The tech giants of today started as one or two-person ideas not long ago. We’ve met many young companies and noticed that startups with the following characteristics have the best shot of becoming enduring companies.

Clarity of purpose Summarize the company’s business on the back of a business card.

Large markets Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop.

Rich customers Target customers who will move fast and pay a premium for a unique offering.

Focus Customers will only buy a simple product with a singular value proposition.

Pain killers Pick the one thing that is of burning importance to the customer, then delight them with a compelling solution.

Think differently Constantly challenge conventional wisdom. Take the contrarian route. Create novel solutions. Outwit the competition.

Team DNA A company’s DNA is set in the first 90 days. Choose your first few hires wisely.

Agility Stealth and speed can beat slow incumbents.

Resilience Hone your ability to bounce back and keep trying.

Frugality Focus spending on what’s critical. Spend only on the priorities and maximize profitability.

Inferno Start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little firepower.

The post Elements of Enduring Companies appeared first on Iftach group.

1. Almost everyone who has been successful in Silicon Valley had no network when they arrived and just figured it out.
   
2. Meeting investors is like a sales funnel. Success is predicated on a repeatable process of building and leveraging connections. It’s nothing special and anyone can do it. There are millions of successful sales people around the globe today.

It’s not who you know: it’s who your network knows. Building and leveraging your network to get intros is the tried and true way to meet investors and get funding.

I’m going to show you the process and explain how I was able to raise a Series A with 0 investors in my contact list.

But first . . .

How not to meet investors

It’s important to precede a list of suggestions with a stern warning of how you can shoot yourself in the foot before you begin.

The amount of bad advice out there about meeting investors is appalling and detrimental to the startup community. It’s hard to know where to start, but here is a brief list of what not to do.

1. Cold Email

When I was a YC partner, I would get emails every day from random people saying “Invest in my startup.”

No intro.

Not even a good explanation of what they do or what’s in it for me.

Nothing.

Have empathy and think about your audience (this applies to all aspects of business communication, not exclusively to investors).

For 99.99% of those inquiries, I just didn’t have time to actually respond to them. Otherwise, I would spend my entire day talking to random people.

Cold email is almost never going to work and is a subpar use of your time — which is the single-most valuable asset for a startup founder. We’ll get more into the opposite of this in the how-to section.

2. Stalking

I wish this went without saying, but unfortunately it doesn’t. One of my partners at YC had a founder show up outside his house.

Not cool.

Don’t track someone through social media, or show up at an investor’s house and expect that to not creep them out (yes, this has happened to me before).

Even if you identified the right investor, this is simply the wrong way to go about it. Investors don’t respond to this — it’s a perverse incentive. Rewarding this type of behavior will lead to its proliferation, even if you found a great fit.

3. Not targeting your search

Don’t waste your time on investors who don’t look at your space, or haven’t shown a propensity for investing at your current stage.

What’s the point?

Investors typically have a focus for both: a) Industry (e.g. biotech, health, enterprise SaaS)

b) Funding round (seed, growth, Series A)

When you contact an investor who doesn’t meet both of your criteria, you may be ruining an opportunity for future consideration.

The importance of networks means your reputation is of utmost importance. If word gets around that you are aimlessly sending cold emails, you might miss out on a future opportunity.

We’ll go over how to find and target the right investors in the next section.

4. Too many (or few)

There’s a delicate balance between highly personalized/targeted outreach, and acknowledging that it’s ultimately a numbers game.

The funnel metaphor couldn’t be more apt.

You’re only going to convert so many, so you need to get enough in the top (the “volume”).

But identifying too many prospects can — intentionally or not — detract from the quality of each individual relationship, thereby limiting your chances of closing a deal.

Find the sweet spot of just enough, but not too many.

5. Favor partners over associates exclusively

A lot of very smart people I really respect say “don’t talk to associates.” I actually disagree with this.

Per the point above about cold email, connections are king — and better than not getting in touch at all.

Obviously talking directly to a partner is preferable, but it’s realistically not always an option. Take what you can get. If you have an “in” with an associate, you’re only one level removed from the investor.

6. Try to “hack” your fundraising

Like all aspects of startups and business, there is no universal hack that magically works. Sure, some people have used counterintuitive and ingenious methods to get investor attention.

But this is not a hack; rather, it’s a different approach to the same principles (which I explain below).

And one last point: you should know whether you’re even ready to talk to investors in the first place. More on that here — Guide to Raising a Series A.

3 Steps to Finding and Meeting Investors

The following 3 steps will be broken down and provide an actionable way for you to start meeting the right investors — aka those who will be interested in your company.

1. Identify the right type of investor and build your list

You don’t want any investors; you want people who have the ideal resume, background, and demonstrated interests in funding your startup.

The answers to two basic questions will guide the filtration process:

• What round am I raising?
• What category of startup am I?

If you’re a biotech company, don’t target investors who haven’t been involved in biotech.

If you’re raising a seed round, don’t target investors who exclusively invest at later stages. You want to respect everyone’s time and carefully curate your list.

This simple rule alone will narrow down your scoping process.

Get as specific as possible

Don’t just stop at the firm.

Target specific partners, angel investors, etc. You want the people with the relevant background. At most firms there are different folks who specialize in different industries.

If you’re a biotech company, target the biotech partner. Choose the person who’s most relevant to you.

Knowing that a certain firm has invested in your space is only the starting point. You want the person with influence who can make a decision about your company.

Organize your list

I usually track my curated list of investors in a Google Sheet with all relevant details.

I don’t want to be too prescriptive about the length of the list, as there’s no magic number. However, I generally find that a minimum of 10, and ideally in the 15–20 range is good. Too many more and it’s hard to do it well and target effectively; much less and you’re not feeding the funnel.

Use your network
Another source of investor leads — and your best bet at actually reaching them — lies within your network.

This requires a distinction. The next point is about using your network to get connected to the investors you’ve already identified. Here, I mean that you actually use that network to identify the investors in the first place (at which point the connection is predetermined).

Talk to your friends and network about your company and lay out your investor criteria (industry + investment stage) to see who someone knows. Odds are, you’ll get multiple leads this way.

2. Find out how to get connected

People are always much more receptive to introductions from people that they know and trust. The “warmer” the person that’s giving you the intro, the better.

Your primary objective with this process is to find the best person to give you an intro; someone who is seen as credible to the investor. Existing investors

If you’ve raised a seed and are targeting a Series A, you have the best type of referral: an investor in your company.

Referrals from investors are the strongest because they’re putting their money where their mouth is.

It’s a good signal if I recommend a startup that I’ve recently become acquainted with to an investor friend; it’s an extremely strong signal if I’ve already put my own cash on the line.

Find out how your current investors can connect you with someone on your list, and use them as a method for building the list in the first place. When you are asking your investors who they can intro you to, feel free to share the Google sheet you are using to track with them. This is much better than just asking ‘What investors do you know that would be interested in my company?’ Odd’s are that that investor doesn’t keep a list of other investors and their interests in their head — it’s much easier for them to look at a list and see who they know.

Why you need double opt-in

There’s an awkward stage between a cold email and a fully-vetted introduction: a “single opt-in” email.

That’s when someone I know makes an unsolicited intro, without first running it by me.

There’s a lot of companies that I’m not interested in meeting with. Maybe I’m not interested in the space, have a conflicting investment, or have soured on the space.

That’s why double opt-in has become a standard best practice for introductions. Both parties get briefed on the other so that when the introduction happens, you can move forward productively.

You don’t waste anyone’s time. The alternative — single opt-in, or none at all — is a waste of everyone’s time. It also puts the recipient in an awkward position. I’ve had to tell a friend or acquaintance “no thanks,” putting everyone in an uncomfortable spot.

Having a person who can act as a connection to an investor isn’t enough. To get an investor’s attention and not be a hindrance, you need the double-opt-in.

3. Use double opt-in to send a super targeted & concise email

Here’s how double-opt-in works:

• Send an email to your connection that can be forwarded.
• What you do
• What makes you special
• A “hook” to get them interested in learning more.Two paragraphs and extremely concise
• Your connection emails the investor to say “Here’s a summary of these guys, do you want an intro?”
• Investor has everything they need (in digestible format) to learn more, or pass.

It’s that simple.

The magic is in the email, the strength of the connection, and the ultra-relevance of the investor (as established in step 1).

This is why I say there are no excuses if you really want to meet investors.

In fact, I anonymized an email I received which lead to to my investment in the company. Check it out on the original article for a great starting point when you start to make investor email connections.

How to meet investors when you really have no connections

I had 0 startup connections when I first started fundraising, resulting in my firm belief that anyone can do it.

Having connections isn’t the requirement; it’s access to connections that matters, and this is something entirely within your control.

1. Lean on your friends (what I did)

The first thing to do is go lean on your friends who are entrepreneurs.

Every entrepreneur has friends who are entrepreneurs.

When I first showed up in Silicon Valley, I leaned on Adam Smith and Matt Brezina, the founders of Xobni, a YC-backed company. They were friends of mine I’d met in Boston, providing my access to the people I needed to meet.

They had raised a seed round from a lot of great angel investors, including Paul Buchheit and others.

We asked them for some intros to their investors and extended network. This got us in touch with Aydin Senkut (Felicis Ventures), and eventually Paul Buchheit (the creator of Gmail).

Those intros led to the initial funding for Justin TV, which eventually morphed into Twitch.

We didn’t have any investor connections, but our friends did — and that was how I got my start in the Valley.

2. Make new connections

Let’s say you just got here and don’t know anyone. No friends, no network, nada.

It’s still doable.

People are intimidated by the concept of “networking,” but meeting people is surprisingly simple.

You can come to the Bay Area and meet entrepreneurs very easily.

Sure, you might not be able to meet Steve Huffman from Reddit or Patrick Collison from Stripe on day one. But, you can meet somebody who’s raised seed money, Series A, maybe even more — in a relatively short period of time.

Meet people at networking dinners and conferences. If it isn’t these folks, then I guarantee they know other people who are founders or angel investors.

You can meet founders/angels and their extended network. Founders and investors have a diversity of friends and partners — including people who personally aren’t founders or investors. You can often get an intro to a founder and investor through one of the senior employees at their companies.

I’ve talked to friends of my employees about startup investment opportunities.

Another idea: lean on people doing an accelerator like Y Combinator or 500 Startups. You either know someone going through the program, or can meet someone who knows someone at any event I described above.

3. Go through an accelerator or bootcamp

You can talk to friends at Y Combinator, 500 Startups, or another accelerator . . . or you can try and get your startup in.

This is a phenomenal way to get access to networks.

It’s like seed fundraising on easy mode.

Based on the strong network you inherit, you have access to practically anyone in Silicon Valley (using the framework from the previous section).

Remember that meeting investors comes down to warm intros from people who the investor trusts. YC provides everything you could want in that respect.

It’s also great credentialing and a brand stamp on you as well. This type of endorsement almost certainly leads to a valuation bump compared to the Silicon Valley average.

Or you can use a fundraising bootcamp. There are many of these — here at Atrium, we have Atrium Scale. This provides startups with the credible intro you need to talk to investors, but also helps you maximize your opportunity with that intro.

You learn how to:

• structure a narrative
• get investor intros
• talk to investors
• determine what kind of metrics you might need to raise your next round.

Then before and after the bootcamp we help secure intros (the “warm lead” you need).

There are plenty of well-connected people who do bootcamps, and this is an excellent complement (or even standalone method) for meeting investors and getting intros.

In Conclusion

Meeting investors seems daunting but is like anything in the startup world: apply first principles thinking and boil it down to the core idea (getting a warm introduction).

There are shortcuts you can take to getting introductions, such as bootcamps like Atrium Scale, but if you put in the work and follow this process you will give your startup a chance.

The post How to Find Investors and Get Email Intros appeared first on Iftach group.

    Treat PR like biz dev.

Once I heard that, everything clicked. Before then I’d wasted mental energy thinking there were special rules for talking to the press and getting great stories for my company. I needed cool and catchy subject lines for my emails. I should have a list of a hundred reporters that I blast with new story ideas. I should write press releases. Needless to say most of these efforts ended in failure. Sound familiar?

Treating PR like business development means developing relationships with reporters as people, getting introduced through warm connections instead of cold emails, and creating a fair value exchange. Here’s the process I advise YC companies to follow when they’re ready for press.

Step One: Generate News

Many founders pitch reporters profiles and stories about their company that could be written today, next week, or next month. Everyone wants a “profile piece” on their startup but most of the time those stories aren’t valuable to reporters. What makes a valuable story is news.

What is News?
News is timely. It makes more sense to talk about it today rather than tomorrow. News attracts attention now and that’s what reporters want. News for most startups can be broken up into these 4 categories:

1. Product Launches and Features
These are things coming out today. Not yesterday, not tomorrow, today. Think Instagram Stories or Facebook Timeline. Typically you are looking for user facing features. In my last company, Socialcam, we would reach out to the press when we released video filters, the ability to add soundtracks to videos, or user profiles.

2. Product/Sales Milestones
This could be hitting a million users, $100k MRR, or maybe a million guests per night. It’s important for this number to be as big as possible (relative to your size of startup) and I’d recommend you sandbag this number – i.e. wait until you’re 25% past the milestone to announce – so that you’re that much closer to announcing the next milestone.

3. Significant BD Deals or Customers
Did you just get a team at Airbnb or Instacart to start using your product or service? Did you partner with GM to build a network of self-driving cars? If you have their permission you should consider announcing it.

4. Fundraising
For better or worse, fundraising is conflated with traction/success so it is a topic people want to read about. If you have raised an angel round or series A/B/etc. most reporters will consider this news and potential employees will notice it, too.

Note: Many of the examples I’ve used might seem a little aggressive for an early stage startup. My goal is not to discourage you but to provide examples that will be generally understood. If you have any new product, milestone, deal, or investment round you should strongly consider pitching it.

Step Two: Make Your Own Press Contacts

Reporters want to talk to CEOs and co-founders–not PR people. As an early stage startup founder you should be building reporter relationships and making pitches. Your success rate will go up and you will actually spend less time and money on PR. Take it from me–we spent over $100,000 on PR agencies and PR people as an early stage startup before we figured this out.

How Do I Make Press Contacts?
Don’t spray and pray. It’s stupid.

The best method to meet a tech reporter is by having the CEO or a co-founder get a warm intro. If you’re a YC founder, the YC founder network is super helpful for these. The reporter you want to meet has definitely written about someone you know. Have them intro you. Proper etiquette is to ask your friend for an intro to only one reporter. If you aren’t a YC founder, make friends with other startups and reach out to your startup community for warm intros.

Here’s what should be in your intro. The reporter should be able to read it and reply in thirty seconds.

• News. Describe your news in one sentence.
• For an exclusive: Let the reporter know you’re offering an exclusive.
• For an embargo: Say when you’re making the announcement. Include the date and time.
• A request for a twenty minute call. Be courteous. You don’t need to meet in person.

When you get the reporter on the phone, be ready with three to five reasons why your news and your company is important. Make them clear and then, at the end of your call, offer your notes and any relevant collateral (screenshots, graphs, logos, pictures, etc). This will provide you with an opportunity to be courteous and provide reporters with the language you prefer.

Step Three: Pitch Those Contacts an Exclusive

Almost all startups should be offering their story as an exclusive to one tech reporter at a time. Your target audience – investors, potential employees, motivated customers, early adopters – exist in high concentration in just a few tech outlets. Getting blanket coverage across a bunch of tech blogs is often not worth the struggle and can piss people off when embargoes are broken.

Step Four: Share News at a Consistent Cadence

There is a philosophy in the PR world that the number of press mentions per story is an important metric. This causes them to put all the best news in one story, infrequently, and try to get the most reporters to write about it at once. For startups I actually think this isn’t the best strategy.

For me, the benefits of PR are hard to measure but they do exist. It’s like funding basic research in science, you can’t predict the advances but they do happen when you invest consistently over time.

To see real startup PR results you’re better off getting one story every month or every other month versus one huge story every year. To do that, don’t combine all of your news into one story, spread it out across multiple stories. Also when you are looking at your stats or sitting in product meetings with your team, keep an eye out for potential news that you can pitch. I tell YC startups to maintain a queue of 3-5 pieces of news that you will want to announce in the coming 6 months. It takes the pressure off you if one of those pieces of news doesn’t get picked up, and it helps you keep a regular cadence of positive news about your company in the press.

Other Things to Keep in Mind

Just like BD, don’t expect to get every meeting and story. When a reporter says “no”, ask yourself why. Were you really giving them news and doing all the other things right? If you’re doing all those things well, you should have a 25-50% success rate.

After six to twelve months of keeping up a good cadence and sharing real news, you should be relatively friendly with two to five reporters. In other words, they’ve written about your company enough that you’ve probably met them in person and certainly they’ll reply to most of your emails.

Later on in your startup’s life there will hopefully become a point when press organically pays attention to your company and wants to proactively write about what you are doing––Dropbox and Airbnb are great examples. At this point, oftentimes it is strategic to start creating distance between the CEO/Founders and the press. This is when PR people can be very helpful. They create a buffer that allows you to be more strategic about what you announce, when, and to whom.

Lastly, remember that doing PR is a very small part of being a good CEO/Founder. Make sure you aren’t dedicating more than 5% of your time to press and don’t expect PR to create observable miracles (tons of users, customers, investment offers, etc). Most of the benefit I’ve received from PR only became obvious weeks or months after a story was posted.

The post Getting Press for Your Startup appeared first on Iftach group.

Management
Before product/market fit, your number one job is to build a great product. But as your company grows past ~25 employees, your main job shifts from building a great product to building a great company.

There is very little management in the beginning, and that actually works well. When there are fewer than ~20 employees, most companies have everyone report to the founder. That’s optimal in the early stage.

But what works well at 20 employees can be disastrous at 40. You want to be aware that you will need structure in place before it’s painfully necessary.

You shouldn’t make the structure complicated. To start, all you need is for every employee to know who their manager is and for everyone to have exactly one manager. Every manager should know who their direct reports are, and you should try to cluster people into teams that make sense.

Clarity and simplicity are important–I wouldn’t try to innovate on management structure. Don’t make it complicated or convoluted. It’s also really important to have a clear mission and clear goals– the better job you do with these, the less management will feel overbearing.

Beyond structure, there are a few other management cases where founders often fail:

Senior People: In the early days, hiring senior people is usually a mistake. As the company starts to scale though, it’s actually valuable to add senior people/executives to the team that have built companies before. Don’t be afraid to do this.

Not Delegating: As companies start to scale, many founders take on too much personally instead of assigning work to other people. This can work for a while, but as your company keeps growing, you become stretched thin and things get done poorly. It’s really important to delegate work and hire needed people as you approach your breaking points.

Delegating Poorly: Many founders try to delegate by having employees do all the grunt work, but then still try to make all the decisions. This doesn’t work well–both for scalability, and for making your employees most effective. Instead, empower employees to make their own decisions. Let them know how you think about a problem, but let them own the decision process. You should feel comfortable trusting them if you’ve hired the right people.

If done right, it’s safe to delegate most things; especially delegate the stuff you don’t want to do. Try not to delegate the one thing you really want to remain involved with though–if it’s something you enjoy or think will benefit a lot from having you involved, you’ll be more satisfied.

Personal Organization: It’s really important to develop a way to keep track of what you need to do and what you need to follow up on with others. It’s not critical to figure this out when you’re just starting out and focusing on product, but it’s crucial as you become a manager.

Communicating: After a certain point you can’t have one-on-one conversations with everyone. To handle this, learn to communicate in clear, succinct writing, and share it with everyone. It’s one of the highest leverage things you can do, and it scales to thousands of people. ‘All hands’ meetings with all employees at least once a month can be a really effective way to communicate too, and it’s still a really good idea to have one-on-ones with your direct reports.

HR
Most founders ignore HR in the first phase of a startup, but it’s a huge mistake to continue ignoring it as you transition to a later stage. Good HR will help you scale much faster.

Good HR means three things: a clear management structure, a way for people to talk about workplace issues and concerns, and pathways for people to evolve in their careers.

An important component of creating pathways is performance feedback. It can be light, but it should happen frequently. It helps people a lot when people can regularly hear how they are doing–good or bad.

It should also be clear how performance ties to compensation. People talk, and they will eventually find out co-workers’ compensation levels. If it’s all over the place, it can be a complete disaster. Compensation bands let people know how much they should fairly be making–for example, a mid-level engineer will know she falls in a certain range, and a senior engineer in another. They keep things fair and help avoid a lot of crazy negotiation.

Equity is also a very important component of compensation. YC company data suggests that most successful companies give out a lot of equity.

I typically tell founders that they should plan to give away 3-5% of their company each year for the ten years from founding. It’s a lot of stock but you should be doing this to keep your people motivated and aligned.

It’s also a really good idea to do this with refresher grants for existing employees approaching their vesting cliffs, and you should get a plan in place for this early. You never want an employee in a place where they start thinking about leaving because they’ve vested three out of their four years.Always stay in front of people’s’ vesting schedules.

In preparation for the longer term, make sure to monitor your team for burnout. Building a company really is a marathon and you cannot sustain people working 100 hour weeks in perpetuity. You want them to go on vacation, have new challenges, and do new things.

If things are going well, the 12-24 month mark is also a good time to put in place a hiring process. And once you have product/market fit (but not sooner), you should hire a full-time recruiter–getting the best people is arguably the most important thing to do, and you want to be as effective at this as possible.

A couple other HR tips:

Build a Diverse Team: Even before the 12-24 month mark, it’s worth thinking about how to build a team of diverse perspectives. You want unity of vision, but diversity of backgrounds is good. Myopic culture is typically less effective.

Announce Offers: Up to a few hundred employees, try announcing every potential job offer on an internal mailing list. If you do it, very often someone in the company will know something good or bad about the prospective employee.

Structure Onboarding: Have a program in place to ramp up new employees. That way when someone starts, you know what their first week looks like and how they’ll be trained.

Build Paths for Early Employees: As a company grows, you want to be very proactive in thinking what the path may be for the original 10 to 15 employees. They may not be appropriate for newly needed executive roles, but you want them to be happy–they’re probably loved by their peers, and very productive. So be proactive and talk to them about their path very directly. Sit down with them and ask how they want their careers inside the company to progress.

Company Productivity
Building a company that is able to innovate repeatedly is the hardest thing in business. Most companies do one great thing then stop innovating. Great founders work very hard to overcome this.

Alignment is key–companies become unproductive because people are either not on the same page, or they don’t understand the priorities. If you can keep the entire team aligned in the same direction, you have won over half the battle.

Start getting there with a very clear mission, roadmap, and goals. Everyone in the company should know what the roadmap is for the next 3-6 months or even a year.

There’s a classic test I love to give companies struggling with scaling– I’ll ask the founders a simple question: “If I asked 10 employees what the top three goals are for the company, would they say the same thing?” 100 percent of the time the founders say yes. I’ll then go and do it, and 100 percent of the time no two employees say the same thing.

Founders are always surprised by this because they think they communicate their ideas effectively. In reality, they’re not communicating their ideas as clearly or as frequently as they should. It’s critical to make a habit of reiterating your roadmap and goals so people can understand and internalize them.

Similarly, transparent communication is really important. It’s critical for founders to have a management meeting with direct reports every week. it’s a good idea to have all hands meetings with the entire company at least once a month. Use these to go through the roadmap of the entire company, the immediate three month trajectory, and how the immediate trajectory plays into the longer term goals.

Other longer term productivity tips

Do Offsites: Take your best people outside the normal workspace for a weekend where everyone has time to just talk and think through the bigger picture. People have interesting ideas when they’re out of the day-to-day.

Get Legal Docs in Order: If you assign someone to go through and collect every agreement that the company has ever signed, you will save a lot of future headaches.

Start Doing Financial Planning and Analysis (FP&A): If you have someone build a really great model of the business, you can optimize and understand how things are working at a level that most people totally miss. Most people don’t hire someone to work on this until they have a few hundred employees, but it’s worth doing sooner.

Hire a Fundraiser: A full-time fundraiser is another role I think is worth hiring much earlier than most recommend. If you hire someone really great after your B round and their full-time job is to prepare for the C round, you’ll almost certainly get better results than if you hire an investment banker later on. You’ll also end up paying way less money and take a much smaller dilution.

Pay Attention to Unit Economics: Sooner rather than later, you need to figure out how to make more money from each user than you spend. Most great companies historically have had good unit economics soon after they began monetizing, even if the company as a whole lost money for a long period of time. It can be tempting to paper over a problem with the business by spending more money instead of fixing the product or service, but this is a major trap.

Watch Your Runway: Even if unit economics look great, you’ve got to make sure there’s money in the bank. Don’t ever get down to just a couple months of cash in the bank.

Founder Psychology
As you keep working on your company, it will almost certainly get harder. The highs are higher but the lows keep getting lower.

As you become more successful, people start rooting against you. Journalists and people on the internet will find ways to pick apart what you’re doing, and it sucks to read. Early on, you’ve got to figure out how to ignore the haters.

Also early on, it’s good to start thinking about how long a journey your startup will be. Very few founders make an actual long term commitment to what they’re building, and the ones that do have a huge advantage. Have a strategy that assumes you will work on your company for the next 10 years–it can be an extreme advantage that few founders leverage.

And remember to take vacation yourself. We often see founders that go three or four years without ever taking a real vacation. That may work for a year or two, but you will burn out.

Finally, don’t lose focus. Focus is what made you successful in the first place. There are a lot of reasons people lose focus–burnout is certainly one, and talking to potential acquirers is another very dangerous one. Don’t become distracted.

Marketing & PR
We tell companies to ignore marketing and PR for a long time. Press will not make your startup.

But, as you start to be successful, it becomes something that founders need to spend time on. Once your product is working, switch from not caring about it to caring about it a little bit.

Never outsource the key messaging of the company to a PR firm or your head of marketing. You should figure out what the message of the company is going to be yourself.

I’d also recommend getting to know key journalists. No journalist wants to talk to a PR firm; they’re much happier to hear from the founder. Pick three or four journalists that you develop really close relationships with that like and understand you, then contact them yourself; they’ll actually pay attention and care about the company.

Dealmaking
12-24 months in is also when business development can start to matter. This certainly assumes though that you’ve already built a great product.

If you’re getting into business development deals, make sure to develop personal connections with whomever you’re trying to do big deals with. No one wants to feel like they’re being used transactionally, so make sure to show you actually care about the person you’re dealing with.

That said, make sure you set up competitive situations. This is a basic principle of negotiation, and most founders learn this from fundraising. You get good terms and deals done when you have a competitive situation and you stay persistent.

The final point I’ll make is that you have to ask for what you want. If you want something in a deal, don’t be afraid to say so. Most of the time you won’t get laughed out of the room, and you might actually get it.

It’s worth saying again–the later-stage is a different beast than when you first start your company, and you need to be aware of that. Pay close attention to when you cross that point, and put things in place accordingly.

In a nutshell, have clear, simply-structured management that people understand. Set up ways for people to advance their careers and be rewarded. Make sure to focus on what most needs your attention, and get good at delegating what doesn’t. Communicate clearly within the company, and set a roadmap so people know where to point their efforts.

There’s obviously a lot to it, but keeping these in-mind can help a lot. And again, don’t worry about these things when you’re starting out–stay focused on making a great product.

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Below I’ll outline what I see as the pros/cons and useful strategies for each role.

I wrote this post though because when I talk to people about their careers I’m surprised at how often they focus on only one of these paths without taking the time to consider other options. Often when they get advice, people tell them to follow the path that they followed (as a YC partner and former founder, I’m very guilty of this).

I don’t attach value judgements to these three paths. In my ten years in The Bay Area I’ve seen friends lead successful and fulfilled lives following all three.

Founder

Pro
• Work on something you’re passionate about
• Bring something new into the world
• High level of responsibility often inspires extreme productivity
• Choose the people you work with
• Learn new skills at an extremely fast pace

Con
• Incredibly stressful. Even success hurts
• Probably won’t maximize your personal earnings
• significant financial/skillset/location hurdles to get started
• Large scale success often requires decade plus commitment
• Commitment level can significantly hurt personal relationships

Strategy for People Who Want to be Founders
Your initial goal is to accumulate the prerequisites to being a founder.

1. Identify potential teammates you can work with who have the required technical skills to help you build your MVP.
2. Figure out the financial plan. I.e. Do you have enough money in savings, do you have friends/family who can provide seed investment, can you bootstrap, can you reduce your spending and save enough give yourself 6-12 months to work on your idea?
3. Identify a problem that you and your potential teammates are passionate about solving.
4. The least important (but still required) is having an idea on how of how to solve the problem.

Many people who want to be founders have one or more of these prerequisites missing. A popular mistake is trying to hustle around a missing prerequisite instead of solving the underlying issue. If your team doesn’t have the technical skills to build your MVP, don’t work with a dev shop. Make friends with people who do have these skills. Convince them to join you.

Often times there are hard barriers preventing people from starting a company. In these cases my best advice is to move to a tech hub (preferably the Bay Area) and work for a tech company until you can save the money, make friends with the right potential teammates, or discover the problem that you are passionate about. It usually takes at least 10 years to build a large and impactful company. It’s fine to delay your start date in order to give yourself the best chance of success.

Notice that one of the prerequisites isn’t experience. Experience is over-valued (not completely unimportant – but massively over-valued) by people who are thinking about starting a company. In almost all cases, no matter what knowledge you bring to the table, you will learn most of what you need to know about your problem, your customer, and the best solution after you start your company.

Executive (Senior Manager at a Large Company)

Pro
• Stable income/benefits/etc.
• High level of prestige (only very successful founders have more prestige)
• A higher likelihood of having a huge impact (given that most startups fail).
• Doesn’t require building a team and acquiring money to get started

Con
• Producing results isn’t necessarily how you move up the corporate ladder. Internal politics are usually as important, if not more so.
• Success can be hampered or even prevented by others inside of your organization
• Requires the ability to pick companies that will be growing and successful for a long time
• Takes a long time to get a significant amount of responsibility

Strategies for People Who Want to be Executives
I actually see two strategies within this path.

The first strategy is to pick a company that is growing quickly. If you do manage to pick a company like this early, then you’ll get more responsibility as the company grows – I also assume you are a friendly and productive team player. For example, if you were one of the first 100 people at Facebook and you stayed there for ten years, you would have many opportunities to become an executive. The hard part here is that picking a company that will grow rapidly for many years is extremely difficult (in many ways your task is similar to a VC).

The other path is to go to work for a more established company. The people I’ve seen do this effectively don’t think about working their way up within one company alone. They often think about moving diagonally up between a set of established name brand companies until they eventually land in an executive role. For example, you start out of college at Google, get hired at Dropbox as a team lead, move to Yahoo to become a director, move back to Google – so on and so forth.

People on the executive path either have to think like VCs and pick a company that is going to be one of the winners over the next 10 years, or have their head on a swivel to constantly look for better and better opportunities both inside and outside of their current company.

Employee (individual contributor / middle manager)

Pro
• Stable income/benefits/etc.
• More work and fewer meetings
• More often directly affecting the customer through your work
• With a high demand skill-set you have flexibility in where/how much you work
• Often have more time to spend with friends and family

Con
• Productivity can be blocked by bad management
• You often don’t have control what you work on
• Often don’t get a voice in major decisions – even when you “know the right answer”
• It’s harder to become very wealthy
• It can be boring
• If you don’t maintain a high demand skillset or your productivity drops it’s easier to be fired

Strategies for People Who Want to be Employees
Your strategy for picking a place to work is similar to an exec’s. You either need to spot and join a quickly growing company or find a way into a well known successful company. It’s much easier to go between brand name companies when you start with a brand name company. Also, in my experience, it’s much easier to optimize this path as a software developer.

The last thing I’ll say is it takes time to be good at each role. When you’re in college there is this idea that you should take your 20s to discover yourself and the find the work that is most enjoyable to you. The problem is that if it takes 5-10 years to truly get good at something and you spend 10 years discovering what you want to get good at…it’s going to take a long time for you to feel like a highly skilled productive person (and to recieve the rewards that come with this). It’s not that you shouldn’t explore, it’s that you need to understand the costs of that exploration and plan accordingly.

The post Sales Advice for Technical Founders appeared first on Iftach group.

In this post, I’ve condensed the pitch creation process to answering seven questions. If you can answer all seven questions succinctly you’ll be well ahead of the curve.

The Seven Questions

1. What do you do?
Start with the name of your company and what it does. For example “Socialcam is a mobile app that makes it easy to take videos and share them with friends and family.” There’s no need to set up the problem, you can just get to the point.

Too many people spend too much energy trying to make their idea sound impressive. It’s ok to keep it simple. Actually, it’s preferable. You want to explain what you do in the simplest language possible. This needs to be predigested. Your elevator pitch should be like baby food.

If you’re having trouble communicating your product simply, walking me through the user path can be an effective tactic. For example, “We’re Google. We build a website with a box in it. You can type any question into that box and we’ll show you websites that answer that question.”

Walking me through the user path helps avoid explanations like, “We’re Google. We organize the world’s information by indexing the web.” With that description, I’m lost.

Your goal when answering this question should not be to have me understand your whole business but rather make me interested enough to ask follow-up questions.

2. How big is the market?
There are two ways to get market size. If you’re entering a pre-existing space (like small business banking) you can research it. If you’re creating a new product or space (like Slack), you can estimate the number of customers that would want your product and approximate how much you could charge them.

For example Bellabeat makes an activity tracker for women. There are X women between 14 and 45 in the US. The lifecycle of our activity tracker is two years. Our market opportunity in the US is Y.

When you’re estimating the market size and what % you could own, there are two methods: top-down and bottom-up. With the top-down approach, you determine the total market and estimate your potential share of it. With bottom-up, you figure out where comparable products are sold, how many of them are sold, and what % of those sales you could take. I prefer the bottom-up method because it helps you avoid a common top-down pitfall, which is not narrowing down the customer enough. In the example above that could mean assuming all women are in your market – no matter their age or nationality.

3. What’s your progress?
What I’m trying to understand here is how fast you produce work. What is the ratio between what you’ve done and how long you’ve been working on it?

I want to feel impressed with how much you’ve done in the period of time you’ve had to do it. This can apply to a company that’s one week old or ten years old.

I also tend to value product development and customers first and other things such as fundraising or biz dev deals a distant second.

4. What’s your unique insight?
This is similar to “What problem are you solving?” but the bar is higher. What I really want to understand is what you know about the problem that everyone else doesn’t. This is usually derived from multiple conversations with customers, deep analysis of current products in the space, and often personal experience.

For example Gmail. A unique insight was that the email inbox is a personal database of communication and documents. Why would a user ever want to delete anything in their personal database? Gmail gave people enough storage so they would never have to delete a conversation. It’s not that people needed email. It already existed. And it’s not that people needed better email. That’s too vague. A unique insight is specific and doesn’t contain complicated language.

Between your market and your unique insight, you have two opportunities to teach me something. A startup’s unique insight often gives me more of an aha moment than the explanation of what the company does.

It’s worth noting that passion doesn’t help here. Saying a bad unique insight forcefully makes you look worse, not better. For example, “Dude, email today is fucking broken.”

5. What’s your business model?
There are two types of startups, those that know how they’ll make money and those that haven’t figured it out yet. By and large, if you’re in the second category you’re going to either make money by growing big and turning on advertising or you’re going to copy the predominant business model in your space. A small subset of companies in the second category will propose a new business model that makes sense given how you product changes the market–freemium is a good example of this.

One mistake I often used to make at Justin.tv was offering a potpourri of business models (virtual goods, product placement, chat ads, contests, etc..). I was embarrassed to say Justin.tv would monetize with advertising when clearly that was the only answer. Own the simple business model.

6. Who’s on your team?
I’m only interested in a few things: How many founders? Is there a technical co-founder? How long have they known each other? Is everyone working full time? What is the equity split among the founders (hopefully equal or close to equal)?

If there’s an extremely relevant credential I also want to hear that. For example: You’re building a rocket company and you used to be the rocket scientist for SpaceX. Basically, if you’re focusing on a deeply complex or regulated space, having the expertise in house to plausibly tackle those problems is important.

You don’t need to mention your GPA or that you once worked at Google.

7. What do you want?
There’s no need to dance around the ask. If you want me to invest, ask. If you have a question, ask. Though to be clear, “What do you think?” is a bad question. “Do I have a good idea?” is another bad question.

Make it easy for me to help you. I want to help you.

Improving Your Answers
Once you have answers to each of the seven questions your challenge is to make the answers as clear as possible. To do that you need to eliminate jargon, acronyms, marketing speak, and any ambiguous terms such as “platform”. Basically, make it sound dumber than you think it should.

One tactic you can try is what I call “The Email Test”. Write up a two sentence explanation of what your startup does then email it to a smart friend. Ask them to explain it back to you in different words. If they ask any clarifying questions, you need to revise your pitch. It’s important to do this over email because you can’t add explanations as you would in conversation.

One thing we do during the YC batch that most people don’t realize is we help companies with their two sentence pitch. The answer to the question “what do you do”? We work on it every group office hours for the entire batch. It’s the linchpin of a good demo day presentation. If that’s locked, writing a good demo day presentation is easy.

The real thing to remember when editing your answers is that you don’t need to sound cool. You need to be clear. Don’t try to have pizzazz. You don’t want pizzazz.

Conclusion
I’m much more interested in progress than genius ideas. Most good ideas don’t look like good ideas the first time you see them so your ability to show progress in your work and intellect in how you answer these questions are two very positive signals. Once I understand what you’re working on it’s all about making me believe that it’s plausible that you can succeed.

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