right path to solution building. This process takes multiple iterations and approaches to get to a minimum viable product (MVP) that begins to address the issue.

Consider trying these different types of problem validation tests in your discovery process:

  • Interviews: Similar to surveys, interviews are as much an art as they are science. It is incredibly easy to lead a witness, bias answers and hear what we want to hear in an interview. The best guide for conducting a proper discovery interview is Rob Fitzpatrick’s book “The Mom Test”, which I encourage every entrepreneur and product manager I work with to read. A few key takeaways:
    • PRIORITY: Talk with strangers! Any interview subject who is a friend, family member or member of an affinity group (e.g., student/alumni at your school), you bias the conversation. They are more likely to tell you what you want to hear and validate your idea vs. truly objective answers. If you’re not comfortable talking with strangers, don’t interview or hire an independent consultant/friend to do it for you.
    • Write a script and be clear about what hypotheses you are trying to validate before the interview. Sticking to a script ensures a clean comparison of results after interviews.
    • Start by setting the stage. You are learning from them vs. selling them on your idea, no answer is a wrong one and set a time expectation — 30–45 minutes are ideal. Always end by thanking them, asking if you can follow up AND if there’s anyone else they suggest you speak with about the topic.
    • Always ask open ended questions — Ex, tell me the last time you…
    • Always have someone serve as observer & notetaker not just to capture what’s being said, but to look for body language, expressions and any other “tells” about the problem you are trying to learn about.
    • Do more listening than talking — you’re there to learn from them, not sell to them.
    • Unsure what they were explaining or want to reframe their response into hard data? Echo it back and see where that leads them. Ex: “So what you said is, you usually eat out twice a week?”.
    • Always record the session — most interviewees will not mind being audio or video recorded (the latter is better), especially if you assure them it won’t be shared outside of your team.
  • Ethnography: Observing prospects performing the job you hope to improve/replace can be extremely insightful. You may see hacks they would never tell you about in an interview or discover there’s a whole new set of problems in their process that you had no idea existed.
  • Emotional journaling or mapping: Having a prospect journal or map out their process and highlight how they feel along the way can pin-point exactly where they are most frustrated in their process. This is also a great technique if you cannot observe the prospect in the setting where the problem exists. Ask them to journal or map and send you something within a set period of time.
  • Journey mapping: Bringing together all your discovery work to identify where you found patterns of highs and lows. These may surprise you; often where we hypothesized there was the most pain in a process may be somewhere completely different.
  • (Don’t do) Focus Groups: I am generally not a fan of this form of discovery. It lends itself to group think and can lead to false results. Focus groups can be useful later in the product cycle when you want to get reactions to branding or observe groups of people using your product if it’s a tangible item.

Prototype Testing
The best way to validate a problem exists is to actually insert yourself into the process and learn by doing. These tests lean towards solution building, but the idea is you’re doing tests without building anything or building very little to get clarity on the problem and the customer. The most common forms of these tests are:

  • Lo-Fidelity Concierge Testing: Jump right in and assume part of the role that your product might fill in the future. If you were coming up with a new restaurant reservation system, this may involve a phone conversation with the party needing a reservation and having you do the actual booking for them and perhaps texting them to confirm their reservation. By being the intermediary, you are fully embedded in the process to understand all sides of the problem. The key to success of these early tests is to resist the temptation to correct your customer or other players and just go with whatever they do to experience the process. You can tweak things as you learn more about what works and what doesn’t work along the way.
  • Wizard of Oz (WoZ) Testing: Unlike a concierge test which is transparent and prospective customers are aware you are part of the solution, a WoZ test allows you to intervene without a customer knowing you’re doing work behind the scenes. This is usually created by having a prototype of some sort that the user interfaces with, but involves manual labor that users don’t see. For example, In the early days of Uber, a dispatch team was used to direct drivers to pick up customers and text customers about arrival times before they had complex algorithms and a driver app.
  • Physical Prototypes or Competitive analogs: If you are building something non-digital that could be expensive to manufacture before you test, there are several creative ways to do discovery early on.
  • Prototypes: Small runs of your future product or handcrafted using freelancers to do 3D printing, sewing or even a pop-up restaurant are ways to get your idea concept tested and feedback on its use before spending too much money. One of my favorite examples of these is a former student’s idea for a smoothie making machine for offices. Before he even made the machine, he started making smoothies in offices just to see what employees liked, how visual aids helped (having fresh fruit nearby inferring a fresh product) or offering add-ins like chia seeds or protein powder to see if they made his smoothies more appealing. Not only did he learn what flavors were most popular to focus his MVP, but he also got a lot of insight into the operations of small to medium sized businesses, how much of a footprint he’d need for machines, maintenance requirements, etc. It was an invaluable experience for this entrepreneur.

Smoodi team testing mix-ins with their early prototypes

  • Competitive analogs: Having target customers use other, similar, products can be as telling as using the product you hope to create. Using a tool like UserTesting to have a prospect walk through their use of a current competitive product can be very insightful. Having target customers use a competitive product for a week or two can also be insightful. Just be careful not to start creating your product based on what these other products have/don’t have. The goal is to understand how these prospects interact with those products today — it’s not to get feature parity.
  • Expert Testing: Sometimes, you are working in an area where you may not be an expert, but you have a hunch it’s a white space ripe for disruption. If you don’t have access to the experts or their customers, find or create a space for them to connect and observe through their experiences. This could be as simple as finding them on Quora or Reddit and looking at threads of questions that are related to what you’re exploring. You could create a forum for them to chat if none exists (e.g., an affinity group Slack workspace or Meetup) or even create an event to gather the right people. Another one of my former students got her start with ElektraLabs by creating an event which not only informed much of the early product, but also connected her with experts who went on to both advise her company and evangelize her product.

A Few More Best Practices
All of the above tests should be explored whenever you are in the process of validating problems and target customers. Try many and do them often. Testing never stops! Here are a few more things to consider when designing your tests:

  • Eliminate Bias: I can’t emphasize enough how important it is to have as objective a test as possible. This means not asking your friends, co-workers or parents to participate. Find total strangers who can give you honest and authentic feedback.
  • The Rule of 5: If you keep your criteria very tight — who you are asking and very specific things you are testing — you need not do more than five tests before you know where you are trending. But limit your variables per test (see next bullet).
  • Limiting Variables: The Rule of 5 only works if every test you do is limited to a couple of key questions you want answered. The more variables in a test, the harder it will be to discern what influenced an outcome. For example, if you are trying to test whether women ages 18–20 vs. women 30–35 have a problem finding a great yoga class, design a test that is the same in every way, just test it with five of each of these two different audiences. Similarly, limit variables in prototype tests such as in the smoothie test noted above, where when the founder tested add-ins at one particular site, that was the only variable he changed; all other aspects of the test remained the same including the site itself.
  • Breadth of Demographics: You may be designing a product that you believe everyone in the world will need OR that you believe only one target audience needs. Gender, income level, geography, etc. may or may not have an impact on adoption but you won’t know that until you parse things out early on and test a few. How a 13 year-old uses a product may be completely different than a 45 year-old (Facebook is a great example of this). Also, if you don’t test different demographics, you may miss an audience that could be in most need of your product.
  • Measured Outcomes: Start with a hypothesis of what will happen per test, ideally in measurable outcomes such as % of people who accept a restaurant recommendation or number of smoothie customers who want an add-in vs. those who do not. Decide what you think success looks like for these tests. If your outcomes vary, then consider whether your test was valid and/or whether the learning lends itself to further testing or abandonment of an idea. In the case of the smoothie, the founder hypothesized that his target customer would want 5–6 flavor combinations, but found only 2–3 flavor combinations were most popular, thus he limited the flavor options in his MVP.
  • Leverage Existing Technology: Finally, in today’s highly tech enabled world there are a number of ways to engage your target customers using what’s already out there to your advantage before building anything yourself:
    • Typeforms, google forms, etc. can capture form data
    • Online payments can be simulated using Venmo
    • Texting can simulate alerts and notifications
    • High fidelity web prototypes from Figma, Sketch, Invision, etc.
    • 3D printed mockups & scrappy hand crafted prototypes made from supplies you can buy online

Another former student of mine with a software engineering background resisted the temptation to code a solution and instead created a WoZ test by cobbling together Soundcloud, Dropbox, texting and a high-fidelity mock front-end. Once she had experienced dozens of people using this method and understood what they needed, she officially built and launched the product.

Test Early, Test Often!
With all the options available, there is no excuse for weak validation of problems and target customers early on in your product development process. One test or even a few tests does not qualify a product as marketable or fundable. The more objective tests you do up front, and iterate on those tests often, the higher likelihood you’ll land on a great solution that people want to use and buy.

This blog post is largely inspired by my course, PM101 at Harvard Business School. We focus the most of the semester on best practices for discovery. I have open-sourced the syllabus for this course here.

MBA, Accelerator Or Just Go For It?

You’re in your mid-to-late 20’s and your thinking about being a first time entrepreneur. Maybe you already have an idea for a solution to a problem that needs solving or perhaps you just know in your bones that the entrepreneurial journey is your destiny. You’re probably in your first or second job after undergrad and feeling like now’s the time to figure out how to make the most of this “prime time” in your life – this is the tail end of your defining decade. Perhaps this is the right time, before you have family or other life commitments; or maybe because you feel if you wait too long, you’ll never do it. 

Regardless of where you are in life, if you’re feeling like you are at a cross roads in the early part of your entrepreneurial journey, you probably fit into one of these categories:

Screen Shot 2019-07-23 at 2.44.18 PMI see aspiring entrepreneurs approach these categories in a few ways: Learning as they start their companies, enrolling in an MBA or certificate program and/or applying to a startup accelerator. Some also choose to join an early stage company while they noodle their idea(s) so they can see how others do it and learn from their successes and failures before they strike out on their own. There are pros and cons to each approach and each is a highly personal decision based on your risk threshold, what you’re building, and who you are as a human being. There is no “right” way to do it, but here are a few ways to think about each approach, noting that sometimes doing more than one can be the best formula. 

On the Job (OTJ)

I am a big proponent of experiential learning. Touch a hot flame, you know not to do that again. Take an active listening role face to face with a customer and you’ll learn more about their needs and how you can solve them vs. running a survey or doing passive research on-line. However, some might argue that OTJ learning is a “two steps forward, one step back” approach as you’ll make a lot of mistakes along the way. Some mistakes will be recoverable, but some may be life threatening to your business and almost none of these mistakes can be predicted. Many of the most successful startups got that way because of luck and timing or because they had made/raised enough money to dig themselves out of a hole or two until they got it right.

OTJ_Poll

Questions to ask yourself if you are thinking about this approach:

  • What is your pain tolerance in terms of how far you can stretch your money, lifestyle and idea? Your about to get on a roller-coaster. Do you think you can handle it? Are you ready to hear “no” a lot and live off of ramen noodles and pizza indefinitely?
  • Do you have a strong network of mentors, coaches, advisors, investors and friends to get advice (and potential capital) from? Do you know how to get that advice/money and will you take it or not?
  • How easily do you make decisions? Will the noise of endless advice, competition, differing opinions from employees/co-founders/investors thwart your progress?
  • Are you a good salesperson? Can you recruit talent, fundraise and acquire customers?
  • Do you understand the product development process for your idea? Have you fully explored the problem to be solved, who you’re solving it for and the potential solutions? Do you think you have an MVP that will get you off the ground as you work towards product market fit? How confident are you that there’s an addressable market worthy of you/your co-founder and/or investors taking a risk of time and money on this idea?
  • Are you as in love with the problem you want to solve and passionate about the possible solution as you are in love with being a leader/CEO? Where is your ego in this process? Starting a company is one of the most humbling experiences you’ll ever have – it’ll touch your insides in ways you never thought it could. Are you ready for that?

If a few of the above points give you pause, either figure out how to resolve them before forging ahead, or consider some of the other options below.

Applying To An Accelerator

I’m a big fan of well structured accelerators with strong reputations for developing entrepreneurs and their products (e.g., Y-Combinator (YC) or TechStars). The programming is usually very solid and the results are almost always positive – companies are typically much further along with their business plans and messaging by their usual culminating event, “Demo Day”. Fundraising is also a big part of an accelerator program and the better ones have a pretty strong network of investors eager to fund each cohort. That said, in my recent Twitter poll, 50% of the respondents said that the network was the top benefit. I’ve seen this firsthand from my years of experience as a mentor with TechStars. Whether it’s needing help with introductions, getting advice on business strategy, building products or even just a shoulder to cry on, these networks have proven to be invaluable for entrepreneurs who’ve gotten into a quality program.

accelerators

There are many accelerators out there. In addition big brand names like YC or TechStars, there are a myriad of others that range from niche areas (biotech, robotics, healthcare, fintech…) to city-specific, to those that cater to underserved populations, etc. The list is endless! Here’s how to think about applying to accelerators:

  • Figure out which accelerators are a fit for your idea/company and what you want to get out of their program. It’s no different than applying to college – everything from where you want to live to who you’ll hang out with 24×7 counts in the decision process.
  • Make sure your idea/company is far along enough to apply. I often see founders trying to apply way too early and while it can be a good experience just to go through the process, it’s a big time waster for you, your company and for the accelerator who is evaluating your application if you are not at the right stage.
  • Talk to alumni from programs you’re considering. Find out about their application process and any lessons learned (things they think they nailed, what was the program worth it to them, tips on how to get the most out of the program, etc.)
  • Understand program expectations while you’re running your business. Many founders who get into the more intense programs don’t appreciate how hard it is to keep the momentum of their business while going through the program. It’s like having two full time jobs!
  • If you are definitely applying to a program, line up your references in advance and try to get warm intros to the Managing Directors (MD) of the program. Warm intros are worth a lot in all parts of business, accelerators included. Also, you may find that a warm intro can serve you well if your timing was out of sync with the accelerator’s application process. Sometimes. a company drops out of a program last minute, just before the start date, and a warm connection with the MD could be the fast track to fill that open spot (several companies I’ve worked with have been accepted into programs because of this situation).
  • Apply to more than one and know that some may push you to another location of theirs or class depending on where you are in the process, stage of your company, other cohort needs, etc.
  • If you don’t get into a program, either decide if the time to apply was worth it (maybe it forced you to learn more about you, tune the story of your business or products?) and try again, or move on and keep on trying to accelerate your business on your own.

Getting Your MBA

There are countless reasons one should or should not get an MBA, all of which I will not cover here, but if you are thinking about how to learn about entrepreneurship or further your business, it can be a great way to go. Of course, in most cases it is very expensive and yes, it’s ~2 years “checked out” of the real world, but in the right type of program, it can be a great solution.

DISCLAIMER: I am on the faculty at Harvard Business School, but I try to be unbiased here and cover more general aspects of MBA programs with an entrepreneurial focus. Also, full disclosure: I enrolled in a dual MS/MBA program early in my career and in the end I only completed the MS as I found that particular program adequately met my career needs. I was also self-funded, and in debt from undergraduate school; despite some scholarship money, the added debt was untenable. Most B-schools now have great financial aid and fellowship programs (50% of our HBS students get fellowships), but MBAs are still not for everyone!

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Considerations for whether to apply to an MBA program with an entrepreneurial focus:

  • Cost – can you afford both your time and money?
  • Do you have an idea/company already in process that you want to move forward? How will the particular program help you do that? Are there specific courses for your stage of business, industry or problem you’re trying to solve? Are there faculty, peer mentors or other on-campus experts available to students starting businesses? Is there time during the program to actually work on you company (e.g., experiential courses where you build your business for credit, summer programming, etc.)
  • Do you want to be somewhere where you can find an idea and/or a co-founder? Are the programs you’re looking at known for incubating new ideas and/or fostering co-founder relationships?
  • Are you unsure if you want to be a founder, but would at least like to become a joiner to learn more about startups? Do the programs you’re evaluating offer opportunities for joiners to meet founders building their companies while in school? Do they offer courses that educate the joiners as much as the founders?
  • Beyond the curriculum, what e-ship programming is available in a given program? Do they run accelerator programs or have space for young companies to connect and incubate their ideas?
  • Is startup funding available such as contests, access to venture funds, loan forgiveness for startups coming out of the program, etc.?
  • What access do students have to the school’s network such as alumni, the local startup community, investors, other universities in the area etc.? How do they add value to the entrepreneurial experience of admitted students? Will this network fill in gaps in your current network?
  • If you’re considering the venture side of entrepreneurship, do the programs you’re looking at have an investment-oriented curriculum and/or opportunities for aspiring investors to experiment with investing and learn to work with founders while in school?
  • Finally, what is the entrepreneurship track record of a particular program? How many startups were founded by their alumni (either while in school or within five years of completing their MBAs)? What is their alumni companies’ funding track record? In what other ways are their alumni founders successful (revenue, social impact, focus on diversity & inclusion, strong and ethical business ethos, etc.)

In the world of entrepreneurship, there are so many variables to consider when making just about any type of decision – from what product to build, who to hire, how to sell and how to finance your business. The list is endless and extremely tied to the type of business you are building, your customers and who you are as a leader. Similarly, which route you take to develop your entrepreneurial skills is highly personal. The route one entrepreneur took that worked out well for them does not ensure the same will hold true for you. Consider all of the above and decide which one or combination of all options makes the most sense for you.

Have you done one or several of the above to help kick-start your entrepreneurial journey? Please share your experience and lessons learned in the comments!

From Zero To 100+: Preparing To Lead And Operate At Scale

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Photo Credit: Maria Semelevich

I’ve had many first hand experiences with the excitement and pain of scale at companies that started out with a few founders and soared to over 100’s or 1000’s of employees. At somewhere around 75-100 employees, there is a shift with leadership, teams and individuals and it’s important to plan for it or at least recognize when it’s happening and try to stay ahead of it. I’ve written the below for the CEO/Founder of an early stage company, but most of my advice can be applied to any leader of a scaling organization, even inside a large corporate entity. 

Leadership At ~100

As a company approaches 100 employees, the reality that it’s time to let go starts to hit its founding leaders. It is simply impossible to be plugged into everything. At this stage, you now are likely managing managers and more than ever have to empower your leaders to, well, lead! They will not always do things the way you do them or as well as you do and there will always be a few select things that you must own and decisions that only you can make, but at this stage if you don’t have the confidence and the right people to get things done without you being involved, you’re in for a rough ride. In fact, it is when founding CEOs don’t learn to step up into their roles and empower their leaders that investors/board members begin to lose confidence in the founding CEO’s ability to operate at scale; these founding CEOs end up getting pushed out/replaced. Here are a few tips in areas I find to be the most challenging at this stage:

  • People: When it comes to employees, there are two areas I see CEO/Founders get tripped up as their companies grow: Hiring and People Management. I am a big believer in staying close to the hiring process for as long as possible in the early stages. In my experience, the first 10-15 employees will set the culture of your company and how you lead them will set the tone for leadership going forward. As you start to bring on more members of your team, however, you can’t hand pick every one. Here’s what I  suggest for approaching hiring:
    • First 20-30 employees – If you have inexperienced managers, review candidate resumes together and establish selection guidelines for what qualifies a candidate for a round of interviews. Be part of the interview and hiring process as much as possible to set expectations on what makes a good hire at your company (even if the hiring managers are experienced) and serve as a role model to managers who will eventually do this themselves. This is also a great opportunity for the early hires to get to know you – especially if this is their first startup – getting to know the CEO/Founder can be a recruiting super power! Also, if hiring in general is new to you, get help from advisors/investors with more experience; books like Who or The Five Dysfunctions of a Team can be helpful, but the art of hiring is a skill that takes practice.
    • 50-100 – This is a transition period where you may sit in candidate reviews for key hires where the team decides whether to make an offer or not and why. Your role is not necessarily the decision maker, but rather to offer guidance and mentorship to the team on how to decide. You may interview the candidates at this stage too, but I suggest this be to either A) help a junior manager resolve concerns they have about the candidate or probe more deeply on areas where they feel less experienced, and B) to help close a candidate and sell them on the business and its potential.
    • 100+ – Let go! If guidelines are not set at this point (manifests as bad culture or heavy voluntary or involuntary attrition), then you need to rework the wheel with your hiring team. Otherwise, it’s time to set your team free to make the right calls for their teams’ needs. At this stage – other than your direct hires – you are only on-call as needed for key hires. For example, when VMware was nearing 800 employees, our founding CEO Diane Green was on standby to interview me for the first non-Palo Alto leadership role; both to assess my abilities for the role and to sell me on taking it (and I’m so glad she did!)

      For the people management side of things, consider the following:

    • 0-20 – Early on, just like hiring for the first time, you may be learning how to manage people for the first time. Get help with this and don’t try to figure it out yourself. You will spend more working hours than you ever imagined learning how to navigate people things while running your business, fundraising, etc. Hire a coach or find friends with management experience and lean on them. Read as much as you can and listen to podcasts like Reboot or Masters of Scale. Put your ego aside! Managing is hard, never mind learning how to do it when you’re also trying to launch a company!
    • 20-30+ – The best practice for team size is eight (recently termed the “two-pizza team rule” by Jeff Bezos) . If you’re reaching a point where you have more than 8 people working directly for you or for anyone who works for you, it’s time to scale out a management team. Ideally, bring in some managers who know how to manage vs. promoting all from within. I like to build teams with a balance of each to allow growth within the company but also to have role models and mentors for those who are growing. 
    • 30+ – As you start to have managers working for you, you need to trust them as leaders of their own teams and, similar to setting the hiring guidelines, your job is to set the people-management guidelines. How does one lead at your company? How do you give feedback? How do you establish an inclusive culture, develop employees and create a great place to work? Your job is to make sure these questions are answered and managers in your organization have the support and tools (compensation/equity budgets, training, systems) to manage to these guidelines. A big mistake I see companies at this stage make is waiting too long to hire people experts – both HR and experienced recruiters who get the startup to scale scene. Money invested in these roles early will save you tons of time and money as you scale. The serial entrepreneurs and co-founders of Drift hired their lead people-person as one of their first 5 hires; they learned from past mistakes!
    • Bonus tip: Every early stage CEO/Founder I know is shocked to realize the power they wield. Even if you consider yourself to be “one of the people”, everything you say and do is more impactful that you can imagine. A simple eye roll in a meeting could make a subordinate think they’re about to get fired. A “great job” on a new idea proposal could be heard as an OK or even a directive to proceed. You are powerful and potentially dangerous! This means tread lightly. If you do skip-levels (talk to employees of managers that report to you), never be directive and use the time to listen, only. If you like an idea, tell them, but make it clear it’s something they should discuss with their manager. If you are unhappy with an employee that reports to one of your managers, bring it up with the manager and put yourself in their shoes when you think about how to help them with this employee. This can be especially hard if some of these employees used to work for you directly before you hired their manager, but just imagine if your investor or board member went straight to someone who works for you and told them to do something or that they were poor performers. How would that make you feel? Be empathetic and manage your power carefully.
  • Product: If you’re a product-centered CEO/Founder (vs. say. Marketing- or Sales-centered), the thought of stepping too far away from product details probably sounds frightening! That said, if you have to be part of every discovery session, design review and test of products or features before they release, your company will never get anything done – or learn how to do it at scale. I have seen countless teams at a standstill waiting for the CEO to review their latest product designs because she was out fundraising or handling 27 other fires that needed to be distinguished. Don’t let this happen! Here’s how to avoid it:
    • As early as you can in your company’s lifetime, articulate your company’s True North and product guardrails and evangelize it like crazy to a point where it’s in the DNA of the company. The True North may evolve as the company matures, but keeping it clear and not wavering too often is critical. When I was the CTO at DigitalOcean, our true north was to empower developers to build great software and our guardrail was simplicity. If something new was being proposed and wasn’t to help developers build great software, and/or how it was designed wasn’t simple, it wouldn’t get on the roadmap. It’s the CEO/Founders’ and their leadership team’s job to make sure this is clear to every employee, and if it changes, why.
    • Establish a high level product roadmap that extends no more than 12-18 months; you have no idea how your product(s) or the market will evolve beyond that. Keep it at the broad strokes level – major products or epics within product lines and with clear, measurable, outcomes. Your job is to set the tone at the top and at under 100 employees you can stay pretty close to the details, but once teams get bigger, you will rely on this roadmap and the measurable outcomes to both track performance but also empower your teams to execute. As the company scales towards 100+, you will shift from attending routine product meetings and reading PRDs or briefs to trusting that your team knows what to build and can map it to the high level roadmap. If the roadmap changes over time, so will their work. Just don’t thrash too much – it takes time for new ideas to flourish or major product changes to make an impact. Patience is important here!
    • Once you have a decently sized product team (20+), you must have great product leaders and designers on your team. At this point, your time will more likely spent getting customer feedback and downloading it to your team, brainstorming new ideas and/or selling what you have. It’s OK to have a passion area that you must stay close to – perhaps a new innovation or a unique, personal area of interest, but the bottom line is…let your team execute!
  • Process: Quite simply, as you scale you must focus your attention away from the how and towards the what. At less than 100 employees, you will be thinking about the how related to all aspects of the business (many noted above, but also how to manage funds, manufacturing/shipping if applicable, payroll, insurance…the list is endless!). As you scale and hire experts in these areas, the goal is to let go and empower them to decide the how. Your job is to make the desired outcomes clear. Outcomes are not just financial either – everything from the culture of your company, the reputation of your products/services, and your brand is for you to make clear. As a mom who still shudders every time one of my kids borrows the car, I like to use the teen getting their license metaphor here:
    • 0-30 employees = learner’s permit in-hand, understands the basics, but still needs close supervision/training
    • 30-75 = passed driving test, but still on probation. Can’t drive during certain hours (equivalent to making all decisions solo), still needs some oversight.
    • 100+ = capable of borrowing the car for a weekend road trip with friends. Hand over the keys!

If your leaders feel like you won’t give them the keys, that you are back seat driving, or feel that you’re monitoring their every move, you will not establish trust or allow them to move your company forward. Also worth noting, creating this type of toxic, micromanagement culture of leadership can be a large contributor to CEO/Founder burnout as you try to manage “all the things”. 

Teams and Individuals at ~100

I’m going to keep this part simple. The bottom line is that there are people on your team that will grow beautifully as the business grows and there are those who just don’t do well in a mature environment. Some tips on how to stay ahead of this:

  • DNA: I’ve seen too many talented people become poor performers once a company started to scale simply because they did not have big-company DNA or because the company did not ensure they were in roles where they could continue to thrive. Think about who on your team has real startup DNA – do they thrive with ambiguity and constant change? Are they scrappy and just get stuff done, even though it may not be polished and perfect, but keep the ball moving forward? Do they break the rules in a good way? Now, what happens as your company grows and there’s more complexity in the business and/or more structure? Will they resent the bureaucracy? Will they refuse to be managed or adopt the “special snowflake” attitude that they know better because they’ve been there longest, have an “in” with the founder or have more equity? OR…will they rise to the challenges that come with growth, respect the structure and be seen as the guru among the team? Pay attention to your early hires as they and the company grows. If you see signs of trouble, decide whether there’s a better way for them to contribute without losing them OR decide it may be time to part ways – the company has outgrown them.

    I once had a talented engineer on my team at VMware who was a great prototyper, but not very strong when it came to writing production-level code. Each time we tried to have him follow a project from experimentation to production phases, he would be miserable trying to follow a structured process and the product leads would complain constantly about his attitude and the quality of his work. I was able to carve out a prototyping role for him on my team so we could keep experimenting with new ideas and he could remain happy and productive at the company. Sometimes you can make these things work, but when you can’t, consider how much time you may be wasting trying to force a situation that’s just not going to turn around. Often, the best course of action for those with startup DNA is to go find a new startup and if you can help them get there, even better!
  • To Lead OR Not To Lead: Pay attention to first-time managers who hate (or are bad at) managing, but took on the role as your company grew. Some early hires are put into a management role because of budget/hiring constraints that hate it OR that wanted to be a leader, but were really better suited as an individual contributor (IC). Put a process in place at your company at allows upward mobility in both specialist and management tracks and allow them to move between each. Make that a positive thing vs. having someone take an ego hit or be viewed as a failure for giving one or the other a try. In the early days at VMware, we had such fluidity when it came to people trying manager roles (or stepping into one while we tried to find a permanent hire) and either thriving or deciding it wasn’t for them. No shame, they learned, and were always welcomed back as an IC – in fact, several of them from the early days are now in some of the most senior IC roles at the company. The worst is when you lose a great IC who was a bad manager. By the way, I’ve also seen great leaders try to go back to coding/IC roles with mixed success. Point is, ensure you and your team are in the right roles and are given opportunities to be excellent.
  • Cross-team Dynamics: As the company grows, not only are new teams forming and new managers leading, but there can also be cross-team dynamics that create tension in the company. Most common, product and engineering teams being misaligned or sales/marketing/support challenges. Pay attention to how these interdependent teams interact and make sure your team leaders are as passionate about how they partner and collaborate with their peers as they are about how their own teams perform. Ensure fiefdoms don’t form and resolve any rifts between teams as soon as you suspect there’s an issue. These issues can be toxic and destroy what may have been a humming organization when it was smaller.
  • Compensation & Incentives: As the company grows, so must employees’ careers, compensation and incentives. Be thoughtful about salary structures early on and be mindful that haphazardly compensating new hires early on or bumping people up to retain them will undoubtedly create a need to recalibrate everyone’s compensation down the road. The recalibration process is PAINFUL.

    Remember, employees are motivated by three major things: The work they do, the people they do it with and fair compensation for that work. Throwing money or an unearned fancy new title at an unhappy employee will not retain them if the work they do is uninspiring, if they don’t live up to the expectations of the unearned new role and/or the people they work with are not enjoyable. These quick fixes are temporary. Similarly, beer on Fridays or a foosball table in the office is not as compelling an incentive as are equity refreshes and opportunities to take part in new product work or the chance to work with an industry luminary (or letting a poor performing/toxic peer go). Consider Maslow’s Hierarchy of Needs when it comes to your employees: They need the foundational basics (a desk, computer…), they need to feel safe (steady income, a health plan), loved (great co-workers & managers) and to self-actualize (assigned interesting work, able to reach career goals, achieving wealth to reach personal goals or making a social impact).
  • Human impact of hypergrowth: Finally, people don’t always grow as fast as their companies and can easily burn out or perform poorly if you’re scaling at hypergrowth speed. The best write up on this particular topic is Khalid Halim’s post for FirstRound. I also wrote a brief piece on how hypergrowth of teams can slow down an organization, here.

Scaling a company can be both exciting and daunting. If you’ve never experienced this journey, it can also catch you by surprise when things start to go wrong. The best recipe is managed growth, with an experienced team, getting help from experts and being thoughtful as you scale.

Got other tips on managing at scale? Please share in the comments!