Feel the Boot

In this year-end installment of Feel the Boot, I want to, not surprisingly, look back at 2020 and also talk about some of the ideas I have for where Feel the Boot can go going forward.

When I thought about this episode, the first thing that came to mind was the "I picked the wrong week to stop sniffing glue" scene from Airplane!

For those of you who aren't familiar with that reference, check the Wikipedia article. https://en.wikipedia.org/wiki/Airplane!

A time of transition

This year has been kind of a train wreck for almost all of us, and it made me realize how much privilege I have personally. I know many people who are having a rough time while I'm up here on a mountaintop with a beautiful view, a vineyard, and naturally isolated. Plus, I've been working from home for years, so not that much has changed for me.

The reason I thought about the "Picked the wrong year to quit sniffing airplane glue" is that at the beginning of this year, I chose to leave my job after 24 years. I founded Anonymizer in 1995, eventually exiting through an acquisition. I became the Chief Scientist of the company that acquired mine, which then got reorganized. I ended up doing PR for the company, public speaking, running the marketing department, and helping with sales and technology, all kinds of different jobs and roles. But fundamentally never had to jump off that cliff, as I did when I first started Anonymizer, until January 1 of this year. I decided to leave a job where they treated me very well and paid me well to go full-time with Feel the Boot, helping startups, advising mentoring, and Angel Investing. Of course, that meant I walked away from my entire income stream. Angel Investing is not a short-term returns kind of activity. Also, I don't charge for my advising. So, walking away from my paycheck was scary enough without doing it in a strange year like this. It wasn't just the risk of taking on this new role and focusing on this new kind of activity, but then there was the covid crisis, the pandemic, the lockdowns everything got transformed.

As usual, we had fires. I live up here, north of San Francisco, where the fire seems to come through every year. Fortunately, I didn't get evacuated this year. I got evacuated. In 2017 and 2019, but not in 2020, going against the pattern of things this year. The fires only came within a couple of miles of me, but I was able to wait them out at home. I had to use industrial Quality Air Filters to go outside, but even so, we did better than in some of the previous fire seasons.

New roles

With this new focus on my advising activities, I took on some new roles. One of the things I'm doing now is chairing the selection committee at the North Bay Angels, which means I am in charge of looking at all of the companies applying to get funded and deciding which ones get to go through to present to the group as a whole. It is a severely narrow funnel. We might get 30 applicants in a two-month cycle. The committee will look at maybe 15 of them, with the rest dropped right off the bat. We pick five or six to present to the committee, and the committee then selects two or three to pitch to the whole group in that two-month cycle. That's why I talk so much about fundraising and how competitive it is. Many of the companies we reject are good companies with sound business plans.

One change we made this year is looking at companies from a much wider geographic area because of things like zoom and the fact that people don't need to travel to present to a group. Now it's not a hardship where someone needs to fly out to Sonoma for a chance at funding. They just need to show up for a quick Zoom meeting. Rather than being exclusively Bay Area focused, the North Bay Angels is now looking at applicants from anywhere around the country. The dissolving of geographical borders is a big trend in the investment community right now.

The other activity I have taken on this year is becoming a global entrepreneur in residence for the Founder Institute. With them, I provide advice to the companies in their program anywhere around the world. Founder Institute is a global organization with chapters in 90 countries. I might have office hours with someone in Toronto, and then the next call with someone in London, Sydney, Cape Town, or Hong Kong. These days I open my sessions by guessing whether it's day or night by the light in their room and then asking where they are. It's fascinating to see all the different kinds of businesses they're launching relevant to their specific geographic areas.

I'm finding that this Covid lockdown environment has been a real boon for my ability to engage with the startup community without regard to driving distance. Before this, I would usually have to go down to San Francisco for most activities. That's at least an hour drive in good traffic, and it's rarely good traffic, to attend a meeting for an hour or two and then drive back. So I didn't do that very often. Whereas now that I can just jump on the zoom, I'm going to tons of these kinds of events. They give me exposure to a much greater range of companies in different situations doing different types of things. Those experiences informed many of the videos I created this year.

Most frequent advice of 2020

I don't know if it's something about the plague that we're having, but I've noticed that I seem to be giving two pieces of advice more than I ever remember doing before. The first is about the need to focus on talking about what your business is. More than ever, I'm seeing pitches laser in on some technical aspect of the business, or diving into jargon, and skipping answers to the big picture questions.  Who are you doing this for? Why are you doing it? What is the business? How does this make money? Why do people want to pay for it? I need to understand these big dumb picture items before I can appreciate the subtle aspects of exactly how you're accomplishing what you're doing or what's unique about your technology.

The other theme of my 2020 advising has been narrative. Convincing people that they need to spend more time telling stories. They present a lot of facts, and they've got compelling data, but it's hard to digest it and contextualize it when it's just presented in that raw form. I think most of the companies I'm looking at would do much better if they could tell a story about their customers, the problems they're having, and why engaging with this product will benefit them.

I am not sure why those two are coming up over and over this year, but it's definitely a pattern. I'm curious to see whether that continues into 2021.

Feel the Boot going forward

Speaking of 2021, I think we're going to be doing some reorganizing of the Feel the Boot content. Starting off, I only had a couple of episodes, so the blog format worked well. Now that I have 40+ episodes recorded, and by the end of next year it'll be a lot more, we need to find ways of making this content more accessible. We must ensure that when you come in looking for an answer to a certain kind of question, you can immediately find the episode or the blog or the content that's relevant to what you need to know as opposed to digging through them all in chronological order. So I'm going to be spending more time thinking about how I can curate the information to make it more useful.

I'm also considering creating more of a course like structure. Rather than just having an episode on whatever topic occurred to me after talking to some founder, I could try creating a series on getting started, finding product-market fit, doing experiments, or what have you. The episodes would flow together in a logical way to create a program Founders could go through, for free, to take them from point A to point B. From getting their funding rounds, or not getting their funding rounds and bootstrapping their way up, to eventually reaching whatever level of success they're shooting for.

I also think that it might make sense to start pulling this together into a book, so one of the projects that I'm going to be looking at this year is whether I can take all of this content that I've created and distill it down into a volume which would provide that clear roadmap of progress making it much easier to find or refer back to relevant information when experiencing particular problems as you go through different phases of growth.

Finally, your feedback would be invaluable in helping guide our direction. What kinds of content would you like me to create? How can I, and Feel the Boot, be maximally useful to you as a Founder? What kind of problems are you having? What kind of information or answers are you unable to find in other places? Many other people are writing and blogging on these topics, but you're here for a reason. How can I make this more effective and productive for you? Let me know what you like, what you don't, and how I can improve.

Watch the video version here.

Or read the blog here.

I want to talk about a different way of thinking about your competitive environment. It's been resonating with a lot of the people I advise.

I talk with a lot of founders about their competitive environment. Usually, that starts in the context of helping them with their deck. They're often in the process of putting together that all-important competition slide, which shows how they stack up against the other companies in their space. Inevitably, it shows that they're superior and puts them in the upper right quadrant or gives them all the little checkmarks down the grid. But one thought that occurred to me during these discussions was that your competition isn't just the other companies in your space.

Fundamentally, your competition is absolutely everything else in the world with which your customer might need to engage. Although you might be better than their existing solution, they still might not choose to buy your product. So often, I see companies where the competition is Microsoft Excel. They've created a solution targeted at some particular vertical that is far better at solving this problem than Excel, so they think: "well, of course, people are going to want to switch to us. We're going to save them money. We're going to save them time we're going to provide whatever benefits we've got." And those are all true statements. But the problem is, will the customer engage? Just because you're better doesn't mean they're going to buy.

Why won't they buy? In many cases, it's because they have too many other priorities. A company or the purchasing manager only has so many hours in the day. They have a limited budget to start these things. They only have a few people free to work on new projects and finite mental energy to even think through these issues. It's not just a matter of being better than what they're doing. It's a matter of being able to rise above that level of noise and get on the priority stack at all. Of the thousands of things this person could potentially do, they will only act on maybe 10. How do you get to be one of those 10? That is why any other thing they could spend time attention money on is a competitor to you.

When you're thinking about the question "how much do people want my product?" it's not enough to say it will save them money or produce some sort of beneficial outcome. You need to show that this is a big enough problem for your customers to put it at the top of their priority stack. People talk about a solution needing to be much better than the alternatives and addressing a substantial need. It's not because what you're doing isn't better. But if it's not a whole lot better, it will not lose to your direct competition, but rather to the fog of war that's going on all the time and all the other things people need to do.

I'm encouraging the people I advise, and I'm encouraging you, to spend a lot of time talking to potential customers. Understand the problem set, understand what other priorities they're dealing with. Make sure before you invest time and treasure into your own business that you meet the threshold where people will put you above the set of priorities that they were previously considering.

I would appreciate your feedback on this shorter and more casual blog/episode format. Please leave a comment down below to let me know whether you like these shorter episodes or whether you'd like me to stick with longer, more formal episodes that I've been doing in the past.

Until next time ... Ciao!

I first interviewed Che Voigt a few months ago. He is chair of the North Bay Angels and co-founder and CEO of Altwork.

If you have not already listened to that episode, you can get it here: https://ftb.bz/32B

At that time he was getting ready to release a new version of his product right in the middle of the COVID crisis. Little did we know that all his plans were about to change. Shortly before the launch, Black Lives Matter protests broke out all over the country. Out of respect to that situation, Che had to radically alter his approach. We started this interview by looking at how he adapted to that rapidly changing situation. We also talked at length about raising angel or venture capital, when it makes sense, what kinds of companies are suitable for it, and how the fundraising climate has evolved.

Che has thought long and deeply about all aspects of the startup process and shares many of his profound insights in this interview. Enjoy!

Have you ever been in a situation where you’ve had to sign a contract that prohibits you from sharing information? Or, have you heard of such contracts? These agreements are referred to as non-disclosure contracts, and they are just that—preventative measures that people or companies take to forbid individuals from sharing information that they deem secret. That information might be personal, such as an assistant that works for a famous person, or they might be related to the operations of a company, such as tech that’s been developed and is proprietary. Whatever the case, the non-disclosure agreements are important to understand, not only what goes in them but what will happen if you violate one. For example, many of these agreements will cover what you need to do should you receive information, such as paperwork, related to the secretive item in question. What other elements go into non-disclosure agreements? This graphic offers insights.

When I founded Anonymizer, I struggled with selling and marketing our solutions. I want to talk about how I overcame my engineering and science habits and prejudices to become effective at sales and marketing.

 

Selling does not come naturally to most technical people. From a cultural perspective, we see it as a “bad thing.” Engineers typically dislike being sold and don’t want to sell. It is a bad word. However, selling is a core responsibility of any founder. You need to do it all the time, in many contexts, and do it well if you want to be successful.

 

I want to help you by sharing a mental framework for approaching sales and marketing that worked for my technical/scientific brain. It worked well enough that after Ntrepid acquired Anonymizer, even though I was chief scientist, they had the marketing department report to me.

Watch this as a video https://ftb.bz/43V

Read the whole blog: https://ftb.bz/43B

Join your fellow founders over at the Founders Alliance group on Facebook https://ftb.bz/alliance

I recently talked to serial entrepreneur Johann Moonesinghe about his experiences as a founder and investor. He was one of the first people in the country to try equity crowdfunding, focused on restaurants.

He actively invests in and advises tech startups through TechStars and directly.

We talked about how the COVID crisis impacted restaurants and other startups, and the common elements among those that are surviving.

He shared his experience as a gay minority founder and the importance of mutual community support.

Finally, we dove into his process in choosing what companies he wants to invest in and his advice to new entrepreneurs.

Get the podcast here https://ftb.bz/podcast

Johann recommended:

StartOut Growth Lab - LGBTQ+ focused accelerator https://startout.org/growth-lab/

TechStars Accelerator https://TechStars.com

LinkedIn (don’t forget the obvious tools) https://LinkedIn.com

In my recent interview with Joy Hermsen, we talked about a wide variety of issues and ideas critical to entrepreneurs, including finding mentors, startup survival strategies, how training for triathlons relates to entrepreneurship, and getting or giving frank feedback.

Joy’s experience in business and from teaching entrepreneurship and leadership shines through in this conversation.

Bio:

Joy Hermsen is an educator, connector and strategist who loves to help aspiring doers do. Of all the roles she has had over the years, teaching Entrepreneurship and Leadership is her favorite, allowing her to draw on her experiences as a founder, intrapreneur and “Chief Activator” in organizations large and small. As Statewide Director of Retail/Hospitality/Tourism for Economic/Workforce Development at the CA Community Colleges, she connects industry to students and campuses across the state. By asking direct questions such as “Why not?” and “What are you waiting for?” Joy has managed to annoy some and inspire most.

Links:

Blog https://ftb.bz/41B

Podcast https://ftb.bz/podcast

Website https://FeelTheBoot.com

Feel the Boot Founder’s Alliance https://ftb.bz/alliance

Joy’s recommended resources:

Sacramento Entrepreneurship Academy https://www.sealink.org/

Marketplace https://www.marketplace.org/

Kaufman Foundation https://www.kauffman.org/

Intelligence, skill, and hard work are necessary for your startup to succeed, but they are often not enough. In my experience, you need to be lucky too. In this blog, I will share some of my experiences with creating luck and opportunity to help you make and exploit them yourself.

The corpses of companies with good ideas and execution litter the entrepreneurial landscape. I know that many of my competitors were at least as smart and tireless as me. I also know just how many times luck played a pivotal role in our survival. We had many “by the skin of our teeth” escapes and miraculous opportunities that dropped in our laps. Some of these are “only over a beer” stories. But, I will tell you a few that will illustrate how you can take control of your luck to a degree. Let’s talk about how you can make your luck and exploit it when it happens.

Watch the video: https://ftb.bz/40V

Read the blog: https://ftb.bz/40B

I recently had the chance to talk with Michele Chaboudy.

She is an experienced senior executive, serial entrepreneur, consultant, and angel investor.

Michele is vice-chair of the north bay angels and teaches innovation at Santa Rosa Junior College.

Her background and experience are wildly diverse giving her insights broad applicability.

In this interview, she shares tons of useful advice for any founder or CEO.

In the course of our conversation, we talked about:

how many young entrepreneurs misunderstand networking. It is not handing out business cards over drinks and hors d'oeuvres. It can happen every day, all the time.

her favorite analogy, taken from her experience racing motorcycles. You need to be looking at least two turns ahead because you go where you look.

her process for evaluation companies as an investor, and what matters most to her.

how she teaches founders to develop a strategic mindset

what entrepreneurs need to know about researching their intended customers

Feel the Boot Founder’s Alliance: https://ftb.bz/alliance

Michele’s startup consulting website: https://macabbey.com/blog

Michele’s suggested resources for founders and entrepreneurs:

https://helloalice.org---co founded by Elizabeth Gore, who was also interviewed on Feel the Boot.

Simon Sinek— https://simonsinek.com/ particularly his “Start with Why” (book) and any of his speeches.

Scott Berkun— https://scottberkun.com/ - “Dance of the Possible” book and “Saving My Creative Soul” (video). All of his books and talks are excellent.

Malcolm Gladwell, recommend all of his books including his latest, Talking to Strangers.

Tina Seelig— http://www.tinaseelig.com/ - Stanford prof in engineering dept teaching innovation. Favorite book: Ingenius. Recommend any of her books and Ted Talks.

Jason Calacanis— https://thisweekinstartups.com/ Interviews Start-up Founders/CEO’s. Recommend his book on angel investing for tech start-ups.

Range by David Epstein. Why Generalists Triumph in a Specialized World. —The worst thing you can do is ask a kid what he or she wants to be when they grow up. Try to keep all your options open and don’t worry about starting “late” in a pursuit.

Lean Impact—How to innovate for radically greater social good by Ann Mei Chang. Takes the Lean Start-up concept and applies it to non-profits.

When you pitch investors, your audience will only remember a couple of ideas. Your job is to make sure they are your biggest strengths. In this blog, I will help you identify the aspects of your company that will wow investors.

I talked in previous blogs about why you need to highlight the most important strengths of your business in any presentation, particularly in pitches. If you need help creating the pitch, check out my complete pitch building process, check out this blog.

How do you decide which aspects of your startup will be the most important to this audience of potential investors? First, you need to get inside their heads. Try to understand what about your business will impress them. If you have not watched it, it might help to go back and revisit my blog on the nine things angels want to see in an investment pitch

I think that some real-world examples might be the most effective way to illustrate the kind of strengths that impress investors. In this blog, I will consider four companies I know well and the characteristics that made them stand out to me.

One thing that may surprise you is that none of these are about the technology or cool solution itself. Obviously, the solution needs to be valuable and desired, but there are a lot of companies that meet that standard. Most often, the startup’s best aspect is something outstanding about the company or business model.

One – Pet wearables platform

If you follow our interviews, you may already know the company I am talking about. They make a smart modular pet collar with an associated smartphone app. The app has a marketplace and supports other kinds of third-party integrations.

While they have gone through a few pivots, both in their products and in their messaging. I think they have nailed their key ideas.

This is a Platform, not a Product

The marketplace for smart pet devices is crowded, and many of them are having difficulty standing out. The company avoids that problem by positioning itself as a platform. They integrate deeply into the whole pet ecosystem and the lives of the owners.

The platform also provides multiple potential streams of revenue and partners that can act as sales channels: pet food, toys, medicine, vets, groomers, walkers, boarding, training, and many more. Also, the integrated platform is more sticky than a simple device. Switching to a different collar would disrupt many other relationships.

Additionally, they have active contracts with partners that are paying the company to develop integrations and are committing to help with marketing. They are in mature discussions with several more possible partners with different offerings.

This shows people that the idea is not some fantasy, but is real and works.

What I remember from their pitch: a platform, not just a device, with proven traction.

Two – Virtual group sports watching

This company created an app that allowed friends from college to continue to watch sports together virtually even after they scattered to the corners of the globe.

This company is inherently viral

You can’t watch sports with friends by yourself (obviously). Users have to recruit their friends to the platform. Because we don’t all have the same friends, that person would invite a different set of friends for other events. This exponential growth would expand the userbase automatically.

The company only needed strong execution to generate the effect. The company was inherently viral.

In addition to growth, the network effects in the business could exclude latecomers to the market. Once all your friends are on a platform, you don’t want to try to get them to move to a new one. If even one of your friends does not want to switch, the group will default back to the original one.

The pitch focused on the inherent virality of the business and how it created both growth and defense.

Three - Medical devices

I have seen several medical device companies that share the same strength. This is not a problem. Highlight your real strengths rather than something unique but less impactful. Their solutions were all very different, but their strengths happened to be the same.

This team will win

These companies all had effective products, solving big problems, in large markets. But that was not the grabber. What made them a compelling investment was the team.

The founders had worked together on previous successful medical startups. They have a track record of success. They know the space, the opportunities, and the traps. They already have relationships with manufacturers, doctors, insurers, the FDA, and so forth. They can talk about precisely and confidently about how they will bring the solution to market.

With a team like that, there are few unknowns and a high probability of success. That is music to the ears of an investor.

All the companies made a point of focusing on the obligatory team slide.

Four – Water-saving next-generation irrigation

This company developed an innovative lawn irrigation technology that saves water and reduces installation labor costs. They are reaching their market through landscaping companies who sell and install the systems for end consumers or institutions.

A Win-Win-Win alignment of interests

The key idea, and what pushed me over the line to become an investor, was how the company ensures that all parties are highly motivated.

The landscapers love it because installing this system takes a fraction of the time/labor as a conventional one, while the hardware costs are comparable. But, they charge the same price, so their profits go way up.

The customers love it because, for the same price, they save a ton of money on water. They also feel good about helping to conserve a scarce resource.

Recruiting new landscaping contractors is easy, and each one then drives new sales. Win, Win, Win.

Some companies have a murky path to market. Their deck made it crystal clear why this would get traction and take off.

Of course, there is much more to say about each of these businesses. All of their pitches hit all the required points. At the end of the presentations, I felt comfortable with the companies. They had addressed all my concerns. But, beyond that general feeling, the things I still remembered days later were these key points, which was the point. If you can identify and emphasize the best aspects of your business, as they did, you will have a big leg up on most of your competition.

The same concept applies to marketing, just with different points. Your customers won’t care about the same things that motivate investors. The smart collar company does not talk about platforms in its advertising; it talks about protecting the health and safety of fur-babies. The medical device companies talk about the health and cost benefits of their solutions. The irrigation company talks about improved profits and sales to landscapers and about saving money, saving water, and saving the planet to the customers.

Hopefully, those examples will be helpful with finding your key strengths. Many founders have a hard time with this exercise because they are too close to the business. They understand all the details and subtleties and may think the big picture is too obvious to state. If you are having trouble, find an outside advisor or peer to help you get the perspective you need.

Let me know if this helped clarify how to find those key strengths or whether I need to take another crack at it. I would love to hear about the aspects you identified either in the comments or over in the Founders Alliance group.