Welcome, my name is Roy Rodenstein and I love helping entrepreneurs. With this blog I aim to share what I've learned to help others start, and win. My hope is to develop how2startup into a wiki for the startup community.

Starting from The Heart: Bill Warner’s Founding Advice

September 28th, 2010    Share

Bill Warner Startups from the Heart Session

A few months ago I was a mentor at Startup Weekend and had the privilege of co-leading a session with Bill Warner. Besides being one of the most active and SF-connected angels in Boston, Bill is of course one of our entrepreneurial treasures in Boston, having founded Avid -which any video/photo/creative person or Mac fan will revere- as well as Wildfire, which besides being ahead of its time gave a big boost to Rich Miner, who went on to co-found Android. So, co-lead is a bit of an overstatement- as Bill has his Startups from the Heart approach down and I was happy to see it in person and contribute where relevant. I came away thinking that it’s definitely a worthwhile exercise for founders to go through early on.

Before that session I had heard of Startups from the Heart but hadn’t really understood what the idea was or how it worked. While not a complicated exercise, it definitely benefits from some discipline and faciliation. I’ll do my best here to explain it as well as my take.

Bill asks, not necessarily in this order:

1) What is your Intention?

My interpretation of this, without getting into semantics, is- “Why are you starting this company? What change would you like to see in the world as a result?” I think one of the obstacles some founders face with this question is that it can come across as a purely do-gooding bias. I think that is an aspect, and if it’s a core part of your startup that is fantastic, but I believe that this question is very relevant regardless. You need to be setting out to create a specific change and have real passion and intention to achieve it.

The #1 trip-up that the Startup Weekend participants faced here was getting into their product mindset right away. For example, a meeting-scheduling startup might be founded with this intention-

right: I intend to save people time and stress by taking the hassle out of setting up meetings

wrong: I intend to build a calendar for people to pick time slots for meetings

This is the key, though. THIS INTENTION IS ONLY “RIGHT” IF IT’S WHAT YOU ACTUALLY INTEND! The point of the exercise is not to change your mind, “get you to think big” or “sway you toward social responsibility.” It’s to make sure you are cognizant and can articulate your founding impetus. While this exercise may seem a bit silly and obvious to some, I think there is definite value in crystallizing and committing to what you intend. It will be a bedrock that you can refer to later in sharing your vision with others and in making many key decisions in your startup.

2) What do you Believe?

This question is meant to get you to clarify the foundation for your Intention. Again, it’s not intended (in my view, at least) to force you into “believing” something do-gooding or world-changing, but to make explicit the beliefs that underlie what you’re setting out to do. For example, Alex Patriquin at Wattzy did a great job with this in a pitch of his I saw when helping with the entrants for Angel Bootcamp. He talked about how he believed that homeowners were being cheated out of a lot of money by inefficient energy appliances and homebuilding practices, and that he was personally fed up with his high electric bills and difficulty in taking control of the problem. This would lead pretty directly into what he Intends to do…

While a bit redundant perhaps with Intention, I think these two questions work together to really clarify your original motives. These are things that, years down the road, you’ll hopefully be able to hang your hat on. For example, with Going, my cofounders -Rebecca and Geoff- and I Believed that big cities were full of undiscovered treasures, with many more interesting and fulfilling things to do for everyone regardless of their interest than any person could find, remember, learn about, plan for, etc. And thus we set out with the Intent to make it much easier for people to learn about all the amazing, fun, interesting things to do in their city, and also to help the people creating those activities -museums, DJs, charities, kickball leagues, restaurants, rollerskating event planners- find their audience in a more direct way.

3) Who are your People?

I think this is one of the key questions in Bill’s approach, and particularly close to my heart as I’m a huge advocate of Customer Development. Even with an Intention and Belief, it’s important to be more explicit about who you care about, whose life you are trying to impact. “Everyone” is usually not a good answer. There usually is some group you care more about, if you really think it through. It’s ok if this group is people similar to you, again the idea is to reflect and verbalize your thoughts, not necessarily to change them. But if you don’t feel like you are setting out to address the needs of a certain group, or groups, of People, that is a major red flag.

I was speaking with a top micro-VC firm recently about a potential investment, and this came up as a key criterion. If a company has a great Intention, even a good product embodying it, but doesn’t have a People, it’s a red flag. A startup that doesn’t set out thinking about who will use their product, who needs it, who will benefit, as a constant element of what they are doing, is scary. Without the user or customer as a core part of a company’s foundation it will be much harder to do Customer Development, decide what a Minimum Viable Product is, when Product-Market Fit has been achieved, etc. And as a founder, it’s much less likely you will be excited and satisfied by what you’re doing in the long run if you’re not doing it for anyone in particular (besides yourself).

4) What is your Invention?

While Bill had this question earlier, perhaps because Intention and Invention sound good together :) I think it’s most appropriate as the last one. The three previous questions feed into this one. Ok great, you intend to do something, it’s based on certain beliefs/assumptions/tenets, and it’s *for* someone(s). Now, let’s talk about what it is… the thing, the product.

What was interesting and might surprise you after the “mushy” questions above is that this was the hardest one for the Startup Weekend founders to articulate. The reason was that Bill required -totally spot-on the money- that the description of the invention be jargon-free. It must be explained in a way that anyone, especially your People, can understand. Bill mentioned that women tend to be better at this exercise, and I can see that. Most people, even non-hacker founders, immediately dove into features, buzzwords, and other in-the-weeds aspects of their product. For example, take Tungle.me-

bad: It’s a system for self-service schedule management that integrates with 3rd party sites via iCal and other standards.

good: It lets people who want to meet with you see when you’re free (but not that you’re busy at 3 taking Roofus to the doggie spa) and request a specific meeting time that you can then approve.

Bill introduced a great “scaffolding” (in educational theory terminology) or technique to help the founders with this one. He said, imagine you’re at Show & Tell day in a 3rd grade classroom, and you have to tell the kids what you do. This had a huge impact… the founders now instinctively started simplifying their language and talking in human terms that really got at the benefit vs. buzzwords of their invention. I definitely recommend this.

How Starting from the Heart is Relevant

I believe that having gone through the above exercises will help you in many ways, including practical ones, as you build your startup. Who should you hire? People that share some of your beliefs and intentions, ideally, and that can understand your people. What features should you add to your MVP? Ones that are aligned with beliefs/intentions/people.

Of course companies can and should pivot. If the pivot is small, your Intention and Beliefs may not have changed, but perhaps your People and Invention have. If your pivot is large, you can do this exercise from the top to make sure the new foundation is explicit. You’d be surprised how easy it is, two years into a startup, to have pivoted 5 times and be operating on fumes and gut with no anchor in these underlying keystones anymore. That makes it really hard for both you and your team to make good decisions quickly and can get you mired in endless debates because any idea can have equal merit if they’re not easily measured against a core yardstick.

Conclusion

While there are many frameworks for framing early startups, and you should take advantage of several, I think that Startups from the Heart is one of the simplest and most useful ones. The fact that it also can emphasize social good is a bonus. I really enjoyed seeing Bill in action and hold the entrepreneurs’ rapt attention. I’m doing my part by doing 1-on-1 mentoring sessions at his upcoming MassTCL Unconference, and look forward to seeing some of you there!

Other good posts on this topic:

photo credit: boston.startupweekend.org

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My Year As An Angel

September 13th, 2010    Share

I’ve been supporting startups for a long time, but was very much heads-down on my own -Going- for several years. Too much so, I think. I’ve also helped a number of VCs on due diligence, deal sourcing, etc. but had not done my own angel investments. Since the acquisition by AOL and initial integration, I’ve had a chance to come out of “blinders on” mode and get involved in several ways.

In addition to my job at AOL/Going, I’m currently a startup mentor for MassChallenge, for the Founder Institute, and for ASTIA (a great nonprofit for women-led startups in NYC with past successes like Mobissimo and Scout Labs) and happy to be a Hacker Angel finally putting some money where my mouth is :) ) I have to say, it’s been absolutely awesome to be involved with so many great entrepreneurs and try to help where I can. I’m going to leave my views on the current hot topics -superangels, VCs, converts, etc.- for another day. Today I’m very excited to finally be able to talk about my first angel investments, a couple of which have recently opened up more publically!

Location analytics - Locately

Locately - An awesome Boston company and MassChallenge finalist, Locately (formerly Cadio Mobile) just announced their $300k angel round. Locately is a location analytics company, focused squarely on businesses. For example, they help retailers figure out where to open their next store, whether their customers are also visiting competitors’ branches, and what other locations around town are good cross-promotion channels. The great thing about their model is it’s phone-agnostic and platform-agnostic, not reliant on downloading apps and sporadic check-ins, and has already won them an SBIR grant from the National Science Foundation. Founders Thaddeus, Eric and Drew are smart but pragmatic, coming from places like MIT and Endeca and have revenue in the door and deals with Nielsen, Havas and Harris. I participated in the round with my fellow Hacker Angels Gabe Weinberg, Jeff Miller and Joshua Schachter, along with David Cancel, Mike Volpe, Reed Sturtevant and Katie Rae‘s Project 11 and others. I’m proud to say HackerAngels led the round- great work, Gabe.

Video Transcriptions for SEO - SpeakerText

SpeakerText - Pretty much anyone who’s been on the internet in 2010 has heard of these guys. SpeakerText came out of a journalist’s experiences (with a slight detour fighting massive forest fires) and helps video publishers make their videos more usable. With ST 2.0, unveiled on TechCrunch last week by Erick Schonfeld, it’s easy to navigate videos by an accurate text transcript, jump to key points out of an hourlong video, and share clips with friends. Their transcription technology combines ASR with smart crowdsourcing, so it’s robust to a lot of the funny errors that automated transcripts have.  This round is not announced yet but I’m very excited to be backing a guy who knows how to shake the world up, Matt Mireles, with rockstars in the making Matt Swanson and Tyler Kieft. I led the round, which was the first outside money in, with fellow HackerAngel Jeff Miller and some other greats to be announced.

Social profiles in gmail - Rapportive

Rapportive - Founders, if you’re looking to raise money, there’s no better example this year than Rahul Vohra, founder/ceo of Rapportive. Whether winning top pitch awards at The Next Web, raves at Open Angel Forum, or getting the best headline of 2010 from ReadWriteWeb editor Marshall Kirkpatrick -“Stop what you are doing and install this plugin”-, Rahul and co-founders Martin and Sam did it all. Seriously, if you’re not using Rapportive, do stop what you’re doing and install it. It shows you a picture of who you’re emailing with, their latest tweets, one-click connect on LinkedIn, and even more goodness for SMBs’ service and sales groups. The $1M round was announced recently by Jason Kinkaid at TC, and I’m thrilled to have co-invested with Dharmesh Shah, Shervin Pishevar, Paul Buchheit, Jason Calacanis, David Cancel, Gary Vaynerchuck, Dave McClure’s 500 Startups, Venture Hacks, and the wily Chris Keller. Oh yeah, YCombinator too :)

CIO community for critical IT decisions - xPeerient

xPeerient - You never forget your first, right? I learned about xPeerient through innocent eavesdropping on another couple’s conversation while dancing tango- true story! Why the ‘x’? Why the “Peer”? Boston-based xPeerient is a community for CIOs/CxOs to learn from each other as peers, exchange best practices, and specifically to help each other with purchasing and sourcing. If you’re about to place an order for 200 phone lines, or buy 10 licenses to Oracle 802.11g, you want to know who else has recently made a similar purchase… how’s it working out for them… what negotiation tactics got them a good price… xPeerient supports all this in a safe, private community, and then lets vendors make special offers to targeted, qualified purchasers. Mark Hall, the founder/CEO, was head of global IT at IDC as well as CIO of CIO Magazine (how meta :) ) so he knows the space cold and is working with a great founding team. I participated in the second angel round, with co-investors including David Chang of Where and others to be announced along with the funding.


Unnamed YCombinator Stealth Startup – My hands are tied, I can’t talk about this one just yet, but it’s delicious, touchy-feely, always at your service, and kicking serious bicoastal bootay. Stay tooned :)

My first year as an angel is still going, and I hope to have more to announce soon. If you’re an entrepreneur looking for advice, feedback, or funding, don’t hesitate to hit us up at HackerAngels.

photo credit: Horia Varlan
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