Steve Blank

“This is the West, sir. When the legend becomes fact…print the legend”

The Hollywoodization of Silicon Valley startup stories “prints legends,” but for most startups those stories are pure fiction. They don’t tell the awful, painful, and exhausting job it is to build a business.

The two guests on today’s Entrepreneurs are Everywhere radio show tell it like it really is to navigate the chaos of a startup.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Drew Silverstein

Joining me in SiriusXM’s studio in New York were:

• Drew Silverstein, co-founder and CEO of the music technology venture Amper Music
• Craig Kanarick, founder of the indie food site Mouth

Craig Kanarick

Listen to the full interviews with Drew and Craig by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interview are below.

Drew Silverstein is an award-winning composer, producer, and conductor for film, television, records, video games, and an MBA student at Columbia Business School.

He created Amper Music to change the way music is composed and created for video content, but it is not his first startup.  

At his first venture, Henry O’Bryan, LLC, Drew quickly learned that startup life is nothing like the movies.

Drew: It wasn’t a successful startup. We didn’t sell it. We didn’t IPO it. It went really well for a while … and then we closed it down breaking about even. I think that removed the sheen of startup glory (for me).

… I had the perception of, “You start a company, you build it, you go, and ta-da!”

Steve:  It grows up like Facebook.

Drew:  Exactly. … Just like the movies. I should’ve known (that wasn’t true) because I’m in Hollywood, and we know what really happens behind the scenes. … 

… In a startup you need to be an expert in what you’re doing – not just doing something you have a cool idea for. You better know the problem in and out, and if you can have lived it, even better.

It’s important to have a fantastic team around you. We had a great team, but I wasn’t the best, most valuable team member I could’ve been for the project. 

… I learned that in a startup things don’t always go well. In fact, usually they’re not going well.

If you can’t hear the clip, click here.

Craig Kanarick’s career has integrated digital technology, design and strategy. In 1995, he co-founded the digital services firm, Razorfish and grew it from a two-man startup to more than $250 million and 2,200 employees. Craig also co-founded Razorfish Studios, a media and entertainment company, producing books, films, TV shows, albums and websites. 

After leaving Razorfish in 2001, Craig spent a year immersed in food, including a stint as a prep cook at Babbo, Mario Batali’s flagship restaurant. At the Rockwell Group, the architecture and design firm, he co-founded Studio Red and the Lab, an incubator for integrating digital technology into physical spaces. He founded Mouth in 2012.

At Razorfish, Craig’s lack of startup experience showed:

We expanded too quickly, and in particular we merged with a company that was a complete culture clash with the rest of the company. We were creative designers and front-end developers in a highly creative environment, and we merged with a Boston-based back-end technology company who was working in Fortran, and old school.

(In hindsight, the culture) mattered a huge amount. After the merger people were asking, “Why am I working for these people now? I don’t get them. I don’t understand them. I don’t like this place … “

… The other (mistake) was … not responding to the market and understanding how the market was changing and how quickly it was changing.

If you can’t hear the clip, click here.

Founders, he acknowledges, sometimes get past their skill set

…there’s a big difference between creating things, managing things, and operating things. We were better at creating things and not so good at managing or operating them.

… I’d not even managed myself. I’d never been a boss of anybody before Razorfish … so we really had to learn everything on the fly.

If you can’t hear the clip, click here.

—

Drew shared where the idea for Amper came from:

We recognized that what we were doing in terms of writing music … could be distilled.

Not distilling the high artistic level but at its core we could distill what we were doing into a process that could be replicated by a computer.

… Algorithmic computer music has been around for decades but we think we’ve figured out a novel way to approach the solution based on our experiences as film composers.

At the same time we had clients coming to us and saying, “We need this. Not every project we do is this high-budget triple A blockbuster. With these other projects, we don’t like the (music) solution that we have. Can you do it for us instead?”

We … put one and one together and said, “If we can offer you a solution that provides the product that you want, the music that you want, that’s driven algorithmically, is this something that you’d be interested in?”

Overwhelmingly the response was like, “Yes. Yes. Can we have it yesterday. Why don’t you have it already?”

And that’s … when we said, “All right. We don’t know if we can do it but it sounds like we should explore the opportunity.”

If you can’t hear the clip, click here.

Customer input shaped Amper’s product:

One of the things that was really important to us was using Lean methodology. We … ended up doing it before we knew what Lean was…  

… Before we had a clue what that was, (we had customer input). …We said at its core, what are our assumptions, how do we validate them, and then how do we change paths or iterate based on that as quickly as possible?

 … outside the building, you learn how many nuances there are to what you’re doing. It’s not one big umbrella of a problem; there are so many different elements to it. … We learned it’s not just music for media it’s, well, here’s one use case, here’s another use case, who is doing it and why? You you need to boil this down to the most pinpoint thing you’re going to do, be successful at that, and then grow.

I think unless you’re asking people and learning from people and asking to meet more people and figuring out where this is going … it will take a lot more time to figure that thing out than doing it the lean way.  

If you can’t hear the clip, click here

Drew wishes there was a playbook for how to be a startup CEO at Amper:

There is a lot of information on, “How do you raise money?” (but) there’s a lack of information, or certainly less thereof, in terms of what do you do after you raise money? How do you run a business and how do you be the person you need to be to everyone you’re interacting with? How do you deal well with investors, with customers, with employees, with your colleagues?

… you are responsible now. People have given you a lot of money and said, “Do this thing.” …fortunately, we have a great team of advisors, who I think are invaluable because, just like anything, it’s an apprenticeship.

If you can’t hear the clip, click here.

—

Craig explained how fund-raising has changed since doing his first startup:

It’s completely different. … There was no angel investing in the days of Razorfish. It was all strategic partnerships leading to IPOs. That’s just not the path right now. The whole idea of crowdsourcing and crowd-funding and doing angel investing, and then a series A with VCs, that path didn’t exist in the late ’90s at all.

(Today) there’s more access to capital, and it’s a pro-entrepreneur world. It’s cool to be an entrepreneur. 

If you can’t hear the clip, click here.

Here’s why Craig started up again:

The first thing that I tell people is to make sure that you love what you’re doing, because you’re going to have to work an enormous number of hours doing it.

You’re going to spend a huge percentage of your time doing this, you’ve got to love what you do, you have to be good at it, and you have to be honest about both of those two things. 

Because you can fool yourself into thinking it’s worth it because I’m going to get paid at the end.  When the Internet was on fire people said, “How do I make some money off this Internet thing?” If you’re asking that question, you’re in the wrong place.  

Steve:  You know my line is, “Entrepreneurship, it’s not a job, it’s a calling. It’s the world worst job, but it’s the world’s best calling.”

Craig: It is. It’s the reason I’m doing it again.  

If you can’t hear the clip, click here.

Listen to my full interviews with Drew and Craig by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere:  Nigel and Vaugn Caldon, co-founders of BallStar and Kerry Frank, founder of Comply365.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show | 1 Comment »

In a startup cheap may be expensive.

And just having cool technology doesn’t make a successful business.

What it was like to get out of the research lab to build a startup was the focus of interviews with two of the latest guests on Entrepreneurs are Everywhere, my radio show on SiriusXM Channel 111 (airing weekly Thursdays at 1 pm Pacific, 4 pm Eastern).

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Nina Tandon

Joining me in SiriusXM’s studio in New York were:

• Nina Tandon, CEO and co-founder of EpiBone, the world’s first company growing bones for skeletal reconstruction
• Brandon McNaughton, co-founder and CEO of Akadeum Life Sciences cell sorting technology company

Brandon McNaughton

Listen to the full interviews with Nina and Brandon by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interview are below

In addition to her work with EpiBone, Nina Tandon is the co-author of Super Cells: Building with Biology. She is an Adjunct Professor of Electrical Engineering at the Cooper Union. Nina has a bachelor’s in Electrical Engineering from the Cooper Union, a master’s in Bioelectrical Engineering from MIT, a PhD in Biomedical Engineering, and an MBA from Columbia University. Her PhD research studied electrical signaling in cardiac, skin, bone, and neural tissue.  Fast Company named Nina one of the 100 Most Creative People in Business.

While building EpiBone, she quickly learned to avoid business shortcuts:

Nina: Cheap is expensive.

Steve: What does that mean?

Nina: I don’t think there’s any corners that can be cut. Sometimes if someone offers you free services …, it can be tempting to take them up on that offer, but then you might create a problem that’s a lot more expensive to unwind down the road.

Steve: Because you’re committed to the wrong people, the wrong service or whatever?

Nina: (Nods.) I’ve made some mistakes that are inadvertent but that needed to be undone.

If you can’t hear the clip, click here.

A tech entrepreneur and inventor, Brandon McNaughton was entrepreneur in residence for Detroit Innovate, an early-stage venture fund. He also founded and served as chief technology officer of Life Magnetics. Brandon teaches entrepreneurship at the University of Michigan Center for Entrepreneurship.

Brandon’s current startup Akadeum was one of the 760 teams to go through the National Science Foundation (NSF) Innovation Corps, which teaches scientists and engineers how to take their science out of the lab and into the marketplace.

Brandon’s biggest takeaway from the NSF program had nothing to do with technology:

I’ve learned that business is about relationships. Relationships with customers, it’s relationships with your employees, your investors, because when you buy something, there’s an expectation, there’s a back and forth.  

That’s something that I didn’t really appreciate until after my first startup. I thought it was all about the technology, “Oh, if I could just get this technology to work. If I could just get it to do this, then everything’s going to be OK,” and in some ways I now think technology doesn’t matter. … what matters more is the … the customer’s problem.

… I think the epiphany was when we closed down Life Magnetics …It was hard to find that right product-market fit. The technology was working, but finding that market fit was challenging. …

…We couldn’t figure out the right business model to move forward with. That’s actually how I look at startups now. It’s trying to find that business model as quickly as you can that will support a company. You don’t need new gee-whiz technology to do that. What you need is to understand the problem to know what do deliver to the customer.

If you can’t hear the clip, click here.

Getting to know customers, Brandon said, only happens if you get out of the lab and talk to them:

Brandon: (The I-Corps program) was a combination of being an accelerant, but also getting us (the founders) on the same page, because we all had … different mental images and … different expectations …

Steve:  Of what a customer was and what commercialization was?

Brandon: (Nods.) And whether or not we wanted to start a company, when we were going to start a company, and what the company would look like.

The I-Corps process was great. It was exciting to see Gwangseong Kim, (my grad student and member of the Akadeum founding team) up in front of the class because as the entrepreneurial lead he was the one who got up there and presented what we learned. (co-founder) John Younger and I just stood there … I mean, we also did the work, too, talking to customers, things like that. But the entrepreneurial lead is the one who gets to represent the team.

… It was so amazing to watch the transformation in him. And for Gwangseong one great moment was (when) he did his first cold (customer) call. When we were in Berkeley, we were talking about cold calling and how to do it. (And Gwangseong) was a little bit of apprehension…

Steve: Because he’s a scientist?

Brandon: Exactly. I still have that even when I talk to certain people, it’s like, “Oh, I’m bothering somebody …”

(But) Gwangseong made the call and within 15 minutes he gets invited to lunch the next day. Right? So he hit a nerve with a potential customer and was incredibly excited that you could make a call and get that kind of response. 

…this (lunch meeting) was the kind of thing you dream about (when you’re starting a company). You want to find those moments of opportunity and you don’t know unless you make the call, you don’t know unless you go.

If you can’t hear the clip, click here.

—

Nina shared what it was like to get out of comfort zone of the lab:

As a scientist you think that you’re confident about uncertainty because you’re operating in the uncertainty of knowledge, and yet you have the crutch of the scientific method constantly at your side saying, “Hypothesis, test, conclusion, reevaluate.”

But to take that to the jungle in the real world (outside the lab) is a totally different level of uncertainty. (And to add even more uncertainly) throw in having to make a payroll, wanting to make sure you take care of people, knowing that people’s lives and livelihoods depend on my ability to make sure there’s enough money in the bank.

Now that’s operating in uncertainty.

If you can’t hear the clip, click here.

There was a moment when the startup became real for her and her team:

Nina: We had a lot of conversations with people and having talked about ideas, and all of a sudden there were things that were manifesting in real time, in front of us, that gave us the sense of, this isn’t a joke. This is real.

Steve:  We’re going to have to actually build something?

Nina: Yeah, it became concrete.

…We were hiring our first employee … we didn’t have a lot of (money in the bank), we only had one grant $350,000 at the moment. We said, “Well, we’re going to hire our first employee, and you know what? We’ll pay him before we pay ourselves.” That was a moment where we realized, OK, we’re setting a precedent here. We want to take care of our employees and we’re willing to sacrifice our own salaries in order to do that. Luckily we only ended up hiring him two weeks before we hired ourselves, but we joke that he’s the most senior employee.

If you can’t hear the clip, click here.

Nina also shared the best advice she’s received:

Nina: My mom says that people often don’t remember what you’re saying, they remember how you made them feel, and be really careful not to try and use other people as a stage from which you can display your own intelligence. …

My dad who retired at 55 told me, when I was thinking about my career … “You can’t be afraid to jump off the merry-go-round,” because he’s seen people who’ve built elaborate cages for themselves as their desires … changed along with their economic potential, and then there was no going back. 

Nina: And my third (piece of advice) is from Steve Blank. … I don’t know if you remember you told me this, but when I called you after getting a really important investor on board … you said, “Nina, don’t you dare confuse money with scientific validation, don’t you dare.”

If you can’t hear the clip, click here.

—

Brandon explained how Akadeum determined if their cell-sorting technology could be a business:

Brandon: … The first thing we wanted to find out was is there a need for our product.

Steve: You woke up and said, “Who needs cell sorting?”

Brandon: That’s right. We started reading the literature,… trade magazines … scientific publications. What we’d see is sometimes people would be quoted as thought leaders and (we’d) write down their names (and) reach out to them.

Steve:  What would you say? “I’m a scientist in the University of Michigan. I want to talk to you”?

Brandon: Yeah. We would say, “we’re looking at developing a new technology. We just need 5 or 10 minutes of your time. We’re trying to figure out if this needed or not.” …

Steve:  They would respond?

Brandon: Yeah. They would respond. … in our experience, people are very nice. People are very generous (with their time.) If you’re genuine, and honest, people, they’ll spend time with you. They’ll help you. Really, they were helping us figure out if there was a need for this or not.

… The first thing they would do is share a little bit about whether they thought this was a good idea. Sometimes, they would say, “We have a problem that we’re trying to solve that this might be a good fit. …”

If you can’t hear the clip, click here.

Listen to my full interviews with Nina and Brandon by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere:  Nigel and Vaugn Caldon, co-founders of BallStar and Kerry Frank, founder of Comply365.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show | Leave a comment »

While finding product-market fit is important, getting the rest of the business model right is the difference between a great demo and a great business.

And embracing risk-taking or failure is hard when you go to college and have to be the example for your family.

Lessons learned from starting up and teaching entrepreneurship were the focus of an interview with the latest guest on Entrepreneurs are Everywhere, my radio show on SiriusXM Channel 111 (airing weekly Thursdays at 1 pm Pacific, 4 pm Eastern).

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Grant Warner

Joining me in SiriusXM’s studio in New York was Grant Warner, director of innovation and entrepreneurship at Howard University’s College of Engineering Architecture and Computer Science, and co-founder of ConnectYard.

Listen to the full interview by downloading it from SoundCloud here.

(And download any of the past shows here.)

Clips from his interview are below.

Dr. Grant Warner is the Managing Director of the HowU Innovate at Howard University. HowU Innovate provides campus-wide innovation courses, in which students are guided through the process of founding technology startups.

Grant is a core faculty member of the NSF I-Corps and directs the Howard University – Hampton University I-Corps Site, which commercializes university research. Additionally, he is the co-founder of ConnectYard, a social analytics platform for e-learning platforms. He is also a co-founder of XediaLabs, a DC-based incubator that provides training and technical consulting to local startups.

While building ConnectYard, Grant learned that product-market fit is not the only ingredient for success:

Grant: One thing I would say about my co-founder, he’s very intuitive on the sales side. We did do a lot of … customer discovery. We did a lot of talking to customers, trying to understand who really had the need. What was the value proposition? That helped us develop a product.  

What we didn’t do as well was really explore the (rest of the) business side – channels and all the other things. …(And that) hurt (our effort).

… We had raised some money and had moved forward. We found customers who said, “Yeah, this is a real problem,” developed a product, they said, “Yeah, we dig it.” We were able to acquire some early customers … (and) used that to raise some money. Then we decided, “Yeah, we’re going to go and sell this directly to universities.”

(But not focusing on the other aspects of the business model) hurt tremendously. We pretty much ran through all of the money without finding the proper way to reach (customers).

Steve:  You weren’t thinking about the right channel and that should have been something else being tested in customer discovery? If you would have had a framework, you would have said, “Hey! We haven’t tested these hypotheses.”

Grant: Correct.

If you can’t hear the clip, click here.

Howard University’s approach to entrepreneurship education for students in this historically black college has them plugging into the DC-area startup ecosystem. Grant explained why:

…This parallel between hip-hop and startups is an important one, particularly when you think about technological entrepreneurship for people of color.

When I think about hip-hop, it started off as something that people did as a hobby. Then an opportunity to grow business ventures off of hip-hop (emerged), and that opportunity spread like a virus. People said, “Wait, hiphop is a model that shows how I can step through this to grow what I’m interested in.”

 I think the same opportunity is available now for people of color to participate in technology startups. We need to show the model and broadcast the model.

Steve: You think that’s widely understood among people of color, that this is an opportunity not just for white folks? 

Grant: Yeah, I think there’s a growing understanding of it but there’s two sides to the coin. One side is understanding for people of color, this is something that you can do. But on the flip side, it requires people who are driving industry to say, people of color can participate in this. … 

Steve: You think there’s bias in funding and in startups?

Grant:… Look, we’re people, right?  There’s no reason why funding should act any differently (based on color) but there’s an unintentional bias that comes from networks and exposure to networks. One of the things that we’re trying to push (at Howard University) is the integration of what we’re doing on campus in entrepreneurship with the broader (Washington) DC ecosystem. We want our students to understand who are the movers and shakers in the ecosystem that can help them grow.

If you can’t hear the clip, click here.

He also spoke about the cultural implications of failure:

Grant: Fear of failure has some cultural implications for us. For our students, they come in to school, and they think, “you have to be the example for your family”. You might be (the first in your family to go to college). 

Steve:  And entrepreneurship is for crazy people. 

Grant: Right. (They think) it’s only for crazy people. We want to encourage them to take more risks with their career. Part of it is real, right? You might feel like, “I want to graduate, get a good job, so I can help my family.” That’s a real thing that people feel.  

Our take is that, “Well, you could graduate. Take a risk. If you fail, the good job is always going to be there as long as you learn a lesson.” So you’re not recklessly failing. … 

… what we’re pushing against is that you can fail without being a failure.

If you can’t hear the clip, click here.

Grant said doing a startup changed his overall mindset:

Despite all of the years of undergrad and graduate school, I learned more in the first couple years of building ConnectYard than I had prior to that point.

… ConnectYard changed the way I viewed what I was doing at the university. … I’d go to faculty meetings and realize, “These conversations are pointless, nobody wants to get anything out of this (meeting).” (At ConnectYard) we couldn’t afford that. Each meeting we went into for ConnectYard,had to end with hopefully something positive. If not something positive, at least something quick. That changed the way I thought about making decisions.

Steve:  That’s a great lesson. … I remind entrepreneurs that in a startup there are only two types of decisions, revocable decisions and irrevocable decisions. In a meeting, if it’s a revocable decision, meaning you can change your mind later, you are making a decision in that meeting. There is no other meeting to have the meeting to schedule the conference room to have the meeting. However, there are a few decisions that irrevocable. Who are you taking money from? Do we sign a five-year lease? Do we hire 50 sales people? Those are hard to roll back. For a startup you might want to have 48 hours to consider those. I think what you just pointed out is some people in large organizations tend to make revocable decisions into a four-year meeting process.

Grant: That’s exactly what it is. They just go on forever.  

Steve: What was the light bulb (moment) that changed you?

Grant: It really was going through the life or death of ConnectYard, realizing that each day was a day that the runway (of money left in the bank) was running out. We couldn’t afford (to waste time). It changed the way I looked at things. The other piece was that my partner had some of the Lean Startup process down cold. Thinking about that … helped me think about how you approach projects, and understand what’s important in the project and get to a result quickly. … 

Steve:  You think it’s made you a better faculty member?

Grant: It’s made me a better everything. … Really, I do believe that. Definitely a better faculty member because it’s helped me talk to students in a different way. It’s helped me approach projects in a different way.

If you can’t hear the clip, click here.

Listen to my full interview with Grant by downloading it from SoundCloud here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Nina Tandon, co-founder of EpiBone; and Brandon McNaughton, co-founder and CEO of Akadeum Life Sciences.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show | Leave a comment »

Research done by professors and their grad students in U.S. universities labs are being turned into commercial products and life saving drugs and devices thanks to an act of Congress – and the efforts of technology transfer offices in schools like Stanford and Columbia.

How this research is transferred outside the university, and why this “tech transfer” process is important was the focus of an interview with two of the latest guests on Entrepreneurs are Everywhere, my radio show on SiriusXM Channel 111 (airing weekly Thursdays at 1 pm Pacific, 4 pm Eastern).

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Kathy Ku

Joining me in SiriusXM’s studio in New York were:

• Kathy Ku, executive director of Stanford University’s Office of Technology Licensing
• Orin Herskowitz, executive director of Columbia Technology Ventures

Orin Herskowitz

Listen to the full interview with Orin and Kathy by downloading it from SoundCloud here.

(And download any of the past shows here.)

Clips from their interview are below

—

As executive director Stanford University’s Office of Technology Licensing, Kathy Ku oversees the licensing of Stanford-developed technologies.

From 1994-98, Kathy was responsible for Stanford’s Sponsored Projects Office. She took a break from Stanford in 1990 and 1991, as VP of business development at Protein Design Labs, Inc. Prior to that, she spent 12 years at Stanford; worked at Monsanto and Sigma Chemical as a research scientist; administered a dialysis clinical trial at University of California; and taught chemistry and basic engineering courses.

Kathy has been VP and trustee of the Licensing Executives Society (LES), and was president of the Association of University Technology Managers (AUTM) from 1988-90. She received the AUTM 2001 Bayh-Dole Award for her efforts in university licensing, and is currently a member of the NIH Advisory Committee to the Deputy Director of Intramural Research.

Orin Herskowitz has been executive director of Columbia Technology Ventures since 2006 and is also VP of Columbia’s Intellectual Property and Tech Transfer.

In addition, Orin has served on boards or as the Principal Investigator for the NYC Media Lab, PowerBridgeNY, and the Columbia Coulter Translational Partnership. Prior to joining Columbia, Orin spent seven years with the Boston Consulting Group’s New York office.

Tech transfer is about far more than simply licensing technology, Kathy and Orin explained:

Kathy: Tech transfer has a broader mandate. … it’s helping entrepreneurs, it’s creating the culture, the ecosystem for fostering entrepreneurship and startups. I think our mandate is just getting broader and broader. 

Orin: …The rap on tech transfer used to be that it was about picking the winners. The offices would only focus on (licensing) the one or two things that were going to be blockbusters. That is certainly not the case (anymore) at all. The mission of tech transfer is to get as much out of the (university) labs and into the market as possible, because you never know what’s going to be a hit.

You never know what’s going to transform the world. I think what you’ve seen is an increasing effort among the tech transfer offices to professionalize, to try to make (the tech transfer process) as transparent as possible, as fast as possible, and as predictable as possible, so that the negotiations don’t drag on for years, you’re not asking for exorbitant rates, it’s just easy and fast.

Steve:  Kathy said a phrase I thought was pretty important for the future direction of tech transfer, and that is “tech transfer offices are helping to create an ecosystem around our universities.” That is, instead of just  looking inward, thinking that your job is to create the most amount of money for the university, it sounds like you’re also now thinking your charter is to actually build the ecosystem around the universities.

Kathy: For sure. I think many universities are feeling this pressure (to create a broad entrepreneurial ecosystem). I think there’s … pressure to do more applicable research with results that are useful to the public. The tech transfer mission has broadened, and it really literally is technology moving from the university sector out for the public good. … it typically moves out with the smaller companies I would say.

(Smaller companies – startups) are more risk-taking organizations. They don’t have to worry about the quarterly report (or other) financial reports that the big companies have to do. Also I think that whole revolutionary technologies are hard to get into an old established company with a product to protect.

If you can’t hear the clip, click here.

Kathy and Orin provided a brief overview of what tech transfer does and how it works:

Kathy: The federal government funds most of the research at universities … (to the tune of) tens of billions of (dollars a year).

(In the 20th century) the U.S. government research agencies (the National Institutes of Health The National Science Foundation, The Department of Energy, etc.) … all had different patent policies (on what universities could do with the research that the government funded). …

Steve:  Meaning if I was a government agency and i gave your researchers money, you had to follow my agencies rules; there was no national standard of what I could do with that technology. Is that correct?

Kathy:   … The law at the time said the government (not the university) owned these patents.

Steve:  (This was true) even though these were university researchers, because they got government money, the government owned the rights to this stuff.

Orin: …You can imagine what a priority that would have been for the government at the time … to actively market these technologies and find venture capitalists and all that. (The government had no interest and/or ability to market these technologies and find venture capitalists.)

Steve:  Congress passed a law, which was called Bayh-Dole to solve this problem… what did the Bayh-Dole Act do?

Orin: … Essentially what the Bayh-Dole Act does is transfer the right to own these assets from the federal government, to the university that receives the research funding.

Steve:  That’s a big idea. The government says, even though we’ve paid for this, even though we funded this research, here Stanford, Columbia, and any research university getting a grant, you guys go make money on this if you can figure out how. Is that what the Bayh-Dole Act said?

Orin: Essentially. The idea was … (to) give the incentive to transfer the rights and obligations to do this to the people who have an incentive to try and make it work.

Kathy: …(Bayh-Dole) was a huge deal. (At Stanford) we had individual agreements with a few of the agencies, the NIH and NSF notably. We could take title (ownership) too those inventions funded by that agency, but the rest of them we had to go and fight each time and say, we wanted to take title or not. The agencies were all of differentiating ilk, and so they may or may not give us title.

Orin: The thing to keep in mind, too, is that … this initially was only relevant for the faculty members that were working on federally funded research.

… What most universities have done since then… is extended (tech transfer to include) to any research done on campus, that uses university funding, or university labs.

Steve:  (So it means today a university will try to license and commercialize more than) just the stuff that gets money from the federal government. Anything that the university would have claim for, now says we’re happy to license and whatever, but oh by the way, if you did it on campus, we own it.

Kathy: Right. … Bayh-Dole was not necessarily created to have the universities make money, but to incentivize universities to do this tech transfer thing. The government realized that all the patents that they had filed on, just sat in some repository, and never got used.

If you can’t hear the clip, click here. 

Here’s how Columbia and Stanford universities market their technologies:

Kathy: Right now, what Stanford does is … market our technologies to … anybody who might be interested…. We put (these inventions and patents) out on the web or we contact companies etc.

Steve:  That means you have an invention that one of your professors have done that does x and y. Here’s the description, is that what you mean by market?

Kathy:  … and it might do this and it might be cheaper, faster, a better something … (We basically say) come and tell us if you’re interested in it (whether you’re a startup or a large company). (But) The reality is most times nobody is interested. …It’s really too early. That’s the sad thing. We have lots and lots of good technologies but it seems that our system is such that many of the large companies can’t either recognize that or don’t want to invest in this early stage stuff. 

Orin: … (The problem of getting someone interested in University technology is even tougher than it sounds) … take the role of a venture capitalist. … In the average VC portfolio … 1 in 10 companies (they invest in) will turn out to be a big hit. … And if you’re in the pharmaceutical industry, 1 in 100 compounds that start life with a big pharma will actually make it to market and be a big success.  

Our science (we license) is early (for VC’s and companies) because unlike a corporation, when the faculty members have a new idea, they are going to publish it in a journal (that’s how academics get credit and recognition for their research.) So we file our patents very, very early on (often before the ideas get published.) The most successful moments for us, when we pop the champagne, is when we license something to a venture capitalist for a startup or to a pharma company to become one of those 100 things that might make it to market someday.

If you can’t hear the clip, click here.

Orin shared Columbia University’s recent Eureka moments:

Orin: Last year, we had roughly 200 faculty members who interacted with our office and (those 200 faculty members) created 400 new inventions. (Think of those as) roughly 400 Eureka moments by the faculty.

Steve: These faculty say, we think this idea is worth patenting or licensing?

Orin: (Nods.) (For) some of them it’s very clear. They say, “I have a new compound that has never been seen before that I believe is relevant for this specific disease.” In other cases, they might say, “I’ve observed this cool interactions between two things. I don’t really know how it’s going to be used yet.”

… 200 faculty labs, 400 inventions… at Columbia at least, we file patents on roughly two-thirds of those, so 200 some odd patents get filed. We, last year, did 117 licenses with companies of which 27 were startups.

If you can’t hear the clip, click here.

Kathy offered insight into the process at Stanford:

(At Stanford) here are close to 500 (new inventions that my office sees.). I would say we file patents on about 60 percent of them… and we license about 25 to 30 percent.

(Non-exclusive licensing of any invention is essentially) “you go over my bridge, you pay my toll.” We offer a mix of what we call non-exclusive licensing (we will license the same invention to multiple companies)– — (We also offer) exclusive licenses (we’ll license the invention to just one company. We do that as an) incentive for the company to invest the resources (to further develop the technology into a product). … I would generally say (we do) 50-50 (exclusive and non-exclusive licenses.)

We have a strong engineering school, strong medical school, but we’re way more successful in licensing in the medical side of things. I think (it’s because) the medical industry believes and realizes the importance of patents patents. They  also understand the long R&D phase, much more than high-tech. High-tech is just trying to get a new product every 18 months out. Their patents are just a piece of their picture.

If you can’t hear the clip, click here.

Listen to my full interview with Orin and Kathy by downloading it from SoundCloud here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: my interview with Grant Warner, director of innovation and entrepreneurship at Howard University’s College of Engineering Architecture and Computer Science, and co-founder of ConnectYard, in part 2 of this post coming later this week.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show | 1 Comment »

Your product and company vision needs to match your appetite for funding.

And know that just because a venture failed doesn’t mean that you’re a failure.

Funding challenges and other issues founders face in the early days of starting up were the focus of interviews with the latest guests on Entrepreneurs are Everywhere, my radio show on SiriusXM Channel 111 (airing weekly Thursdays at 1 pm Pacific, 4 pm Eastern).

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Nayeem Hussain

Joining me in SiriusXM’s studio in New York were

• Nayeem Hussain, co-founder and CEO of Keen Home, creator of smart vents that create a more comfortable home
• Will Zell, co-founder and CEO of Nikola Labs wireless power company

Will Zell

Listen to the full interviews by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interviews are below.

Prior to founding Keen Home, Nayeem Hussain spent his career focusing on M&A, corporate development/strategy, and financial analysist, first at Prudential Financial and then at Loral Space & Communications. He previously founded N&N Investments LLC, a real estate investment holding company; and is a program leader and fellow of the Startup Leadership Program. 

He stressed that your product and company vision needs to match your appetite for funding:

One thing that we learned very early on was, have a plan for fund-raising. … We had a lot of inbound interest from investors, but to be painfully honest … we were not ready to engage with professional investors (because) we weren’t able to coherently communicate a broad vision.

We were portraying the company as a vent company. 

Steve:  And they wanted a bigger business than just a vent company.

Nayeem: (Nods.) If you’re a venture capitalist … you have limited partners that give you money to invest on their behalf, and you’re responsible for giving them outsize returns. The limited partners could put their money in the stock market, but instead, they give it to you, the venture capitalist, which is much more risky, but you’re promising them huge returns. Therefore a venture capitalist needs to invest in startups that can turn into billion dollar companies.

Steve:  And a vent company wasn’t that?

Nayeem: A vent company might have been a hundred million, or a couple hundred million (dollar company,) which to most people, including myself at the time, sounded great. That’s a huge company. I’m coming out of business school building a three hundred million dollar company. Slam-dunk. (But) go in to pitch to a venture capitalist, and … I’m off by a zero. They need to return the value of their whole fund.

Steve:  They want Nest, not the vent, right?

Nayeem: That’s correct. We quickly understood that we needed to really understand what our brand was going to be. … Everyone needs to ask themselves that question. Is your … company venture-scalable and venture back-able?

… For a lot of people, the answer is no, but they refuse to see that, and they end up pitching the wrong type of investor.

If you can’t hear the clip, click here.

Will Zell started his first company, a real estate business, at age 22. Over the past decade, he has launched multiple businesses, including three technology companies. Will was honored at the White House as part of the 2011 Empact 100 list, for his work as a young entrepreneur.

Here’s how Will copes with the inevitable failure founders face:

I think that’s one of the biggest challenges is to not let failure define you. … You really have to separate the pursuit that you’re on, the business pursuit that you were taking, from you as a person. It’s hard, because you’re emotionally invested, financially invested, and it’s tough when something doesn’t work …

One of the most important things that I do, when I have something that doesn’t work is separate the journey …from me as an individual, and then learn as much as I can.

Literally take a significant amount of time to think back, to look back, to analyze what happened, what went wrong, what could I have done better, what could I do better in the future, and be brutally honest with yourself.

Also know that because this particular venture failed doesn’t mean that you’re a failure.

If you can’t hear the clip, click here.

—

Getting Keen Home’s smart vent to market was no small task. Nayeem explained why:

Building a hardware product standalone is very, very difficult because you have to deal with supply chain, you have to deal with customer service, you have to deal with fulfillment.

…our product is manufactured in Shenzhen, China … along with most of the high-tech electronics in the world, so we had to locate a factory, we had to find the right partner to build this product and work with us …

Steve:  Did you personally know about any of this?

Nayeem: I didn’t, no. Thankfully we were able to hire our … Chief Technology Officer, who did this his entire career.

… (Still) We had no idea the complexity that would be involved from sourcing the manufacturer and how long it would take once you found that manufacturer to be able to engineer the product… It’s very different when you’re engineering a product to make 100 of parts. …

You can start by using all sorts of off-the-shelf components, etc. …(But) when you’re going to scale, you have to source components oftentimes from all around the world with different lead times. For example, our product has more than 300 discrete components … just for the vent.

 … oftentimes if you buy the parts in advance they can be as much as 50 percent cheaper. So there’s what called spot market, and a futures market (for parts). Imagine a chart that’s 300 lines long for each component and you have to strategize when you’re going to buy this component and how far in advance you need to purchase it in order to get the price you need to get your cost of goods sold low enough that you’re going to make money on this thing. 

Steve:  Wow, and those are some pretty big unknowns because (the price of) those parts could swing back and forth.

Nayeem: That’s correct.

If you can’t hear the clip, click here.

A strong founding team will help a startup weather the chaotic early days, Nayeem said:

The key thing that I would tell people is really know yourself, know what you’re good at, and know where your holes are. Hire around you to fill those weak spots. …

As an entrepreneur, you’re always fighting that external war whether that’s with partners or with investors. … Make sure that the team you build around you are those that share your passion, share your vision, and really fill the holes from a skill set perspective. ….

Steve:  …was there any time a crisis of faith?

Nayeem: There wasn’t. I can honestly say there wasn’t. There was very many times when we were almost running out of money. Very, very many times. … That’s a crisis of bank account but …, to my team’s credit … when one person’s down the other person picks them up.

…That’s how you know you have a good team because some people are going to have bad days inevitably and you trust your team members to pick you up. Thankfully my team members always have.

If you can’t hear the clip, click here.

Keen Home appeared on the TV show, Shark Tank, in 2012, landing one of the highest valuations in the show’s history. Here’s how being on the show affected the company:

The process for getting onto the show is pretty grueling. You have a lot of weekly touch points with producers for months on end. When you’re trying to build a company, any commitment like that eats up a lot of your time, so you have to think very carefully about it, because it’s an opportunity cost to do other things that might directly benefit your business. We asked ourselves that all the time and the producer was very honest telling us almost every week, “You may not get on a show.” There’s no guarantee that after all this time investment you’re even going to get on television.

We rolled the dice … Certainly, for us, it was worth it because we were on prime-time television for 10 minutes talking about our product.

… It really exploded our perception and visibility in the United States. … Orders increased. Inbound interest for partnerships, for employment, for investment (increased) — you name it from small companies, small HVAC contractors to large companies like AT&T. Certain big brands and large companies that would never return my phone calls were all of a sudden emailing us saying, “Hi. We’re big fans of the show. We saw you were on it. Wonder if you’d be willing to tell us a little bit more about Keen Home.” It really opened a lot of doors for us.

If you can’t hear the clip, click here.

—

Will learned one of the most important founder skills while working as an insurance salesman during college:

Insurance is a commodity, right? You can go anywhere and buy insurance, and you’re going to get a competitive price in most places. You really have to be able to differentiate yourself when you’re sitting across the table selling someone an insurance policy. That ultimately boils down to the personal relationship that you can build with them in a short period of time.

Steve:  Do you think learning how to sell is an integral part of learning how to be an entrepreneur?

Will: Absolutely, 100 percent.

Steve:  Why is that?

Will: Because you’re always selling … You have constituencies, right? When you’re an entrepreneur or when you’re going to start a company… you have groups of people that you have to influence. … You have investors … or directors and advisors. You have your team. … whether that’s partners or employees that you bring on. And most importantly, you have your customers that you want to sell your product or service to.

It’s different types of selling. But it’s sales that really drive your progress with those three groups of people.

If you can’t hear the clip, click here.

Being in Ohio, which lacks the startup ecosystem of an entrepreneurial cluster like Silicon Valley, made it difficult for Will to get funding for his first startup, Huddlewoo:

The type of business that we were building needed an investment of capital ahead of revenue.

Steve:  So you needed to raise money to actually build the business?

Will: Yes, and that was my first brutal intro into the difficulties of raising venture capital where I lived.  

Steve:  There is probably is no venture capital for 50 miles, if not 500 miles.  

Will: Yes, (although)… Columbus, Ohio, has come a long ways, frankly, from a venture perspective.

Steve: Seed round to maybe an A round? 

Will: Ironically, you can get an A (funding round) a lot easier than you can get a seed round right now. …Drive Capital came in (to Columbus). Mark Kvamme, who was with Sequoia Capital, launched a $250 million fund. (But) that didn’t exist (when Will was first starting up) … and even getting a seed round is still pretty difficult. There are some angel investment groups, but the pool of investment capital and number of investors at the earliest stages is very, very small.  

If you can’t hear the clip, click here.

Will also shared the hardest part about being a founder:

Being misunderstood, just completely misunderstood.

Steve:  You mean in the community you’re in where the founder is an outlier, rather than at the core where you go to New York or you to go Silicon Valley and everybody’s a founder, including the waiters?

Will: Absolutely. Every time I go to Silicon Valley I’m like, “Oh, this place is great.”

Steve:  And so why do you stay?

Will: … I want to focus on impacting my community and region as much as I possibly can. That’s important me. Because of that I believe, and am even more convinced now, that there is opportunity and there is ability to build great tech companies in Central Ohio, so I stay because I’m committed.

If you can’t hear the clip, click here.

Listen to my full interviews with Nayeem and Will by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Orin Herskowitz, executive director of Columbia Technology Ventures; Kathy Ku, executive director of Stanford University’s Office of Technology Licensing; and Grant Warner, director of innovation and entrepreneurship at Howard University’s College of Engineering Architecture and Computer Science, and co-founder of ConnectYard.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show | Leave a comment »

Realizing you need help and learning how to ask for help are crucial skills for a founder.

And while how much money you make at startup is a way to keep score, a successful life can’t be measured only in dollars.

These topics were the focus of interviews with the latest guests on Entrepreneurs are Everywhere, my radio show on SiriusXM Channel 111 (airing weekly Thursdays at 1 pm Pacific, 4 pm Eastern).  The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Sarah Calhoun

Joining me in the Stanford University studio were:

• Sarah Calhoun, founder of Red Ants Pants workwear for women
• Steve Sims, founder of Bluefish executive concierge service.

Steve Sims

Listen to the full interviews by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Clips from their interviews are below.

Sarah Calhoun has spent two decades building nonprofits and small businesses. She was the 2012 National Women in Business Champion for the Small Business Administration. In 2011, she served as a as a US Delegate to the APEC Women in Business Summit in San Francisco. The same year, President Obama invited her to attend a White House forum on jobs and economic development, and she was named Montana’s Entrepreneur of the Year.

Sarah graduated from Gettysburg College with a degree in environmental studies and worked with Outward Bound and the Student Conservation Association. She had no startup experience, but decided to start Red Ants Pants when she couldn’t find work pants that fit her properly. Here’s how she found her way:

I learned a lot from other people. My pattern maker and this fellow Richard Siberell, (a designer for Patagonia who took her under his wing) were incredibly patient with me explaining the process. I did a lot of reading and research on my own. I asked for help whenever and wherever I could, and that’s a big piece that I think is essential.

Steve:  Is that hard?

Sarah:   Yes.

Steve: Why?

Sarah: I think in general, it’s somewhat of a vulnerable topic, when you just admit that you don’t know something that you need, and that you need help. … because it was all new to me, I was comfortable admitting that. … 

If you can’t hear the clip, click here.

In addition to founding Bluefish, Steve Sims is the CEO of the celebrity charity auction platform BLUEcause; a speaker; consultant; and author of the book 7 Ugly Truths. From the time Steve was young, he was on a quest to get rich. Over time, he learned money was not as important as he once thought.

…As you get more successful you get into the trappings. You get the suits. You get the watches. You get the cars. You get the penthouses. You get all of these things because, hey, once I’ve got those I’m successful.  

Then you get it and you walk into your penthouse and you go, “Not much has changed. I’m just on a higher floor now and with a bigger mortgage.”

You suddenly start realizing … once you’ve got (these things) that it’s not all that it’s cracked up to be.

(If I could) I would probably just sit my younger self down, pour a whiskey, and go, “Look, it will be fine. Just keep your word and it’ll be smooth.”

Steve Blank: Would you have listened?

Steve Sims: No. I was young and obnoxious and arrogant. Of course, I never had anything to lose. …I never had any of those trappings to risk. I went out like a bull in a china shop, “Grab grab grab, get it, get it. I want that deal, I’ve got to do that. I’ve got to make sure they’re happy.”

I made sure things worked for my clients because I knew if I looked after you, it would look after me. Without realizing it there was a little bit of intelligence there …

If you can’t hear the clip, click here.

—

Like many founders, Sarah is an idealist, but she didn’t initially look to doing a startup as a way to realize her dream of making a difference:

When I got into college, I was an environmental studies student and wanted to save the world. … I looked down upon those marketing majors, who just wanted to make money, and I thought this was the last thing that I would ever do.

…I wanted to make more of an impact as far as doing good in the world, and at that time I didn’t see business as an avenue for that. I didn’t know much about business. I’ve still never taken a business course in my life.

If you can’t hear the clip, click here.

She had no idea what she was getting into:

There were no work pants that fit women out there on the market. None, whatsoever. As you can imagine, curvy hips do not fit well into square men’s pants.

I was fed up with wearing pants that didn’t fit, as I realized lots of other women in the industry were. I talked to some companies to try to get them to start a line of work wear for women. No one jumped at it.

One guy said, “If you’re serious about it, why don’t you start your own business?”

So at the age of 25, I very naively asked myself, “Well, starting a business, how hard can this be?”

If you can’t hear the clip, click here.

Sarah’s advice for other founders is straightforward:

Be true and be brave.

There’s a lot of scary things out there, especially getting into a world or an industry that you don’t know and don’t have experience in but having a lot of courage and integrity and going into that … 

We could all afford those things, right? We don’t need to take a loan for more courage. We can do that. We just have to trust our gut too. That’s a big one, I make all my decisions just based on what feels right which may or may not be advisable to everyone but so far it’s worked for us. 

If you can’t hear the clip, click here.

—

While he kept trying to get a bank job, Steve worked the door at clubs in Hong Kong, throwing parties and events that became the toast of the town. He never planned to start a company:

I started … with this delusion that I would get to rich people. I started putting on parties and clubs and events. And people would hire me to put on these events with the idea that if I captured enough rich people, that would do it. Without it realizing it, people were saying, “Can you do this? …” “Do you know people in Monaco?” “Do you know people in London?”  

So before it actually became a concept as an industry, I was becoming this international concierge. I was … flying to Macau and flying up to Japan to … try and find the coolest places.

Then I would send people there and go, “Oh yeah, you know because of my recommendation, that’s $1,000 but if you want me to get you a penthouse and a chauffeur … then that’s 10 grand.  

So I was making it up on the fly. And (at the) parties that I would throw, because I was on the door and I like humble people, I would give people a password to get into my club. And one of the passwords was finish this line, “One fish, two fish, red fish…” 

So people would walk up to the door, it would be me and another meathead on the door and they would say, “blue fish,” and I would let them in.

And if they didn’t and they were too arrogant and would go, “I’m here for the party,” we’d say, “I’m sorry. There’s no party here. I don’t know what you’re talking about.” And there’d be a line of people getting in and the door would open up and music would barrel out. …

That’s how it started. It was a password.

If you can’t hear the clip, click here.

The company quickly acquired some mystique, but not by design:

We launched … a website and we forgot to put an email on there and a phone number. Everyone was in the media going, “Oh, that’s so exclusive. They haven’t even got a phone number.” We forgot to put it on there!

…No one could contact us and … this myth suddenly grew … We didn’t have business cards because we thought no one would take us seriously so again people thought we were that exclusive because we didn’t even have cards.

If you can’t hear the clip, click here.

Like Sarah, Steve’s advice to other founders is simple:

Keep your word. … There is no better asset or title than someone turning round and going, “That Steve, he keeps his word.” … 

(Nowadays) I think people feel that it’s OK to let someone down and then apologize about it and then try again. I think if you’ve got someone that keeps their word no matter what, even if you lose money because you priced it wrong, nothing better than your credibility.

… I held onto that (maxim) from an early stage, and it worked well for me.

If you can’t hear the clip, click here.

Listen to my full interviews with Sarah and Steve by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Carmen Medina, former director of the Center for the Study of Intelligence at the Central Intelligence Agency and co-author of Rebels at Work; and Don Burke, Intellipedia Doyen for the Central Intelligence Agency

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show | Leave a comment »

If you’re a technical startup founder, one of the painful lessons is that it’s not enough just to build a great product. You must also understand the value the product provides customers (along with the rest of your business model.)

And going for crowdfunding before you do customer discovery with customers can lock you into the wrong idea too early.

These topics were the focus of interviews with the latest guests on Entrepreneurs are Everywhere, my radio show on SiriusXM Channel 111 (airing weekly Thursdays at 1 pm Pacific, 4 pm Eastern).  The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Tiffani Bell

Joining me in the Stanford University studio were:

• Tiffani Bell, co-founder of the Detroit Water Project
• Clay Hebert, founder of Crowdfunding Hacks

Clay Hebert

Listen to the full interviews by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Clips from their interviews are below.

Tiffani Bell is the co-founder and Executive Director of the Detroit Water Project, a platform that connects donors to people in Detroit and Baltimore in need of assistance paying their water bills. Since its founding in 2014, more than 10,000 people have given to turn the water back on for over 1,000 families. Tiffani was also a 2014 Code for America Fellow working with the City of Atlanta.

Her first startup, Pencil You In, grew from a personal need to schedule hair appointments. It ultimately failed because she was focused on engineering the product, but didn’t validate the rest of her business model (product/market fit, distribution channel, customer acquisition, etc.)

I should have realized earlier that I was building a marketplace… I could have built what now is like, Thumbtack or ServiceMagic or something like that. Instead, I went the Software as a Service route and tried to charge for what was a commodity product. There was nothing special about it; you could just book appointments on it. I tried to charge for that and nobody wanted to pay for it.

(Instead) I could have given it away and then done something around a marketplace sort of thing and charged for it.

… A marketplace would have worked (like this:) if you book a house cleaner through Pencil You In, we could have taken a percentage of that fee. … We could have let you have the software for free, basically.

… I didn’t (know that was possible) at the time but later I read things and just saw what was happening with competitors. …

It was like, “Duh, we should have done that!”

If you can’t hear the clip, click here.

Clay Hebert is the founder of Crowdfunding Hacks, which helps startups fund their dreams using crowdfunding platforms like Kickstarter and Indiegogo. He also is an advisor to corporations and startups, having spent a decade at the consulting firm Accenture. 

Clay stressed that crowdfunding should not replace Customer Discovery:

… Customer Development and Customer Discovery need to be moved earlier – before you launch. I always say crowdfunding projects get funded before they launch, not while they’re live… meaning conceptually you need to launch to a tribe of people that you’ve already have identified. Yore launching to the customers you’ve already discovered and validated your ideas. 

… you need to do the customer discovery and validation ahead of time, and then crowdfunded can come in at the point in the process where, it’s not a replacement for it, but it can be a great validation of the idea. 

Steve: I run into a lot of students who say, “Hey, why do I need to get out of the building, I just started something on Kickstarter?” 

Clay: And they’re almost never successful.

Steve: Or worse… some are successful, and now they’re forced to either fail very publicly and messily, or have to deliver something that they no longer are passionate about.

Clay: That’s a very, very good point. … In an ideal world, by the time you click publish on Kickstarter or IndieGoGo, you’ve been iterating, working on this thing for a year or more, and collecting emails and building permissions.

If you can’t hear the clip, click here.

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The Detroit Water Project began after Tiffani read about problems Detroit families were having paying their water bills. So far, the startup has been able to help more than 1,000 families. Talking with those people gave Tiffani and her team a deeper understanding of their needs, as well as ideas for other ways they might help.

The idea that people can’t pay their water bills was foreign originally, but just digging deeper into people’s situations (we’ve learned so much more). … For example, in Detroit and Baltimore you can lose your kids over not having water in your house. … They can be taken away from you through Child Protective Services. The house can be declared condemned because it doesn’t have running water. 

… We didn’t know these things (initially). 

We had several families who didn’t have electricity or water. We’ve had folks where they are in between jobs or their hours have been cut. We didn’t know any of these things, so it’s been interesting to dig into situations and do Customer Development … take time to talk to people, whenever they apply, just to figure out what’s (their) situation.  

…People originally said this could be a Band-Aid, but we’re thinking more in the future now about how to help people according to what their specific situations are.

If you can’t hear the clip, click here.

Having developed a passion for coding when she was very young, entrepreneurship seemed a natural leap for Tiffani:

I started reading Wired (magazine) around probably eighth grade. … I was totally a nerd. That was probably around ’99, which was the first dot.com boom, so I read about all those people doing all those things, and I figured out that, “They’re doing the same thing I am.”

(She told herself) “They’re building more complicated stuff, but they’re the skills are the same, so why couldn’t I do the same thing?”

I didn’t know the first thing about how to start a company, but I kept reading Wired and learning about all the different venture capital firms and what people were getting funded for and that sort of thing.

If you can’t hear the clip, click here.

Like a lot of founders, she has no interest in a traditional job:

I don’t have the personality to be an employee. I ask a lot of questions and (keep) … weird hours.… I could never work for someone else. I need to be my own boss.

… I have a personality where I just like to do things. I don’t like to be in meetings. I like to make stuff happen … (as in) we have an idea, let’s go build it and try it out.  

In companies that’s not, sometimes, welcome and accepted. … I have a bias for action and … if I see a problem, I want to solve it. Sometimes it doesn’t work well in companies. You need to respect authority and hierarchy and things of that nature.  I’ve had, mostly, jobs where I’ve had the ability to … do my own thing. … I’ve been lucky that way.

If you can’t hear the clip, click here.

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Clay’s father founded a furniture business that ultimately failed. Watching his father struggle had a strong influence on Clay and his brothers:

Me and (my brothers) saw my dad as this very smart, very hardworking guy. And before he was an entrepreneur, when he was at a foundry, things were going really well, and he was promoted to foreman.

For many years I sort of got it wrong, I thought: here’s this guy who’s really smart and really hardworking, and yet the entrepreneurship thing isn’t working. I think (we) rejected the path of entrepreneurship because our one big data point was that even if you’re smart and hardworking it may not work. …

Steve: Is that what drove you to corporate consulting.

Clay: It is, absolutely. …

Steve: You said anything but entrepreneurship?  

Clay: Yeah.

If you can’t hear the clip, click here.

Before starting Crowdfunding Hacks, Clay worked as an intrapreneur:

I tried for 5 years to bring (Lean Startup-style) thinking inside of Accenture (with) very limited success.

… Because Accenture as an organization … works much better as a machine with interchangeable people. If they can unplug me from the project in Boston, and plug me into the project in Chicago with no training and no time lost, that’s great.  

What was frustrating to me was the tagline for the entire company at the time was “Innovation Delivered” and here I felt like I’d found some of the secret scrolls of bringing some of this creative thinking and innovation inside, and yet it was much more a cookie-cutter process making everybody the same so that they were sustainable in any other project and quickly changeable. 

If you can’t hear the clip, click here.

Would-be startup founders working in day jobs shouldn’t put off their startup dreams, Clay said:

Start a blog, throw up a landing page for an idea that you have, do it nights and weekends.

When we talk about places to hide (from your dreams), one way to hide is convincing yourself that: I have a corporate job, I have a spouse and kids, and I don’t have time to do this other thing.  

You and I know lots of people who made the time – sometimes from 9 pm to 2 am – to get started working on their dream. Because Lean Startup methods, Crowdfunding, Amazon Web Services and the Internet that connects us all, is bringing the cost of failure to zero.  

You don’t need money; you just need to carve out a little bit of time. Chase that idea, stop hiding, carve out the time you need. … I always tell people … “99.9% of people don’t care at all about what you’re building, that’s great news, not bad news, because all you have to do is go find that .1% and that’s actually plenty.”

If you can’t hear the clip, click here.

Listen to my full interviews with Tiffani and Clay by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Sarah Calhoun, founder of Red Ants Pants workwear for women and Steve Sims, founder of Bluefish executive concierge service.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show | 2 Comments »

Silicon Valley’s pay-it-forward culture means that others will help when you’re starting up. Yet this same network of connected people affects who gets funded, how startup teams form, and who gets hired. 

And a company culture and values need to be design and engineered just like the product. 

These topics were the focus of interviews with the latest guests on Entrepreneurs are Everywhere, my radio show on SiriusXM Channel 111 (airing weekly Thursdays at 1 pm Pacific, 4 pm Eastern.)  The show follows the journeys of founders sharing their experiences of what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs, lows that pushed them forward.

Wayne Sutton

Joining me this week at the Stanford University studio were:

• Wayne Sutton, co-founder of BUILDUP VC
• Dave Kashen, co-founder and CEO of Worklife

Dave Kashen

Listen to the full interviews by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Clips from their interviews are below:

Wayne Sutton is a partner and co-founder of BUILDUP VC, a Bay Area non-profit that connects, mentors, and educates underrepresented technology entrepreneurs. He is also the co-founder of Tech Inclusion, dedicated to exploring innovative solutions to  diversity and inclusion in tech.

Looking to create their accelerator/incubator, Wayne and seven other founders rented a Silicon Valley house together one summer.

The experience proved to be a wealth of learning opportunities, but one lesson in particular stood out:

… I learned (from) that experience that if you show that you’re willing to put in the work and the effort, there are mentors and people out there willing to volunteer to help you, but you have to take a risk. You have to put yourself out there.

…By creating the BUILDUP VC incubator and accelerator … we’re got into the business of providing education and access. We learned that people were willing to provide us resources, provide mentorships, and open their doors. …It proved to us and our companies that … if you are willing to take the risk of coming to Silicon Valley and work on your startup, people want to help.

If you can’t hear the clip, click here.

Dave Kashen is co-founder & CEO of Worklife, a Y Combinator-funded startup whose mission to have everyone love their job. Their first product aims to make meetings more productive. Prior to Worklife, Dave was a CEO coach, leadership trainer and culture consultant to some of Silicon Valley’s fastest-growing technology companies. Previously, he was co-founder of Wellsphere, an online health and wellness company that grew to over 6 million monthly visitors.

He faced several challenges with Wellsphere early on:

We were a little bit too early in a couple different dimensions so I learned the importance of timing…  

In ’05, social networking was not quite as prevalent as is it today. The idea of a social network inside of an organization wasn’t a thing yet so that was a little bit scary and even the linkage between healthy behaviors and saving healthcare costs and becoming more productive and being less absent and all of that, a lot of that research has emerged over the last 10 years. 

(Just as important as the product) we did not pay a lot of attention and we’re not particularly intentional about how we were building the company (and its culture.)  

We had this mission. We were both non-technical co-founders so that had its own challenges. We were probably a little bit arrogant in our thinking of what we could create and how we could lead developers to create these ideas that we have.

We were also arrogant in the sense of we have this idea of how the thing should work and we built it … This was a little bit before Lean Startup was very popular, so we just built this thing that we thought would work and lo and behold, it didn’t work. …The features didn’t match what ultimately the customers would buy or wanted.

If you can’t hear the clip, click here.

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Wayne set his sights on entrepreneurship when he was a teen, working in the tobacco fields of North Carolina:

I remember working in the tobacco field one morning. It was about 10 am, and it was hot, maybe one of the hottest summers that season. It was maybe 100 degrees. … around me, I saw people my father’s age, I saw some family members as well, and people that could have been even my grandfather’s age working in the field with me.

I understood that this was their opportunity to make money, and in their generation there wasn’t many other opportunities besides farming for them to make money.

I looked at myself, and was like, “When I get older, I’m not going to be working in a tobacco field.” I wanted my own company. …I wanted to be in charge of my own destiny, and that started my drive.

If you can’t hear the clip, click here.

He first startup idea had potential, but he gave up on it too quickly:

It was going to ESPN before ESPN. … North Carolina is big basketball country, a big basketball world like ACC, Duke, UNC. I met these two athletes … one had a little bit of stint in the NBA, the other one had just graduated college and played overseas a little bit. I was like, “… It’s going to be big. People are going to go online and vote for their favorite athlete and all, post pictures.” This was around 2001.

… They were like, “Oh, this sounds good and everything, but I’m not sure if this thing is going to work out.” … I bought the domain and started doing events… launched a website, and was doing polls (but his co-founders gave up on it, and so Wayne did as well).

… The lesson there is that if I believed in the vision of what things could be. … You have to realize that you may be too early, the market may not be ready, but also … there’s benefit in sticking it out. I look at that lesson (and think) heaven knows what could’ve happened if I would have stuck it out.

If you can’t hear the clip, click here.

Wayne also spoke about working to increase the number of minorities in tech:

It’s not an easy problem to solve. It is not just one thing, -… it’s not just about (a lack of) people in the pipeline, its not just as a problem in terms of biases. Not just a problem in terms of access to technology. (It’s all of these.)

We don’t think about that in 2016, everybody doesn’t have a smartphone. Everybody doesn’t have hi-speed Internet. Everybody doesn’t have or is even aware of success stories such as Steve Blank or the process of launching a startup.  

Even though we have all this information online, not everybody is aware or have access to this, and (on top of this there) is lack of role models … especially for underrepresented entrepreneurs. And it’s a culture issue.  

…Look at the history of America and what has been the role models or the examples of a way out for a lot of underrepresented entrepreneurs minorities? It has been sports and entertainment, not tech.

I feel like now we’re beginning to see people focus a little bit more on tech, but it’s not just one thing. It’s all those pieces. …

…(Silicon Valley) is a network-based system — about who you know … who gets funded, how teams are forms, who gets hired in certain companies, how promotions (are determined) — that is all relationship-based.

Steve:  You think there is implicit rather than explicit bias?

Wayne: Yes.

Steve: That’s an interesting … It’s truly an ‘old boy’ network.

Wayne: Yes. 

Steve: Even though the old boys are not very old. 

Wayne: No.

If you can’t hear the clip, click here.

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Right out of college, Dave chased a dream of being rich, becoming an investment banker. It turned out to be the wrong path for him.

Long Island, (where Dave grew up, is) a fairly materialistic place and I was reasonably intelligent, so everyone said to me you’re going to be a millionaire. I thought that was what I was supposed to become, and so that kind of got drilled in my head. … The point was to make lots of money and that’s what led to happiness, and that was kind of the mindset for a while.

…my dad was a doctor, my mom was a teacher. … They were divorced when I was 5, so the distinction between my dad’s lifestyle and my mom’s was very apparent to me. I think that was part of the fuel, but there was no entrepreneurs, no real business people in the family, no finance people, I didn’t know what investment banking was, but there was this really, I think, deeply embedded mindset of like you’re supposed to become wealthy and do high-status things, and that’s how you become happy.  

If you can’t hear the clip, click here. 

Wellsphere found success, but not in the way Dave had anticipated.

…We pivoted the company toward what the market wanted, and what our users and customer wanted, but away from my initial vision and passion.

It worked in the sense of we built value. We were able to grow really quickly from a very small to 6 million monthly visitors. We found a core distribution model that worked in terms of long-tail search. … but by the time we did, it was no longer aligned with my passion, and the vision of the impact I wanted to have.  

In some way, part of the decision to sell the company at that time was because I lost that alignment. I think we could have built more value, had we continued.

Steve: That’s another great lesson. If you’ve founded something, but find you’re no longer passionate about what you’re doing, it becomes just a job.

If you can’t hear the clip, click here.

The experience led him to create Worklife and, he said, helped him become a better manager:

I’m way more conscious about hiring for values and listening for alignment (with the company’s values). … As I moved from (a founder of my own company) into the world of coaching, and training, I’ve worked with clients on discovering their own (personal) values and their company values, then devising systems and processes used to make sure that 1) that they’re hiring for values; 2) they’re actually living them day to day.

As a coach over the last five years (I learned) that the way to motivate somebody is to have the situation occur to them as if it’s in their best interest. …. When I talk about values, in part it’s trying to understand, what does this person value and do those things overlap with the experience would be like working here. …

If you can’t hear the clip, click here.

Listen to my full interviews with Wayne and Dave by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Tiffani Bell, co-founder of the Detroit Water Project; and Clay Hebert, founder of Crowdfunding Hacks.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

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Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big company’s. Send an email to terri@kandsranch.com describing your entrepreneurial journey,

Filed under: Customer Development, SiriusXM Radio Show | 1 Comment »