Startup Series Posts

January 27, 2016

Sales Primer for Non-Sales Startup Founders

The founder of one of the startups in our Global Entrepreneur Program reached out to me this week. He is ready to start selling his company’s product, but he's never done sales before.

Often, startups consist of a hacker and a hustler—where the tech person is the hacker and the non-tech person is the hustler. In the aforementioned company, there are three hackers. Despite the founder being deeply technical, he is the closest thing they have to a hustler. I'm sure he'll do fine getting in front of customers, but the fact remains that he's never done sales.

So where do you begin as a startup founder if you've never sold before?

Free vs. Paid
His business is B2B, focusing on car dealers. He's worried about facing a few problems, including working with business owners who don’t normally work with startups. He wants to give the product away for free to a few customers to get some momentum, but is worried that after giving it away, he won’t be able to convert them to paying customers.

Getting that first customer is incredibly important, but there needs to be a value exchange. Giving products away for free presents two challenges:

  1. By giving something away, you devalue your product in the eyes of the customer.
  2. The customer has no skin in the game—no incentive to use it or try to make it work.

Occasionally, founders have a very close relationship with a potential customer (e.g., a former manager or a trusted ex-colleague) where they can be assured the product will get used. In those cases, it might be appropriate to give it away, but only for a defined time.

The goal is sales. Paying customers reduce burn and show traction.

Price your product, go to market, and start conversations. Be willing to negotiate to get that first sale. If you do feel strongly about giving it away for free, put milestones and limitations in place for how and when that customer will convert to paid. For example, agree to a three-month free trial that becomes a paid fee in the fourth month. Or tie specific milestones to the payment, such as delivering new product features or achieving objectives for the client.

Build Credibility
When putting a new product in the market, especially one in an industry not enamored with startups and where phrases like “beta access” will net you funny looks, it helps to build credibility. This can be done incrementally. If you don't have customers, start with the conversations you’re having: “We’re currently in conversations with over a dozen companies.”

If you get asked about customers, don’t lie. Don’t even fudge it. I recommend being honest, and framing it by saying, “We’re deciding who we want to work with first. We want to find the right customer who is willing to work closely with us at the early stage. It’s the opportunity to have a deep impact on the future of the product. We're building this for you, after all.”

When you have interest and are in negotiations, you can then mention to other prospective customers that you’re in negotiations with several companies. Be respectful of the companies you’re in negotiations with; I wouldn't recommend mentioning names unless you have explicit permission to do so.

As you gain customers, get their permission to put them on your website. Get quotes from them about the product, and put those on your site and marketing materials. You can even put these in your sales contracts.

Following this method, you can build credibility in the market, show outside interest in your product, and maintain an ethical standing.

Get to No
A common phrase when I was first learning to sell was, “get to the ‘no’.” It has a double meaning: expect that someone is going to say “no” so be ready for it, and keep asking until you get a “no.” For example, if “Are you interested in my product?" gets you a “yes,” then ask, “Would you like to sign up today?”

When you get to no, the next step is to uncover why they said no. At this point, you’re not selling; you’re just trying to understand why the person you’re talking to is saying no. It could be they don't have the decision-making authority, they don't have the budget, they need to see more, or the product is missing something important. The point is, you don’t know, and your goal here is to get to the next step in their process. And you don’t know what that is unless you ask.

Interested in learning more? Dharmesh Shah, co-founder and CTO of Hubspot and creator of the community OnStartups, authored a post with 10 Ideas For Those Critical Early Startup Sales that is well worth reading.

As a founder, you’re the most passionate person about your business and therefore the most qualified to get out and sell. You don't have to be “salesy” to sell; you just need to get out and start conversations.

-Rich

January 15, 2016

Vuukle: Helping Publishers Manage Comments and Match Readers with Content

I recently had a conversation with Ravi Mittal, the founder of a company called Vuukle. Vuukle is based in New Delhi and has just graduated from our Catalyst startup program.

Vuukle actually started out in Silicon Valley—Ravi launched his first product iteration with the goal of trying to source public opinion on the Web. Key to his initial offering was a proprietary algorithm he developed to sort comments in order of credibility—a highly valuable aspect of the product, but something he quickly learnt wasn’t enough value to encompass a product.

Through experiments with Vuukle’s early customers (including the Santa Clara Weekly), a major problem emerged which appeared to pervade the online publishing industry: reader engagement wasn’t sticky enough to compel them to post (and reply to) comments. In order to solve this meta-problem, Vuukle pivoted into a new type of comment publishing system, which helps publishers see engagement through custom analytics.

The major problem Vuukle faces is not unique to just the publishers they service. It’s a pretty large scale global problem, extending beyond news publishers and into all content-based publishing online—so you can imagine how much competition is out there around the globe in this space. When I asked Ravi how he differentiates Vuukle from recently dominant players like Livefyre and Disqus, he offered, "Most customers aren’t using those other services; they have their own commenting systems. If anything, we were pitted against Facebook commenting. In the few cases where Disqus is being used, we’ve seen problems with load times, throttling limits and so on."

In order to set Vuukle in a class of its own, Ravi and his team—which is globally dispersed, with people in Egypt, the Ukraine, U.S.A., and India—have architected an infrastructure for super-fast load times that work at amazing scale, employing SoftLayer servers in our Singapore and India data centers, as well as working with a third party, ScaleDB, to handle database queries and traffic. Of course, that alone doesn’t give them a unique value proposition; Vuukle truly sets itself apart by dropping publisher costs upfront to a minimal platform access fee and offering a 50/50 revenue share model. Vuukle not only is set up to handle high traffic websites with commenting, but it also promotes user engagement with comments by integrating with actual publishing systems. Vuukle passes traffic between posts and offers editors insights into how readers are commenting, in addition to creating a new revenue stream through comments—from which it sources the majority of its own income.

Interestingly, Ravi’s move from the Valley to India came because of family reasons and ended up being a blessing to the business. Early after his move, he realized that there was a ton of opportunity for Vuukle with the major Indian newspapers that had cobbled together their own infrastructure to power websites. Just a couple years in, Vuukle is powering comments on The Hindu, Deccan Chronicle, and Indian Express, three of the most highly trafficked news websites in the country. To help global adoption amongst all sorts of publishers, Vuukle also offers a free WordPress plugin.

Vuukle seems to have gained traction through Ravi’s hard work chasing customers at home, and he’s proud to be finding success despite being bootstrapped. When questioned about the local startup scene, Ravi said, “Nothing much is unique in the Indian startup ecosystem. [It's] kind of like a gold rush in India, where founders are hunting for investment before they have a clear market path and products that are market-ready. A lot of copycat businesses [are] launching that are focused on Indian markets (taking models from the States and elsewhere.) Not many patents are being filed in India—not much actual innovation, indicative of a proliferation of large seed round raises (around $1 million) and a lot of startups spend funding on staff they don’t need.”

The future seems bright for Vuukle. Its growth beyond India’s borders will happen soon and will be financed through revenue rather than venture capital rounds, of which Ravi seems quite wary. Now that Vuukle has graduated from Catalyst, I was keen to hear whether the company would still keep the majority of their infrastructure with IBM—it turns out prospective Vuukle customers love hearing that their infrastructure is hosted on our cloud and that a core aspect of Vuukle’s value proposition is the scale and reliability we offer their solution.

I really think this company is an exciting one to watch. I look forward to seeing greater success for Vuukle as they grow with our ever-expanding footprint of data centers in the Asian region and globally.

-Qasim

Based in Toronto, Qasim Virjee manages the Catalyst Startup Program in Canada and can be reached on twitter (@qasim) or via his personal website.

December 9, 2015

Startups should embrace both diversity and inclusion

During the NewCo Boulder festival, web development agency Quick Left gave a talk about diversity and inclusion in the workplace. The panelists shared stories of their experiences around diversity—good and bad—and gave advice on what can be done to make workplaces more inclusive. It was one of the best talks I heard all year.

After much discussion, both philosophical and tactical, an audience member expressed concern about counter-discrimination. Would the time come when he would be overlooked for a job because he was not a diversity candidate?

This is not the first time this has been brought up in diversity discussions, and he was expressing what many (perhaps too many) straight white males think when diversity is discussed. To the credit of Gerry Valentine, one of the panelists, he did not chastise the audience member, and instead commended him for his bravery. The man who asked the question gave voice to a common concern that is often thought, but rarely brought up. The panelists at NewCo Boulder handled it very well, pointing out that no one wants a job just based on their gender, skin color, sexual preference, or anything other than their ability to execute on the job. And, collectively, we want to create a world where everyone has the opportunity to compete for jobs on equal ground.

I was truly moved by the entire session, but found myself upset that even at the close of 2015 we are still answering questions about counter-discrimination. When Gerry commended the question for its bravery, I first wondered if he was being glib. But knowing Gerry, I was certain he was serious about his comment. Upon further reflection, I realized what's interesting about this "pale and male" pushback is that it comes from a place of fear. A fear of discrimination is at the root of the question when someone asks, "As a white male, am I going to get passed over for a job because this company wants to hire for diversity?"

Following Gerry's example, it's OK to acknowledge that fear. It’s OK to point out that white men don’t want to live in a world where they are discriminated against, even subtly. While that is a valid fear, for the straight white male candidate, it is only a fear of a potential future. If they can imagine potential discrimination, can they acknowledge that the reality of our world today: anyone who isn’t a straight white male does experience this as real fear. Imagine walking into a job interview having to first overcome the things about you that you cannot control (gender, skin color, sexual orientation, physical handicap, economic background, country of origin, etc.) just to get to a level playing field with the other candidates. If you don't want this for yourself, you certainly wouldn't want it for anyone else.

In startups, we love to talk about unfair advantage, but when it comes to hiring, the only unfair advantages should be skills and experience. What the movement for inclusion and diversity is about—and what we should be striving for—is a world where we all compete equally. If it is a brave thing to express your fear publicly, it is braver still to acknowledge the reality of the situation and work to rectify it.

One of the things I love about the startup community is that once we identify a problem, we move forward to solve it in as many ways possible. The path to inclusion in the workplace doesn't have to be a pendulum that oscillates between two extremes—discrimination and counter-discrimination—before settling down in the middle. Pendulums are a relic of the industrial era. In the digital era, we can choose our target, set our standards, and move forward as a community to achieve them. As you build your startup, build inclusion in your workplace from day one.

-Rich

October 21, 2015

The Dumbest Thing I’ve Ever Said

Last week, I attended the LAUNCH Scale conference and had the pleasure of attending the VIP dinner the night before the event began. We hosted the top 10 startups from the IBM SmartCamp worldwide competition for the dinner and throughout the events. Famed Internet entrepreneur Jason Calacanis joined us for the dinner and gave a quick pep talk to the teams. He mentioned that people come up to him and lament that they wished they’d gotten into the "Internet thing" earlier—and that he's been hearing this since 1999. His story reminded me of a similar personal experience.

In the fall semester of 1995, I was a junior at St. Bonaventure University, working in the computer lab. One day after helping a cute girl I had a crush on, she said to me, “You’re so good with computers, why aren’t you a computer science major?” Swelling with pride, I tried to sound impressive and intelligent as I definitively stated, “Windows 95 just came out, and pretty much everything that can be built with computers has been built.”

Yep. Windows 95. The pinnacle of software achievement.

It is easily the dumbest thing I've ever said—and perhaps up there as one of the dumbest things anyone has said. Ever.

But I hear corollaries to this fairly often, both in and outside the startup world. "There's no room for innovation there," or "You can't make money there," or "That sector is awful, don't bother." I'm guilty of a few of those statements myself—yet businesses find a way. We live in an age of unprecedented innovation. Just because one person didn't have the key to unlock it doesn't mean the door is closed.

Catch yourself before you fall into this loop of thinking. It might mean being the "Uber of X" or starting a business that's far ahead of its time. Think it's crazy to say everything that can be built has been built? I think it's just as crazy to say, "It's too late to get into ___ market."

For example, when markets grow in size, they also grow in complexity. The first mover in the space defines the market, catches the innovators and early adopters, and builds the bridge over the chasm to the early and late majority. (For more on this, read Crossing the Chasm by Geoffrey Moore.) When a market begins to service the majority, the needs of many are not being met, which leaves room for new entrants to build a business that addresses the segments dissatisfied with the current offerings or needing specialized versions.

The LAUNCH Scale event showcased dozens of startups and the innovation out there in the world always amazes me. I'd recommend it to any startup that has built something great, and now needs to scale. Still haven't built something yourself? Think you missed the opportunity to build and create? In 1995, I didn't think about how things would change in five, 10, even 20 years. Now it's 2015 and the startup world has been growing faster than any sector in history.

Think everything that could be built has been built? Think again. Want to build something? Do it. Build something. What are you waiting for? Go make a difference in the world.

-Rich

August 25, 2015

Free Resources for Your Startup

Building and running a startup is both difficult and expensive. From salary to servers to services, the demands on your budget are constant and come from all directions. On the Catalyst team we know this firsthand—our program was created as a way for startups to access SoftLayer's robust platform before they have revenue or funding.

After moving to Boulder, Colorado in 2012, the first startup I joined was a member of the Catalyst program. Without Catalyst, our organization would have been paying out of pocket for the bare metal servers we needed. Instead, that money was freed up for other essentials (like food to keep us alive).

Infrastructure isn't the only area in which startups can leverage free offerings. Since joining the Catalyst team one year ago, I've tracked and collected other free resources for startups. I compiled my research into a presentation that I've given at a few events. The presentation is available on SlideBean (a free online presentation platform, what else?) and is constantly being updated. Some highlights are below:

Big Company Programs
The Catalyst program is a model on how big companies can meaningfully engage with startups, and we're not the only ones doing it.

  • SVB: Silicon Valley Bank offers a program called Accelerator. Perks including free checking and financial mentorship. While saving on business checking won't make a big dent in your cash flow, the financial mentorship is top notch. The SVB team consists of experts in banking who can offer advice on fundraising, financial instruments, and cash management.
  • SendGrid: Email deliverability is crucial for your company, so start with the best in the business. The free plan includes 10,000 emails per month, up from 200 emails per day when I first started giving this talk. Go to the pricing page and scroll down to the bottom for the free plan. (Full disclosure: SendGrid is a former partner.)
  • NASDAQ Exact Equity: I was recently at a VC conference, where I had two separate conversations about investors’ frustrations with disorganized or downright undocumented cap tables. The NASDAQ Exact Equity freemium tool will not only help you wrangle your cap table, but it will also signal success to the investor by showing that you’re thorough and organized.

Startup Freebies
I'm not going to cover the basics, such as Evernote, Trello, Asana, Pivotal Tracker, Launch Rock, Bootstrap, Google Drive, etc. You probably already know about these programs. Instead, I’ll share a few great ones you may not know about.

  • Docracy: If you need any sort of legal document, Docracy should be your first stop. The legal documents were prepared by lawyers and are available for free. The choices range from SaaS Terms & Conditions to founder agreements.
  • HTML5 UP: Need a quick, easy, and responsive template for your site? When WordPress is too much of a hassle for a splash page, head over to HTML5 UP for dozens of choices of free templates.
  • UI Kit: As you're moving from the free HTML5 UP template toward being able to build out your site with the free Bootstrap toolkit, save yourself coding time and get the UI Kit for free design elements such as lightbox, slider, accordions, and more.
  • SlideBean: I love SlideBean. While searching for "free PowerPoint templates," I discovered that all the templates were hideous. Then I stumbled across SlideBean and fell in love with it. It makes putting together a presentation quick and easy, and keeps it from looking like you traveled to 1999 to get your template.

Collections
Below are my favorite collections of resources for any freebies that I haven’t already covered.

  • Product Hunt List: The founder of CrazyEgg and KISSmetics has an exhaustive list of free and freemium products for your startup.
  • Freebie.supply: Over 400 resources are grouped by category. I especially love the design resources.
  • Startup Stash: Not all of the free deals, mostly in the form of percentage discounts. But if you're going to pay for something, check F6S first for a discount.

And finally, the best piece of advice when trying to save money can be found in my last post: A Grandmother’s Advice for Startups: You never know ‘til you ask.

Have a free resource that you absolutely love that’s missing from my list? Email me at rmaloy@softlayer.com or tweet me @stoneybaby and let me know!

-Rich

July 7, 2015

All Aboard The SoftLayer Startup Train!

This year, SoftLayer partnered with ThreeFortyNine, a co-working space in Guelph, Ontario, to offer founders, funders, and anyone else heading to Montreal’s International Startup Festival an amazing first class ride on the SoftLayer Startup Train.

I sat down with Brydon Gilliss, the founder of ThreeFortyNine, to learn more about the experience.

Now in its fourth year, the Startup Train is quickly becoming an institution for entrepreneurs, funders, and professionals traveling from Toronto to the International Startup Festival. What was the impetus behind creating this experience?
The travel time to conferences is often wasted time. We wanted to try and make better use of it. Also, it can be lonely when you return from an exciting conference but don't have anyone to connect with after who had that shared experience with you. Having a group of people from your city who you travel and share the experience with creates a longer-term alumni effect in your community.

The International Startup Festival in Montreal draws one of the largest audiences of tech entrepreneurs out of any event in Canada. What do you think makes it so popular?
The city, for one. Montreal is one of the best cities to visit in the summer. There is always an attraction; a reason to make the time. The festival venue is completely different ... right on the water in Old Montreal. The festival-atmosphere makes it a unique and an enjoyable experience.

How has the Startup Train experience changed over the past 4 years?
Startup Train alumni know what to expect. There are always new people to meet and learn from, and we don’t complicate the experience with too much programming. There is enough to keep your business-busy if that’s your goal, but it’s also easy to relax, enjoy the service and views while meeting and chatting with people with a cocktail in hand. This year, VIA Rail, is doing us a favor and giving us one of their cool dome cars typically used for the longer-haul cross-Canada trips.

We’re really excited to do some speed mentorship on the observation deck of the train this year. What else can attendees expect to experience on the SoftLayer Startup Train this year?
There are plenty of people to discuss your ideas with. You can take advantage of the networking with like-minded startups, running your ideas past some of the old hats on the train, or getting some quality advice from the mentors on-board.

The train experience attracts people from around Ontario, not just Torontonians. What do you think gels the Ontario tech community, and how does this play out each year at the Festival in Montreal?
I'm not sure I know the answer. Certainly the train, as with other events in our community, is a gel point in itself. In Canada, in general, we're working to find our way quickly in this fast moving startup world. Events like the train and Startup Festival, are important ways for our lonely entrepreneurs to come together and build our energy; share battle stories; etc.

With around 2,000 people attending the International Startup Festival in Montreal it can get pretty hectic at the venue and in the Old Port in general. What are some tips you can give founders traveling, on or off the train, to Montreal for the Festival?
Getting to Montreal is half the battle. Those choosing Startup Train travel can expect to exert minimum effort with the payoff of maximum enjoyment. Train travel is so easy especially when compared to flying. To fly these days (we won’t even get into the 401 or driving in Montreal), travelers need to be hours early in order to be processed and searched. You have to deal with luggage hassles. You end up losing valuable time in an irritating environment. The actual flying experience itself isn’t an event compared to the romance and fun of train travel. From the moment you get to VIA Rail’s first class lounge prior to leisurely boarding, the actual experience itself is so relaxing. In a plane you’re not likely to get a view, but on a train, that’s all you have. It’s easy to meet and make authentic connections with people on the train right away, so that by the time you arrive in Montreal, you’ve already got some necessary work done. Near the Festival site, you’ve got plenty of social options in the city (walking distance and otherwise). It’s easy to sneak off and grab a beer on a cobblestone street in Old Montreal with startup train passengers if you need a break from the Festival.

For anyone interested in riding the SoftLayer Startup Train, please visit http://ibm.co/1HHV2QZ. If you are a member of our Catalyst Startup Program and would like to travel to the Festival on us, please email me ASAP.

-Qasim

July 1, 2015

Canada’s Funding Roadshow Recap

Fundica helps accelerate the online funding search for entrepreneurs in Canada. Once a year they take their mission offline and organize the country's only Funding Roadshow. In 2015, the SoftLayer Catalyst startup program partnered with Fundica to take the Roadshow to 11 cities across the country where they listened to over 200 entrepreneurs pitch their tech startups to panels of funders.

I recently sat down with Lana Tayara from the Funding Roadshow.

So, tell us about the purpose behind organizing the Funding Roadshow.
The mission of the event is to better facilitate connections between entrepreneurs, funders from private and public sectors, and startup community leaders across Canada. The event aims to fulfill its purpose though a series of events, planned in 11 cities across Canada, by providing educational content designed to help early-stage technology based companies either start and/or grow their business. The one-day event is split into two streams throughout the course of the day. The first one allows up to 20 selected tech companies to present their business in a private room to a panel of investors, mentors, and service providers and get candid feedback to help them validate their business model. The second stream is open to all participants, comprised of all company stages, community developers, investors, and services providers, to listen to great presentations provided by industry leaders that will cover a wide range of topics designed to help them succeed with their business.

To maximize engagement in each city, the Funding Roadshow collaborates with local pro-entrepreneurship groups (accelerators, incubators, universities). In turn, this allows us to better connect our national partners with the local entrepreneurial community and its facilitators. Our national partners get the opportunity to network with each community, gain visibility nationally in the startup scene, and raise awareness about the resources they can offer to Canadian businesses.

What were your 2015 Funding Roadshow goals?
The goals of the 2015 Funding Roadshow were to establish new partnerships with key players of the entrepreneurial community across Canada that would engage participants in each city to generate relevant connections, opportunities, and resources to each person present in the event.

In the 2015 Funding Roadshow, based on a follow-up survey conducted three months later, 31.6 percent of entrepreneurs were offered funding and 33.3 percent of funders funded entrepreneurs. With respect to the funding aspect of our event, our selection criteria for pitching companies were stricter, and presentation guidelines were shared with companies as to increase the quality of pitches and funding probability for 2015.

Lastly, we also offered a wider range of educational topics such as funding, growth models, legal guidance, bookkeeping, storytelling, and other resources available to help startups with their success. We would like to share the value with business owners using technology such as financial management software, online banking, cloud hosting, and secure cloud-based document storage, which can help increase efficiency and productivity within their organization.

What do you think the 2015 Funding Roadshow accomplished?
The 2015 Funding Roadshow travelled through 11 cities from Halifax to Victoria. In each city, up to 20 selected technology-based companies pitched to a panel of eight funders. The initiative was put together with 59 partners, and provided over 96 educational presentations, and engaged 1,147 participants coast-to-coast. The Funding Roadshow was very proud to be able to form new partnerships with two of the most influential hubs in Canada, MaRS and Ryerson DMZ, both of which welcomed the event into their space as exclusive hosting partners in downtown Toronto.

Based on on-site feedback forms we collected from participants across Canada, we received excellent responses:

  • 100 percent of participants who took the survey (funders, pitchers, community members, and general attendees) would participate in the next Funding Roadshow. (Based on a 19 percent participation response.)
  • 94 percent of all participants who answered the survey were satisfied to very satisfied.

We are already in talks with returning sponsors who have reached out to express interest in the next edition of the Funding Roadshow.

Please relate some highlights from across this year's Roadshow. Any themes which emerged amongst all the pitching and networking?

  1. Canadian VCs (venture capitalists) are investing more in early-stage companies.
  2. There is an increase in interest from U.S. investors in mid to later stage companies.
  3. Angel investment in technology companies has increased in comparison to previous years.
  4. Emerging accelerators and collaboration between them.
  5. Government funding varies significantly between provinces.
  6. Early stage companies are still struggling with funding identification.

Overall the Funding Roadshow was a great success, and we can’t wait for 2016. SoftLayer will be there. Will you?

-Qasim

April 17, 2015

A Grandmother’s Advice for Startups: You Never Know ‘til You Ask

Today my grandmother turns 95. She's in amazing shape for someone who's nearly a century old. She drives herself around, does her own grocery shopping, and still goes to the beauty parlor every other week to get her hair set.

Growing up less than a mile from her and my granddad, we spent a lot of time with them over the years. Of all of the support, comfort, and wisdom they imparted to me over that time, one piece of advice from my grandmother has stood the test of time. No matter where I was in the world, or what I was doing, it has been relevant and helpful. That advice is:

You never know ‘til you ask.

Simple and powerful, it has guided me throughout my life. Here are some ways you can put this to work for you.

Ask for the Introduction
Whether you're fundraising, hiring, selling, or just looking for feedback, you need to expand your network to reach the right people. The best way to do this is through strategic introductions. In the Catalyst program, making connections is part of our offering to companies. Introductions are such a regular part of my work in the startup community. In my experience, people want to help other people, so as long as you're not taking advantage of it, ask for introductions. You're likely to get a nice warm introduction, which can lead to a meeting.

Ask for the Meeting
Now that you have that introduction, ask for a meeting with a purpose in mind. Even if you don't have an introduction, many people in the startup world are approachable with a cold email.

Guy Kawasaki, former chief evangelist for Apple, and author of 13 books including The Art of the Start 2.0, wrote a fantastic post, "The Effective Emailer," on how to craft that all-important message with your ask.

Another great take on the email ask is from venture capitalist Brad Feld, "If You Want a Response, Ask Specific Questions." This post offers advice on how not to approach someone. The title of the post says it all, if you want a response, ask a specific question.

Ask for the Sale
Many startup founders don't have sales experience and so often miss this incredibly simple, yet incredibly important part of sales: asking for the sale. Even in mass-market B2C businesses, you'll be surprised how easy and effective it is to ask people to sign up. Your first sales will be high-touch and likely require a big time investment from your team. But all of that work will go to waste if you don't say, "Will you sign up to be our customer?" And if the answer is a no, then ask, "What are the next steps for working with you?"

Empower Yourself
It's empowering to ask for something that you want. This is the heart of my grandmother's advice. She is and has always been an empowered woman. I believe a big part of that came from not being afraid to ask for what she wanted. As long as you're polite and respectful in your approach, step up and ask.

The opposite of this is to meekly watch the world go by. If you do not ask, it will sweep you away on other people's directions. This is the path to failure as an entrepreneur.

The way to empower yourself in this world starts with asking for what you want. Whether it's something as simple as asking for a special order at a restaurant or as big as asking for an investment, make that ask. After all, you'll never know unless you ask.

-Rich

March 23, 2015

Redefining the Startup Accelerator Business Model: An Interview with HIGHLINE’S Marcus Daniels

In this interview, SoftLayer’s community development lead in Canada, Qasim Virjee, sits down with Marcus Daniels, the co-founder and CEO of HIGHLINE, a venture-backed accelerator based in Vancouver and Toronto.

QV: Y Combinator has become an assumed standard for accelerators by creating its own business model. What do you think is both good and bad about this?

MD: Y Combinator (YC) not only created a new model for funding tech startups, but it also evolved the whole category. Historically, I like to think that Bill Gross's Idealab represented accelerator/incubator 1.0 and YC evolved that to 2.0 over the past decade, resulting in a hit parade of meaningful startups that are changing the world.

The good is that YC has created a “high quality” bar and led the standardization of micro-seed investment docs for the betterment of the whole startup ecosystem. It proved the model and has helped hundreds of amazing founders with venture profile businesses that are changing the world.

The bad is that there are now thousands of accelerators/incubators globally running generic programs that don't help founders much. More than half have a horrible rate helping startups raise follow-on capital and almost all never had a single exit from a startup they invested in.

HIGHLINE has a strong track record in our short history and now sees a big opportunity to be amongst the leaders in the evolution of the accelerator industry.

QV: Many accelerators focus on streamlining a program to process cohorts of companies at regular intervals throughout the year, every year. Often, the high throughput these programs expect means they must select companies from applications, rather than the approach you seem to be taking. Can you explain how HIGHLINE is sourcing companies for investment?

MD: HIGHLINE gets over 800 applications a year and targets about 20–30 investments during that time. Out of our last 12 investments, all had either come from referral partners or the team hunting the best founders to be part of our portfolio. Over the years, we have moved from the ideation stage, which comprises the majority of inbound applications, to the MVP in market stage, which is our sweet spot now. We will also focus on low-volume, high-touch advisory support, which is why a lot of time is spent building relationships with founders and adding value to MVP-stage startups before investing helps curate better deals.

QV: Traditionally, investment vehicles (such as VC firms and accelerator programs) have been run by financial industry types, but it seems that you are taking a more entrepreneurial approach with HIGHLINE and constantly evolving your business model. What can you tell me about this?

MD: The best accelerator leaders globally are past entrepreneurs who have some investment experience given how hands-on you have to be with the companies. Without the experience of starting and growing ventures, it is really hard to help tech founders navigate the daily challenges. Also, the best founders get to choose, and they want to work with other top founders in a long-term mentor/advisory/coaching relationship.

QV: How does being “VC-backed” differentiate HIGHLINE from other accelerators?

MD: Having several VCs as investors, such as the BDC and Relay Ventures, gives us an edge in several ways. Firstly, they are not only a great quality referral network for deals, but also a huge help in getting our companies venture-ready—even if they may not invest directly. Secondly, they allow us to internally focus on a specialization in helping venture profile businesses raise follow-on capital, as opposed to the glut of programs that are optimized for entrepreneurial education and lifestyle job creation. Lastly, they put big pressure on the whole HIGHLINE team to both get results for shareholders and build something unique that can be a category leader over the next decade.

QV: Our country is physically large and this seems to have created differentiated tech startup scenes between its cities. How does HIGHLINE collapse the geographic divide by having a physical presence in both Vancouver and Toronto?

MD: HIGHLINE tries to curate and unite the best digital founders, institutional investors, and ecosystem partners across Canada. We position our offices in both Vancouver and Toronto as portfolio hubs for founders who want to be headquartered in Canada, but want to take on the world. Most importantly, we spend time in all major Canadian startup ecosystems and have plans for unique events to bring our curated community closer together.

- Qasim

March 20, 2015

Startups: Always Be Hiring

In late 2014, I was at a Denver job fair promoting an event I was organizing, NewCo Boulder. All the usual suspects of the Colorado tech community were there; companies ranging in size from 50 to 500 employees. It's a challenge to stand out from the crowd when vying for the best talent in this competitive job market, so the companies had pop-up banners, posters, swag of every kind on the table, and swarms of teams clad in company t-shirts to talk to everyone who walked by.

Nestled amid the dizzying display of logos was MediaNest, a three-person, pre-funding startup in the Catalyst program, at the time they were in the Boomtown Boulder fall 2014 cohort. What the heck was a scrappy startup doing among the top Colorado tech companies? In a word: hiring.

MediaNest was there to hire for three roles: front end developer, back end developer, and sales representative. They were there to double the size of their team ... when they had the money. In the war for talent, they started early and were doing it right.

I've often heard VCs (venture capitalists) and highly successful startup CEOs say the primary roles for a startup CEO are to always keep money in the bank and butts in seats. Both take tremendous time and energy, and they go hand-in-hand. It takes months to close a funding round, and similarly, it takes months to fill roles with the right people. If you're just getting started with hiring once that money is in the bank, you're starting from a deficit, burning capital, and straining resources while you get the recruiting gears going.

The number one resource for startup hiring is personal networks. Start with your friends and acquaintances and let everyone know you're looking to fill specific roles, even as you're out raising the capital to pay them. As the round gets closer to closing, intensify your efforts and expand your reach.

But what happens if you find someone perfect before you’re ready to hire them? Julien Khaleghy, CEO of MediaNest, says, "It's a tricky question. We will tend to be generous on the equity portion and conservative on the salary portion. If a comfortable salary is a requirement for the person, we will lock them for our next round of funding."

MediaNest wasn’t funded when I saw them in Denver, and they weren’t ready to make offers, so why attend a job fair? Khaleghy adds, based on his experience as CEO, "It's actually a good thing to show a letter of intent to hire someone when you are raising money."

At that job fair in Denver, MediaNest, with its simple table and two of the co-founders present, was just as busy that day as the companies with a full complement of staff giving away every piece of imaginable swag. I recommend following their example and getting ahead of the hiring game.

As long as you're successful, you'll never stop hiring. So start today.

-Rich

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