Move. Faster!

Today we were lucky enough to get some time with Mike Cassidy at Google.  He was far from the expected big tech management speaker.  Mike’s a veteran leader of four successful startups (Stylus Innovation, Direct Hit, Xfire, and Ruba) and came to Google by way of acquisition.  Now he’s part of the clandestine Google X Labs which works on big picture projects like the driverless car. 

Mike is the rare person that carries himself and his interactions with urgency.  Everything from his presentation to conversation style screamed “Lets get going!”.  Quite appropriately the theme of his (well known) talk was on the role of speed as a central business strategy.  My takeaways:

• Raise before an inflection point in valuation – it lowers closing cost/time
• Move fast and get all decision makes in the room before pitching
• Get contracts and LOIs from enterprise customers
• If you haven’t built it at least have a plan down to concrete actionable details before pitching
• Hire experienced people – no amount of all-nighters can make up for the speed 5-10 years of experience programming will bring.
• Make an offer same day.  Draft the offer in the morning, complete a reference check at noon (if the interviews are going well), and hand the candidate an offer letter on the way out.  Ask for an answer the next morning – you don’t want to let them shop it around.
• Set up all the infrastructure an employee needs day one so they can hit the ground running.
• Probability of a deal closing falls 10% every day in doesn’t close.  Put pressure of the other party to close or cut your losses early.
• Pivot hard and fast.  3/4 of Mike’s companies were very different from the original idea.
• Find great people with great ideas. 3/4 of Mike’s companies were initiated by his co founders (housemate/fellow alum/industry expert).  He also mentioned scanning the MIT 50K (now 100K) site for interesting projects: http://www.mit100k.org/accelerate/2013_semi_finalists/
• Start small – his first market was only $20M (telephony). You learn the ropes of a business and can build great personal value in that space.
• CAC < LTV.  The CAC (Cost of Acquiring a Customer) must be less than the LTV (LifeTime value).  This seems obvious, but it’s important to plan for and have a good feel for how this metric is evolving in your business.

From the launch timeline Mike laid out (above) I feel pretty good about BuildAFlock.  On a small/prefunded scale we’ve follows this pretty closely to get from ideation to launch in about 3 months.  However, I’m very curious to see if we can maintain this pace at a Series A scale. If you’d like to take a look at his slides I found an old version here (content looks very similar):

http://www.slideshare.net/dmc500hats/best-strategy-is-speed-startup2startup-may-2008

My Sales Checklist (Part 1 – Preparation)

As I’ve been focusing more of my time on pure sales at Flock and bringing some new folks up to speed on basic sales, I’ve began to compile a basic checklist for the sales process.

Elevator Pitch – This is a critical part of your business.  Generally this should be 3 lines (for email/events/introductions):

1. Who you are
2. What you do
3. Why you want to talk to the customer

That’s it.  Keep it short and sweet – this sets the table for the rest of the conversation. 

Practice  - Stand in front of a mirror, look yourself in the eye, and practice until it’s perfect. By the time you get in front of a customer you should be able to communicate your value on autopilot. This enables the rest of your brain to focus on the customers, their reactions, and what the next steps are.

Script – After the elevator pitch there should be no more than three key points you want the customer to remember.  These should serve as your checklist – don’t blurt them out all at once or in a list, but be sure to hit each point by the end of the conversation.

FAQ – Any engaged customer will have questions.  Luckily, most customers have the same questions.  Over the course of just a few meetings you’ll get a good sense for the core common questions.  Get some great answers prepared and

Make a List (and check it twice) – I use a simple excel sheet with customer names, companies, emails, phone numbers, and notes as the columns.  This is essentially a super simple CRM system.  Your initial list can most often be created through web searches or directories. 

Bonus: Have a Good Hook – Any customer base has some aspirational goal (in IT this would be reducing costs, in sales it’s meeting more leads).  This is what you should lead with.  If you can open your conversation with this goal – their next question will be “Sounds great – how will you do that?”  You’ve now captured their full interest and set the table for the rest of your conversation.

Non-Technical Founders

The most common question I get asked by entrepreneurs is what is the role of a non-technical founder?  In today’s market technical talent has become increasingly scarce with the trickle of top talent unable to meet skyrocketing demands.  It’s great to see engineers recognized for the outsized contribution they can make.  However, the pendulum has swung so far away from the business side of an enterprise that many have lost sight of the essential value a non-technical founder brings to a company.

And, for the first time in a long time, I find myself in the role of a non-technical founder with Flock (BuildAFlock.com).  Despite being a technical guy, I haven’t touched a line of code or a pixel of the design.  So, what do I do with my time?

I sell.

At a startup there are really only two jobs – building and selling.  That’s it.

A group of sales guys can easily find themselves with a customer base soon to be disappointed by a late mediocre product and no ability to rapidly iterate.  Identifying great engineers is simply a matter reviewing their past work.  What have they done?  Is it still running?  Even if you’re non-technical you’ll instantly recognize the care and high standards in any product that are the hallmarks of true talent.

A group of engineers without sales will tend to let product scope spiral out of control and end up with product that is a technical phenom that no customer wants.  However, proving value on the non-technical side is much more difficult.  Sales numbers are highly variable based on the market and product.

So, what can a non-technical founder bring to the table to attract engineers?  Customers!  I’ve heard literally hundreds of people with great ideas that have huge unstoppable potential.  I rarely hear from them twice.  However, if you take the time to take your idea into the real world and do some preselling you will be unstoppable. 

This process helps to refine your designs (inevitably your first cut will be wrong) before the first line of code is written.  And, the second an engineer finishes building V1 you’ll have a ready base of users eager to test it out.  So, rather than a half baked idea, you’ve proven the merit of your idea, gathered a customer base, and most important, proven your value in the venture to your future partner.

I challenge every early entrepreneur to pick a role – builder or a seller.  Don’t fall into the trap of trying to be ‘CEO’ or ‘manager of the team’.  Also, if you’re not a designer (ie not the person pushing pixels in Photoshop) don’t be the person running around with a set of wireframes and nothing else.

If you’re serious about creating a venture of any significance – build or sell.