Advice, Community

Want to build a startup accelerator?

At PIE, we’re extremely lucky in that we get to talk to amazing founders and startups, day in and day out. But they’re not the only folks interested in chatting with us. We also get a lot—a lot—of inquiries about how PIE came to be. And how they can go about building a startup accelerator for their respective communities or cities.

So we took a few minutes to crank out some content in this regard, featuring the seven easy steps for building a startup accelerator.

This isn’t a guide. Or a regimen. This isn’t the answer. This is simply how PIE became an accelerator. There is no right timespan for this. For some communities, it happens more quickly and organically. For others, it takes a long, long, long time.

For more, read “Want to start an accelerator?

 

Advice, Community, Mentors

How to filter through all your startup advice this Thanksgiving

“Here’s what you should do.” It’s a sentence you’ve probably heard a lot. Friends, family, peers, mentors, investors—they all have helpful advice, but when your cousin Billy gives you business advice this Thanksgiving that conflicts with advice an investor gave you just last week, what should you do?

First, take a big bite of stuffing.

Then think about it. Advice and feedback is important, but you simply can’t weigh all feedback the same. Startups at PIE have spoken to peers, investors, and dozens of mentors over the past few months and here’s how they’ve sorted through it all.

How invested are they? How much care / concern do they have for you and your goals?

Kai, cofounder of Krumplr thinks about this every time he chats with someone. “You learn a lot of how to read people over time—customers, your bosses, people you manage, and across many different cultures. I start out by saying, ‘Does the person I’m talking to like me or not? Does the person I’m talking to care or not?’ And that’s something that you can very quickly establish. If it’s a positive relationship, I multiple pretty much any critique I get by a factor of five.”

You might meet with someone who doesn’t care and isn’t willing to put in the intellectual effort. Their feedback may be vague—platitudes in a way—like “focus your message”, “find your target audience.” It might be helpful to ask probing questions to find out if they really understood your problem.

There are on the other hand also people who don’t really care but are still willing to put in the intellectual challenge. “Those are good people to listen to,” says Kai. And finally, people who care and invest their time and effort to understanding your problem and thinking about your solution. That’s a given, pay attention to their input.

How experienced are they?

This one’s a little trickier to navigate because it’s often easy to confuse loud volume and confident delivery with actual success and experience. Aunt Susan’s confident remarks on how you should launch your business may sound extremely persuasive, but being an excellent baker doesn’t mean she has relevant experience in your industry. The same is true with anyone else who gives you feedback—investors, mentors, peers. Just because something worked a certain way in their field doesn’t always mean it’ll translate to yours. Levi from Droplr looks for people who have a track record of experience and success. He’ll give them extra attention if they’ve achieved success in his particular industry.

Are they willing to tell you the truth?

Kevin from Nutmeg appreciates individuals who exhibit a sense of trust with no hidden agenda. “The most value we received from PIE were from mentors who weren’t afraid to call bullshit right away. They’d say, ‘you should do x, and here’s why.’” Are the people you’re hearing from worried about offending you or hurting you? You might want to be careful if all of a mentor’s feedback is as sweet as that pumpkin pie. There’s nothing wrong with good feedback, especially if you’re on your A game as a startup, but make sure the person you’re talking to isn’t afraid to make you cry if they need to.

Are you receiving repetitive feedback?

Imagine arriving home on Thanksgiving day only to find your friends and family sitting in a semicircle around the front door. You soon realize that this is a planned intervention. They have a message to tell you—it’s important and everyone seems to realize it except you. (Let’s hope this doesn’t actually happen!) The point is, while there are multiple ways to run a business, hearing repetitive advice from a number of people is probably a good indicator that it’s worth listening to.

What’s your gut telling you?

Lastly, here’s the comment I heard from nearly every startup. Learn to listen to your gut. Ultimately, it’s your business. Deep down inside you know where you want to steer this ship, and you wouldn’t feel comfortable going against this anyway. Use feedback as a way to rethink your direction, but at the end of the day, if you can’t convince yourself that the advice you’re hearing is good and true, you might just have to go with your gut.

And while you’re having that Thanksgiving conversation with your friends and family, don’t forget to get seconds on that stuffing.

One can always make better decisions with stuffing.

Advice, Community, Mentors

How to find a mentor by not asking for one

I’m here to talk about building mentor relationships. I wish I could write a listicle or “how to” document. The truth is that building mentor relationships is complicated. There is nothing more personal or nuanced. I’m going to try to put into words how we over at Switchboard built our mentor relationships, and maybe parts will ring true to you.

1. The mentor arrives
The mentor doesn’t announce herself. She doesn’t arrive on horseback and blow a bugle to signal her arrival as The Mentor. The best way to describe the feeling of knowing the mentor has arrived is to recognize the feeling of wanting to be led by the person before you.

As David Foster Wallace said… “[A] real leader is somebody who can help us overcome the limitations of our own individual laziness and selfishness and weakness and fear and get us to do better things than we can get ourselves to do on our own.”

When that person arrives, I feel a stirring in my heart and a desire to download that person’s brain. I follow my intuition, seize the opportunity, and figure out a way to do that that is fun for the both of us.

2. Call the mentor into service
There are a few things that I’ve learned about asking for a mentor’s help. We never ask them to be our mentor. This sounds counterintuitive. Sheryl Sandberg writes about this in a chapter in Lean In called “Don’t Ask Anyone to be Your Mentor.” And I think she has a point. Corbett Barr says something similar over at Fizzle. ” In the real world, mentors are usually organic relationships without specific titles, goals or responsibilities.”

We at Switchboard often ask people to help us solve problems during a defined period of time. Sometimes that means informal drinks every month. Sometimes that means having a jam session where we brainstorm a new feature or streamlined a process with a “think tank” of mentors (pictured above with Tom, James, and Jessica). There are many benefits to this approach: a core team is formed, we don’t have to play “telephone” in translating one person’s opinion to another, and there’s an energy of excitement and shared purpose.

We ask for unorthodox favors. For example, I once posted on PDX Startups Switchboard in which I asked if any local founders would be willing to invite me to their all hands staff meetings. Our team had just expanded. I didn’t know how to structure or lead a meeting. As you’ll see from the post, Cloudability’s Mat and Little Bird’s Marshall generously hosted me and I constantly refer to what I learned there.

If we find a mentor who is an exceptionally busy person (like Matt the founder of Metafilter, pictured), we’ll ask them to come in to PIE and give a talk so others in the office can benefit and we can hear the questions that other companies have. We also have many mentors who are younger than us (like Kaori). This is often overlooked. As Bill Nye put it, “Everyone you meet knows something you don’t.”

3. Listen to the mentor
It may seem obvious, but I’m constantly working on how to listen better to my mentors. I’ll vision how I want the time to go before we meet. I say things to myself like,  “I will ask questions that start with ‘how did you…” and ‘what did you…'” “I will listen more than I talk.” “These are the points they made last time I’d like to follow up on.” Larry King put it,  “I’ve never learned anything while I was talking.” Listening, truly listening without looking for the opportunity to respond, is a difficult art.

4. Thank the mentor
This cannot be overstated. Thank. The. Mentor. We do our best to follow up. Whether we work with someone over months or just one afternoon, we make sure to follow up with the outcome of our time together. This is in the form of a quick email. “Just wanted to let you know that the feature we talked about is live!” This makes mentors feel like their time is well spent and there was a tangible outcome to our work together. We send thank you notes and describe how they helped us and why we value their contribution. I once ambushed Guy Kawasaki at a conference and, for that hour, he was an invaluable mentor who gave us input that significantly changed the direction of our product (his thank you card and keyboard stickers pictured). I’ve found that no act of mentorship is too small to be acknowledged.

The full circle of our time as mentees is that we are now called on to mentor in return. And the best way those relationships begin is not with, “Will you be my mentor” but rather “Hi. Let’s hang out.”

 

Mara Zepeda is the cofounder and CEO of Switchboard as well as a mentor at PIE. Find her on Twiter @marazepeda and visit Portland Startups Switchboard to see how they’re helping the Portland startup community.
Advice, Community, Mentors

The Next Year (& Beyond) Plan – Part 1

You’ve had a piece of the PIE… Now What?

As this year’s PIE class wraps up it’s official program and settles down to dig in and advance their products and companies, I thought it would be useful to put together some strategies for thinking about the future.

This two part series highlights the more operational areas of growing a company and supporting the product once it’s launched. It is not meant to be a “how to” but a guide to start thinking and planning best and worst case scenarios.

So what’s your first year plan look like? How should you be thinking about it?

There’s no hard and fast rules about “the right” way to grow and maintain a company except that revenue should exceed expenses to be sustainable. A business plan helps, and those of you who are beginning to look at seed investment will need to at least have a cursory version of one.

Operational Forecasting

It takes money (cash) to launch and continue running a company. From the companies I met with at PIE, many were hitting the VC trail to pitch for Seed funding. An important thing to think about at this stage is until the Seed funding comes in where is the cash coming from and how much do you think you need?

Running models which forecast out spend through anticipated Seed then spend once the check has cleared (let’s say a 12mo. cycle) is going to be helpful. On the expense side this includes travel (to pitch), legal fees, marketing efforts, money needed to support the product (hosting, licenses), insurance and current payroll. One of the bonuses of sticking around PIE after the session has ended is free rent, which alone could save your company five figures this year of expenses, so take advantage!

From here, sales/revenue forecasting (being as realistic as possible). Where do customers (or sponsors, advertisers) 1-100 come in, 101-1000, and what would be an average percentage to use for growth? (I use 3% as a safe metric).

Overlay the expense forecast against the revenue one and you’ve got an initial idea of your company’s break even point, operating costs and revenue opportunities.

I also think it’s wise to run a Plan B scenario where the company doesn’t land funding (we all know it happens) or the lead time takes 2-3x longer than anticipated. Can the company quickly produce enough revenue to be sustainable? How does that affect the growth plan?

Understanding both sides of these scenarios will help inform how the company should operate and where there might be major decision factors to consider.

Goals, KPI Creation & Monitoring

With so many moving parts required to operate a business, it’s important to set goals to measure company performance against. These goals, measured over a set time frame will allow founders and the management team to gauge how different areas of the operations are doing.

A couple of examples of goals and their associated KPI’s (Key Performance Indicators) are:
Increase App Downloads 10% in next month. KPI’s could be traffic/user sources, daily downloads, social media mentions.
Increase Sales on Website 20% over a 3 month period. KPI’s could be daily sales, shopping cart abandonment %’s, and competitive pricing.

Setting goals should inform business decisions in areas such as your product, positioning, pricing, traction in the market, customer service and define areas which need help or re-strategizing. KPI’s are used to drive the actions in these areas.

There are several KPI dashboard tools out in the market which could be worth researching and investing in to help.

Hiring

Allison Krug wrote a strong piece about hiring for startups back in September. Areas I think worth expanding upon are:

Inventory the capacity your current team (I know that sounds terribly Dilbert-esq). Are they fully booked with work, and are there opportunities to cross train which would give both the company an additional skill set and the employee a chance to learn something new? Understanding where your team is now and what they can produce informs your product milestones, roadmap and operational capabilities. Running an OPE (Overall People Effectiveness) model, which supports the Lean Startup methodology, is a useful tool to understand the productive %s of your team.

When budgeting for new hires, if they are full time salaried, add ~22% to the market base salary. This will cover the company’s piece of employee taxes, any benefits given plus on-boarding costs (e.g.: a new laptop). Based on the percentage above every 5 hires will cost the company roughly the equivalent of a 6th employee.

One last (potentially eye opening) note about the realities of hiring, once you bring on a hire as an salaried employee (not consulting) the company becomes liable for part or all of their unemployment payments (in Oregon at least) should the employee file within 24 months of working for the company. The company pays into the Oregon Unemployment Insurance fund through their share of the employee payroll taxes, so take Alison’s advice to heart, make sure your hire is a good fit on all sides!

Next post, I’ll cover strategies about product and issues which could affect you as a founder. Other PIE mentors, it would be great to see additional thoughts and input to what I’ve outlined above!


Kris Pennella is a business operations and product strategy consultant focusing on start-ups to mid-size companies, as well as a mentor at PIE. Find her on Twitter: @littlepots or connect with her on LinkedIn.
Advice, Alumni, Mentors

First Step of Developer Marketing is to Stop Marketing

Developers have a keen ability to ignore most traditional marketing. Including “developer marketing” in this post’s title alone may have raised the hackles of most developers who read it. Yet, developer marketing is necessary for an increasing number of companies.

There are a growing number of APIs, which allow developers to create something new on top of data or functionality created by someone else. As an incredible side effect, many companies have found themselves with a developer audience. Perhaps more amazing are the many companies whose customers are all coders. Marketing to these developers can be difficult for marketers that don’t know tech and similarly tough for geeks that don’t know marketing.

Like anything worth doing, it’s hard work, but I think the approach is fairly simple–it just doesn’t look like traditional marketing.

I’m a programmer, but I’m also an accidental marketer. These days I write more lines about code than lines of code. For five years I tracked API growth as a journalist and analyst at ProgrammableWeb. This background led, perhaps inevitably, to working for API providers.

My approach has three parts, all focused squarely on developers:

  1. Solve their problems
  2. Make their lives easier
  3. Show them off to others

The first seems obvious, yet we’ve probably all experienced a technology solution in search of a problem. To get any lasting adoption from developers, you have to start with a problem. That’s why infrastructure APIs like Orchestrate have become so popular. Developers like unique puzzles, not repetitive work. You can help developers understand the problems you solve by providing example use cases. Write blog posts, tutorials and documentation that inspires developers to see what’s possible.

To feel the maximum impact, your solution should also make a developer’s life easier. It is absolutely possible to solve a problem in a way that becomes difficult to implement. Instead, you want to get them addicted to your simplicity. This is where developer marketing really strays from traditional marketing. To make a developer’s life easier, you need to focus on streamlined documentation and full-featured client libraries. This means you need to write code.

Lastly, make this marketing process repeat with others by showing off your best developers. Create an app gallery with screenshots and links to their website. Write blog posts that tell their story. If you’re pitching press, turn your PR machine toward promoting your developers rather than promoting your product.

These three parts of marketing will endear you to a developer audience. Nobody can raise issues with solving problems, making their lives easier and showing off successful work. Developers probably won’t even realize you’re marketing to them. And in a way, you aren’t.

Adam DuVander, Developer Relations at Orchestrate. Find him on Twitter: @adamd

PIE Demo Day is on October 24, 2014 at 2pm. Click here to join the event livestream.

Advice, Mentors

Marketing Fundamentals – Start with a Message Map/Architecture

Whenever I ask how I can help the latest crop of PIE companies, the answer is usually, “they aren’t ready for marketing help yet.” I get it. I do. You’ve got to build the product, then get someone to test/buy it, then support it, fix it, build enhancements, sell some more, keep supporting it and hiring a marketing person just isn’t the top priority. That’s ok in the beginning, but you still need a marketing foundation to support all your efforts.

Once you’ve figured out what your product or service is, I strongly encourage you to take the time to create a message map/messaging architecture. This is a 1-2 page document that clearly states your key messages. It seems easy, but I guarantee you if you do it right, it will take far more time than you expect. And since, as David Packard once said, “Marketing is too important to be left to the Marketing Department,” (and as we established, you probably don’t even have a marketing department, anyways), get all founders and key employees involved.

My advice to expedite the process and make the meetings more productive is for each individual involved to create a draft on his/her own before coming together. This will give you something to start from, avoid one strong individual dominating and drowning out other good ideas, and ensure more buy in across the team for the final product.
There are a number of different templates you can use (I’ve provided a couple examples below and there are others available online), but I’d start with a general one that answers three basic questions:

  • Who are you?
  • What do you do?
  • How do you do it?

You should be able to answer each of those questions in one sentence. Once you get those sentences down, write down 2-3 supporting messages that clarify your main message. Watch that you aren’t simply restating a message from a different cell using slightly different language. And think about how what you are saying differentiates you from competitive products and companies. If you think your competitor could say the exact same thing, you need to keep working. Finally, if you have any proof points, list those. For example, if you say industry leaders have adopted your technology, list those companies. If you say you are a “recognized leader” and an analyst firm has named you a cool company or added you to some list, put that down. In the beginning you probably won’t have many proof points, but these are important, because they give reassurance to people who are receiving your messages that there is substance behind the words.

If you’re really ambitious, you can go a level deeper, and create a message map for your product(s) – this will be more specific than the company one, but should follow the same guidelines. What is the ONE thing you would want a prospective customer to know about your product if you were only allowed to describe it in one sentence (Main message)? If they then granted you the ability to explain further, what 2-3 sentences would you want to say (supporting messages)?

I’ve gone through this process at every company I’ve worked and with a number of non-profit organizations. In every case, we’ve gone back and forth, debating nearly every single word. And almost every time we’ve had to pause, let it sit and come back a few days later to resume and polish. It’s exhausting, but in the end, totally worth it. Because the final document will provide the foundation for every communication vehicle going forward – your website, elevator pitch, sales presentation, collateral, etc. You’ll find that you and your team are consistent in how you describe your company and product(s) and clearly articulate what sets you apart from others in the market.

 

sample templates

Bill Piwonka is the CMO of Exterro. Find him on Twitter: @bpiwonka

 

Advice, Community, Mentors

10 Hackerish Partnership Tips and Observations

Swiss Army KnifeI’ve served in business development and product roles at four startups—two in California and two here in Portland. If I count the digital media group at the LA Times, I can call it five. I also headed up new business development for Knowledge Universe, where my job was to look for new business lines for the billion-dollar education company. Given these experiences, and given that I’m a closet lawyer, I consider myself to be a Swiss Army knife of all things business and partnership development.

Here are 10 simple tips and observations, in no particular order, that might be useful to you:

1. Term and Termination are the most important terms in your deal. As a startup, your visibility into the future is very limited. It’s certainly not uncommon for strategies and priorities to change several times in the first two to three years. When negotiating contractual terms, term and termination are arguably the most important terms. That Fortune 500 company deal may sound good early on, but you may regret it later. Always keep your wiggle room.

2. There is often a fine line between partner and competitor. Always keep in mind that a partner may be considering doing what you do, and vice versa.

3. Play dumb sometimes; but in a calculated way. A big part of business development is gathering information. There is an art to this and sometimes asking naive open-ended questions with a friendly tone will get people to open up. I never cease to be amazed by what I can learn from people this way (related to #2 above).

4. Create a chip that you can later give away. I like to say “no” to things I ultimately don’t care about. A common example is the choice of venue & law clause. In many cases, this is an important issue for larger companies. By digging in on this issue early, you can give it up later in exchange for something that you truly care about. (By the way, often venue/law is very important, it’s just an example to make the point.)

5. Create a “Form Contract.” In certain contexts, it makes sense to make your contract look like a form. By a form, I mean it looks like something that could be printed on carbon paper. I even like to say, “I’m sending over our form contract.” This may sound like a cheap trick, but I’ve been able to short circuit the redlining process using this approach. Again, this only works in certain contexts.

6. Use the damn phone. Lots of startup-types seem to rely too heavily on email. When discussions slow down, pick up the phone and leave a nice message. You will save time in the long run.

7. Listen to earnings call. If you are dealing with a publicly-traded partner or competitor, and want to learn some good stuff, listen to earnings calls. The best part is always the relatively unstructured Q&A at the end. That’s where you will hear the good stuff.

8. You may finish with a different person than you started with. In long negotiations with big companies, turnover may slow you down. I can count at least 15 times where I’ve started negotiations with a partner that ended up being handed over to the “new guy.” It’s always good to try to pull additional people into calls and meetings so you aren’t lost when someone leaves.

9. Be a pest. You may not be the top priority to your potential partner. As I mentioned in tip #6, don’t let a week (or two) go by without touching base by phone. Obviously, there is a way to be a pest without being pesky.

10. Don’t be cheap, and pay for an EchoSign account. If you are doing deals in any kind of volume, you need an electronic signature service. There are other options beyond EchoSign as well. You will save a hell of a lot of time—plus your contracts are all stored, organized, and searchable. At OpenSesame, we have licensing partnerships with more than 400 content publishers. I don’t know how we would otherwise manage this type of volume.

Are there partnerships you’re currently working on? These hacks are simple, but they’ll pay off as you develop relationships with other businesses.

Tom Turnbull is the cofounder of OpenSesame.com and MeetTheStartup.com. Find him on twitter, @tomturnbull.

Advice, Community

Presenting 101 — a few tips from Mike Pacchione

With demo day looming, PIE startups have already begun to experience both the joys of pitching and the pain of critical, straightforward feedback. We’ve received insight on the topic from a variety of mentors, and that’s just the beginning of the program’s pitch phase. Earlier this week we had storytelling expert, Mike Pacchione, share presentation basics with us.

But before we get into takeaways from his talk, check out this product pitch:

Interesting?! Errm…yeah, not really. Confusing/boring? Absolutely…which brings us to Mike’s first tip.

1. Understand that people are emotional

Mike shared with us that in order to connect with listeners, your pitch needs to go through the emotional part of the brain first (like a filter) before the listener will appreciate the logic behind it. I don’t know about you, but that pitch about the Turbo Encawhatever did NOT go through the emotional part of my brain so I never felt like I really needed to check in and even try to understand what was going on—plus, that dude was complicated. The problem is that the same thing happens with startups—most speak with abstract terms, speaking from logic to logic, and that’s where most communication falls short. Don’t start a pitch talking about your feature list, start it with a pull on emotions.

This, friends, is where stories come in…

2. Follow Duarte’s sparkline when structuring your story

Mike works for Duarte, a cool company that specializes in presentations and storytelling. (Psst—I even stumbled across his company profile.) Duarte’s CEO, Nancy Duarte, found a pattern among the best presentations, and when she drew it out, she came up with the following:

Duarte’s sparkline

Duarte's sparkline

The key here is that you’re trying to build tension throughout the entire presentation and you do this by consistently challenging what the audience is currently experiencing and believing. This outline can be mapped over Steve Jobs’ iPhone unveil in 2007 and over Martin Luther King Jr.’s “I have a dream” speech, and yet it’s one that you too can follow when you’re going through your presentation.

Let’s walk through what a startup pitch could look like using this same format:

a) What is…it like in the world today? As a tech startup, you might begin by painting a picture of the problems that people deal with in the absence of your product. What pain is your potential customer experiencing? This will not only help your listeners engage with your presentation on an emotional level, but it’ll keep them at the edge of their seat wondering how you’ll solve the problem and make everything better.

b) What could be…if your product was funded and introduced to the world? Show the contrast between a) what is and b) how much better the world is for those who use your product. This is an important moment. Do everything you can to help them understand how much of a difference this is from current circumstances.

c) What is…your competition doing? Your audience might have doubts in your product. They might wonder, “wait, isn’t someone already doing this? Is this the best solution on the market?” So follow them back through that. Show them where your competition is and where they fall short.

d) What could be…if you choose our product instead. (Here’s where you tell them why yours is better.)

Now that was the quick and dirty version and there are a couple more embellishments to it, so if you’re interested in learning more about the sparkline, here’s an excellent video from Nancy Duarte herself: Check out this video to learn more.

3. Practice a little bit every day.

If you’ve ever studied for a test the night before an exam, you’d know what it feels like to cram. It’s so much more effective (and I’m sure healthier) to understand your story, recraft it, and memorize it over the course of a few weeks than in a few hours. This tip seems obvious, but it’s not often put into practice. Devoting even just 30 minutes every day to constructing and practicing your pitch is much better than spending 4 hours the night before demo day. [Did you hear that startups?]

Practice starts today. “Let’s go, go, go.” [whistle blows]

Advice, Community, Mentors

Five questions with Duncan Davidson, Bullpen Capital

Duncan Davidson, Managing Director at Bullpen Capital, visited PIE today and shared valuable advice to all of us in the space. While all the startups asked him questions related to their specific businesses, I simply wanted to learn more of what it’s like to be on his side of the table. I didn’t pitch him, but I did ask him five simple questions.

What’s your most recent investment and what was the tipping point that convinced you to go all in with them?

Good question. [Yay, me! Starting off strong.] If I go through the last 5 deals we’ve done, they all have similar tipping points. Here’s a couple of those.

a) SpotHero, a parking company out of Chicago.

Parking is suddenly a hot category, and there’s a bunch of valet deals in San Francisco. SpotHero’s like Uber for parking spots, where they have deals with national garage chains.

We knew parking was big. We’ve watched parking for years. SpotHero was showing two things that was a tipping point.

i) They cut national contracts so they could go to almost any city with masses of available parking slots and parking garages (and with no extra work). They don’t have to go slug city by city.

ii) Their trajectory was taking off. Most of the other people we saw were struggling. We liked SpotHero’s trajectory.

b) StayClassy, a Saas for .org

Again, there are five other companies trying to do this, but it was theirs that had a trajectory that was taking off. That’s a common theme for us. We’re watching companies like they’re in a competitive horse race…when one takes off, that tips it.

What’s your process look like? How do you actually go about making that decision with the others in your firm?

Somebody comes in and pitches us. Everyone wants to show a demo and how cool their technology is. No, no. We don’t care about your demo. We want to see what’s your business, how well you’re doing, how fast you’re growing, and what’s your plan for the next year.

We start with a fact based–”here’s the reality of the business” approach. If you don’t get passed that filter we don’t take any more time on it.

Then the process after that is to have you answer a few very fundamental questions. We throw questions up at the person driving it. If they can knock the questions off, we go to the next five questions. When we’re out of your questions, we regroup and make the decision.

If we’re following a category (like parking), then we’re already well educated. So when a company walks in the door and shows they’re winning in that market, we can make a fast decision. If it’s a market we don’t know well, we either don’t do the deal or spend a lot of homework (and it’s a very slow process) until we get up to speed.

One of the mistakes venture people make is the grass is always greener. In a market we know very little about, everybody looks like a pretty girl. In a market we know well, everybody’s an ugly chuck. So we’re better off dealing with the ugly children than the pretty girls just because we have experience to tell us what they don’t know.

How do you interact with the founders after investing?

We have two types of founders. One type are experienced, they know what they’re doing. Our interactions with them are occassional and usually on-demand. If they need help, they call us.

We have another class which are newbies—in their first time through—and they just have to learn things. “How do you run a good executive meeting, how do you run a board, how do you deal with problems A, B, and C?” So in that case, we’re a lot more proactive in helping them through their problems. When we talk to the people that we deal with, they almost say the same thing:

“You’re not in our face like a lot of venture people, but you’re there when we need you.”

You’ve been on the other side of the table before–as the founder of a startup with a successful exit. What is the one thing startups should know when looking for investment?

You’ve heard of the three rules of real estate, right? Location, location, location.

For example, you’re McDonalds—where do you put a fast food joint? You find the best traffic pattern.You want a house? There’s a certain logic to why that house is the right house on the street and the next house is the wrong house. Location is everything.

Likewise, there’s four rules of venture capital. Ready?

Too early, too early, too early, too late.

The one thing to know, people, is timing. Timing is everything. All startups build on the shoulders of past technical development. There comes a moment where the technology comes together and coalesces–then new things can happen. If you’re too early, then it’s too expensive—you’ll never get there. If you’re too late, you’re not Whatsapp that’d already sprinted past you. So getting that timing right—when the coalesce of opportunity and technology hit—jumping on it fast is everything.

What do you know / have you heard much about the Portland landscape? What’s the startup culture look like to you compared to other places?

Startup culture is a type of culture that’s prevailing the world. I go to Australia, I go to London, I go to Japan, I go to Singapore and Turkey—you find that the startup culture is pretty much the same. They can read all the same blogs, like TechCrunch. They’re all taking hipster styles. There’s a commonality.

Thomas Friedman, from the New York Times, wrote a book called, “The World is Flat.” It’s actually not true. The world’s actually very spiky. But if you go from spike to spike, like Bangalore to Singapore and you skip over all the places in the middle, it all looks the same. It’s spiky, but there’s a consistency. So when you go from startup community to startup community, they’re similar all over the world.

I find Portland to be very similar. The people are technically really smart, they’re versed pretty much in what’s going on. Their understanding is pretty good. The bad part is that this is a very thin ecosystem—the depth of mentors, the depth of funding, the depth of other people challenging you.

There’s a reason why steel concentrated in Pittsburg and cars in Detroit. There’s a reason why Hollywood is where the studios are. And the reason is, there’s a certain economic force to get all the best people in the same place where they can deal with each other face to face. So people come to Silicon Valley wanting to be king of the hill and deal face to face with the best people they can. That sort of thing is almost impossible to replicate.

The main problem with Portland is you could have a very good startup culture, but you’re never going to match what’s down there. The answer is two fold:

a) either accept that and just do really cool companies (and maybe they get funded in Silicon Valley), or
b) find something unique in the Portland ecosystem that you can be the world class center of. You have some skills here to do that.

Seattle may become the cloud center because Amazon, Microsoft are there. I think of Portland as the new Tuscany. Dealing with different food ideas, craft coffees, beers (you’ve got the great Hops here). You’re in the magic latitude for hops and things like that. The point is: food. You might be the great advances in food if you want to be.

Or another is you have cheap energy here. You could become a great data-center / cloud place. You have economic advantages for that. If I were in the Portland community, I would try to figure out what we could do better than anybody else in the world, own that, and become the place that attracts people from all over the world for that because you have a great city, a great lifestyle, and a lot of educated people here. People want to live here.

Well, Portland…what do you say? The new Tuscany of the States? The data-center capital of the West? What makes Portland so unique? Let us know with a comment below.

Advice, Community, Mentors

[Updated] How to hire for cultural fit.

Company culture is all the rage in PDX startup land. It’s incorporated into hiring processes and strategic planning meetings. There are even full time jobs dedicated to ensuring the success of a company’s culture. When you’ve got an intimate staff size that’s in the single or double digits, every new employee makes a difference, shifts the vibe, rocks the boat, changes at least one person’s job duties—all of these hopefully for the better.

Considering the high cost of turnover and awkwardness of employee relations issues, it makes perfect sense why startups place equal if not higher value on a culture vs skillset match. After all, a defining trait of working at a startup is that we hang out with our coworkers both in and out of the office – so these new hires had better be people we love.

The challenge is how do we ensure that we’re hiring someone who has mad job related skills AND will slide seamlessly into our group of crazies. Below are three steps for assessing culture fit and determining just who might be wo/man enough to join your nerd herd.

1) Start with identifying the culture.

Culture means the feel of a business vs the hard facts. Having a solid definition of what it feels like to work there is the first step in making good hires.

How I describe startup culture to friends, family, future coworkers:

  • The 3 C’s. Creativity, curiosity, crazy are required.
  • The 3 I’s. The recipe for a solid foundation is information + innovation = invention.
  • Lovers of ambiguity, hard/unforeseen problems, voicing opinions, post midnight emails work here. Their talent is vast and uncontained. They are inspirational. And they are all hilarious.
  • Recognition for both successes and failures happens on the regular.
  • There may not be a 401k, a career ladder, or even a job description. But employees can wear flip flops, bring their cats to work, come into and leave the office when they feel like it, and the startling abundance of free food and drink correlates directly to the free yoga and exercise options that are part of the total compensation package. Think perks vs benefits.

It’s important to figure out what your culture really is so that you can talk through it with prospective employees. Nothing in place? Start with polling your staff, your execs, people in the community who know you. Ask them how they’d describe the people they work with and the overall vibe. Ask about the perks vs benefits. Ask about what landed them there and why they stay.

2) Follow it up with identifying the true job need.

The focus here is to be adding new positions gracefully, thoughtfully, sustainably—not just because “holy shit we need an Ops guy Dev Ops Hero NOW” that may not be needed in one month. This is important in terms of presenting an accurate portrayal of not only the job you’re interviewing someone for, but a *culture of transparency.

Prep internal constituents:

In order to keep a culture chill. Be as open as possible about the process to alleviate confusion around a hire. Be certain on the full time/part time/permanent/temporary status of a needed position. Talk it over with staff so they’re in the loop on what potential new person may be coming on, and what this will mean for a person/team job-wise. Even the tiniest of heads up can head off staff revolt. This is particularly important for those who will be meeting prospective candidates. The goal is for employees to feel well informed and fully comfortable talking about this new opportunity with the interviewee across the table vs “yeah, I guess we need a front-end dude dude/dudette, that’s what they told me this morning.” Current staff contributes to a big cultural first impression.

External constituents:

Let’s be honest, startup jobs ebb and flow constantly. Re-orgs, or shit—just ‘orgs’—happen all the time. It’s our hiring responsibility to convey the job needed at the time of the interview, discuss potential evolutions of said job, address stability as best we can, and simply put: be transparent.

By disclosing everything we know about an open position at that very moment with staff and candidates, we fill in all of the blanks. This way staff is onboard and willing to participate in the process if necessary, and candidates don’t have to piece together the details of the job, which can breed confusion about the culture. And in some cases even result in declining an offer.

*If being transparent about the job/culture is a challenge – be open about the lack of transparency. No surprises. And then work on improving transparency. That may very well be my next blog post topic…

3) Assessing potential new coworkers.

Ask good questions. Listen listen listen, way more than you talk. It’s amazing what people will say if you just… listen. Have a short list of broad ideas on what you hope they’ll say. Have an even shorter list of dealbreakers. Notice how you feel about each answer, take the occasional note, but see if you can get a good read on your intuitive response to what a candidate is saying and how they are saying it.

A few culture-related questions:

  • Motivation: why are you here? what motivates you outside of cold hard cash? have you ever felt unmotivated – what happened, how did you respond, who besides you was a factor, and what did you learn? what has been your greatest nonverbal reward?
  • Victories and losses: what are some of your greatest triumphs and greatest challenges that you’ve had in your career? how do you know when you’ve nailed it or blown it completely? at what point do you ask for help? what is your recovery process? what is your celebration process?
  • Playing well with others: how would your best and most challenging boss, coworker describe you? list a few characteristics that you need from a boss/coworker that would be a dealbreaker? who have been some of your most inspirational bosses/coworkers, and why? how/when do you know it’s appropriate to speak up, or tag in and help a coworker?
  • The job: what excites you about this opportunity, what made you apply? do any of the responsibilities make you feel anxious, and if so, what would you need in order to feel confident about your ability to handle the job? how does this role compare or contrast to what you’re currently doing, and on that note, what is motivating you to consider new opportunities?
  • Logistics: what would we learn about you in a few months that we wouldn’t know about you on day 1? what is your preferred communication style, favorite color, most influential person in your life? are you a morning person vs night owl? how do you kill time when stranded at an airport?
  • Questions for you: ask them to ask you anything. Hope that they will have something to ask, be ok with if it they don’t. If you’re comfortable with it, share your contact information so that they may follow up with you directly if questions arise post interview.

Making the decision…

Keep it simple. Just like culture is a feel, a candidate will leave you with the same. A feel, a gut vibe response. Remember that they are sizing up potential culture fit as much as you are, so all you can do is present a clear picture of what it looks like at your company and hope for a good match instead of forcing it to fill a role. Take the extra time to ask non job specific questions. Read the resume, check the references. When it comes to give the thumbs up/down, don’t second guess yourself and don’t get bogged down in analyzing or quantifying specifics. *Pay attention and give voice to your gut vibe – it’s (almost) always right. No arguing.

*This applies not only to hiring but to all life decisions.

Update:
Note from the Editor: This post has been edited to suit all audiences, as was the author’s original intent. We believe in the importance of fostering and promoting diversity and inclusion not only at PIE, but in the greater Portland startup community—beards or no beards.

-Kirsten Golden, Program Manager