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PIE 2018: What experiments are we cooking up next?

Looking back at 2017, PIE managed to accomplish quite a bit. Even if we didn’t feel like we did. In fact, we only realized what sort of progress we had made because we had taken the time to publish a list of objectives for 2017, and that gave us a yardstick to measure our accomplishments. With that list as a reference, we had to admit that we’d made progress. Which is probably why people make lists.

Bear in mind, we’d made mistakes, too. And failed. But that’s all good in our book.

In that same vein, we now want to have a list to consult in 2019, in case we’re burdened with a similar sense of un-accomplishment. So we thought it might be beneficial to share some insights on what PIE is working to accomplish in 2018.

Besides, it helps keep us honest. About both successes and failures.

As with last year, all of these thoughts come with a caveat:

Let’s be honest. Talking about the past is a lot easier than guessing about the future. Regardless of how sound your strategic thinking. All we know for certain is that we’ll continue experimenting. Because that’s what we’re best at doing. And it’s in our name.

With that in mind, here are some of the areas where the PIE team will be intentionally focusing our time and energy this year.

NOTE: In the spirit of brevity, we’re just going to lightly touch on some of our objectives. Not go into great depth. Because we recognize that each one of these topics deserves a post of its own. And those will be forthcoming. But that desire to provide more detail has simply been preventing us from getting this post out the door. So we’ll work to flesh out each of these topics over the coming weeks.

  1. Build an hors d’oeuvre section to the PIE Cookbook. Following a successful Kickstarter campaign in 2016, PIE completed the initial version of the PIE Cookbook in 2017. It’s become exceedingly obvious, however, that consuming that entire book is a difficult first step for many folks. It’s way too daunting. That, of course, was not the intent. The intent was to demystify accelerators and to make the concept more accessible. But that clearly requires something that is easier to consume. So we’re going to create something more accessible that helps you quickly determine if you’re ready to start building the accelerator of your dreams before you have to dive headlong into a ton of content.
  2. Experiment with a nonprofit model for PIE. We’ve tried for profit. In fact, we’ve experimented with that model for nearly a decade. But there’s one small problem. PIE is not driven or motivated by profit. We’re driven by purpose. So it’s time for something new. Becoming a nonprofit might not be the right thing to do, but it’s an experiment worth pursuing. If only to help others understand the pros and cons.
  3. Build an accelerator that is more authentic for our startup community. A lot of what PIE has done in the past has been based on prevailing and accepted accelerator models. And to be honest, those models have both structure and artifice that only works within certain environments or with substantial resources and partnerships. We don’t have those same resources. And Portland isn’t the same kind of environment. So we’re reimagining what a Portland-flavored startup accelerator could and should look like. We’ve already got some good ideas about what that might mean. And we’re looking forward to putting those ideas into action in 2018.
  4. Build out a physical space that can serve as a hub for early stage founders. Many of our conversations in 2017 centered around the absence of PIE as a physical space and how that vacuum was negatively impacting the startup community. The prevailing feedback hinted at the role PIE had played from 2009 until 2015. As a center of gravity. So in 2018, we’d like to get back into the role of being that hub. And being the open front door and welcome mat for new founders. And to do that, we’ll need physical space.
  5. Return to building better founders. One of PIE’s founding tenets was “Build better founders.” To us, that meant that we were more interested in helping people than companies. We didn’t care if the companies succeeded or failed. We cared that everyone in the PIE family—founders, mentors, investors, partners, and staff—would be better off for having participated. Our shortcoming? We only focused on the business aspects of making founders better. In hindsight, this was a mistake. So this year, we’re looking to focus holistically on building better founders. From mental health to community engagement to family support, PIE is going to build the best founders we can.
  6. Begin building better staff. One of the biggest mistakes I’ve made with PIE in the past is not providing effective and clear paths for the staff to move into leadership positions within PIE. While we’ve provided opportunities for professional growth and enabled staff to propose and execute different experiments, we’ve failed to give them upward mobility. Admittedly, part of this was due to the fact that I didn’t even really understand my role. But whatever the case, this was on me. To make the model sustainable, that needs to change. This year, we are likely to have several opportunities to provide upward mobility for PIE staff. And as we learn how that works, I hope that we can add guidance to the PIE Cookbook about how to more effectively engage and enable accelerator staff to grow into accelerator leaders.
  7. Expand the PIE family with a new class of startups. Once we secure physical space, we’re going to need some activity in that space. And some people. And startups. I mean, if we’re rebooting this whole thing, let’s reboot it. So if you’re building a startup and you think PIE could be helpful, be on the lookout for a whole new PIE application period opening this year.

That sounds like a lot. But it sounded like a lot last year, too. And we managed to complete all but one of those objectives. So we’re tentatively optimistic that we can get it done. Will we succeed? Who knows? But we’ll experiment. And fail. And maybe succeed. And we’re hoping you’ll continue to stay tuned as we do.

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.