16 September 2010
The Graduate Entrepreneur Association just hosted the first speaker event of the year focused on young technology entrepreneurs. We were lucky enough to have three founders and a recent MBA grad all working Boulder’s tech scene come speak with us. Everlater- an online travel journal, Next Big Sound– music industry analytics, and Sendgrid– prioritizing automated emails, all came to speak. This is especially cool because this space is getting pretty great notoriety lately.
Software tech startups are very strong in Boulder. Boulder has a vibrant creative class as well as one of the highest engineer/capita ratios in the US. Combined with access to capital, an open community for networking and mentorship, public acceptance of failure, and numerous startup-assistance programs, Boulder provided a solid platform that is creating a hotbed of online innovation.
There was a recent article in the New York Times that highlighted the community. Brad Feld is also the keynote speaker for the GEA retreat, so check out.
The panel conversation encouraged people to take the first step, because that one is the hardest. From there you will be able to figure it out as you go. They did not see age as an issue; results and performance are the only things that matter. Finding the right partner is difficult and it’s almost like a marriage because you will be spending so much time together and separations are difficult. To maintain balance and perspective, it’s important to have several outside mentors. Mentors help solve problems and strong relationships are cultivated over time.
For the detailed play-by-play, check out the outline below. These are shorthand quotes of the conversation. It was a great discussion full of golden insights.
Toughest part of entrepreneurship and starting up
- Fear of the unknown
- The emotions, it can be a solitary and lonely experience
- Maintaining structure, focus, and drive
- Mentors help with this
- The first step is the hardest. Just getting going
- All the other parts will fall into place. You will figure it out
- For Tim, our recent MBA Grad.- overcoming the stigma of being an MBA
- Had to overcome belief that MBA is only for corporate grooming
- Mentors are “hugely important.” Boulder has a large, yet tight knit group
- Mentors help provide reality check and advice. In a sense, mentors replace your boss. If you get stuck, talk to your mentors.
- Peers also become a ring of powerful mentors
- Mentorships are relationships. They take time to cultivate, so start now
- Use the “student” card to meet people in your industry
- To get the meeting, a little flattery goes a long way
- Do some research and see what kind of successes they have had and ask them about it
- Don’t waste their time. Come prepared with a set of questions and have a clear objective
- Follow up with them afterwards with what you learned and how you applied it
Age is a non-factor in the software startup scene
- Age doesn’t really matter much toward success, many revolutionary web companies founded by young entrepreneurs. The work effort and idea are more important
- There is not a clearly defined skill set that is required for being successful
- It’s the practical application that matters, and that’s self taught
- For funding, more prep work is required by young entrepreneurs, but venture capital firms will listen to their pitch
How ideas change
- Next Big Sound entered TechStars and changed their idea almost immediately
- “Pivot” is a buzz word for this; a change in direction
- There is a bit of a formula to startups
- Set your assumptions
- Build a business model
- Test assumptions
- Adjust model based on new assumptions
- Re-test, etc.
On the team
- The team is important because it’s hard to be successful doing everything yourself
- Finding good team members is hard to find. People go to the Boulder Denver Newtech Meetup and there is also a founder dating org
- Working on a startup together is like marriage
- It’s hard and expensive to get rid of a founder if it doesn’t work out
- It’s a long relationship, so test it out first
- When building a team it’s more important to focus on the relationship compatibility rather than the complimentary skill set
- You can learn the skills later as you need to
- In the mean time, you need to be able to have fun with team
On the financials and forecasts
- Pricing is one of the biggest challenges. It is a lot of trial and error
- The revenue model is tough. There is a lot of guessing – like throwing darts at the wall
- No one seems to ever miss on COST though
- Burn rate is very important. How many months left before run out of funding.
- Investors, the board, etc ask for this figure regularly
- Investors looked at the financial statements as an exercise to prove they thought about it; the emphasis for funding is on the revenue model.
- It’s always easier to introduce new products to existing markets than it is to create a new market. For example, Sendgrid helps emails get delivered.
How to get going with an idea
- Check it’s validity fast with as many people as possible with little effort.
- Ask friends or mentors right away if it’s a good idea
- Make sure the problem that you intend to solve is real
- Don’t be afraid of someone stealing your idea
- Do not bring an NDA to a meeting, no one will sign it and it is stupid
- The value is in how the idea is executed