rr entrepreneurial journey
DESCRIPTION
Roy Rodenstein CMU Boston Entrepreneurs Group 3/3/11TRANSCRIPT
An Entrepreneurial Journey:Flowers Smelled, Lessons Learned
Roy RodensteinCMU Alumni Association
3/3/2011
Companies Mentor Investor/Advisor
UX researcher
early employee
acquired by
co-founder
acquired by
About Me@royrod how2startup.com
• Stomach of steel– quitting job, no pay, uncertainty/risk– massive ups and downs
• Self-starter• Bounce back from rejection• Driven to realize a vision• Skills, ability & willingness to learn• No ego
– menial, dirty work– Zen view on all feedback
Go for it!
What’s An Entrepreneur?
Going.com & BootstrappedLocal Marketing
2005 2006 2007 2008 2009
Going History in a Nutshell
Co-found Going.com
Rejected by YC
Quit Day Job
$500k Seed
$3M Series A
Additional Funding Acquired
What’s So Hard About Local?
• Product– “Cold start” problem, per geo– Need local relevance, e.g. content– Geo Branding
• VillageVoice, SF Weekly• Good luck getting Voice.com
What’s So Hard About Local?
• Marketing– WoM is limited
• “Is Going available in other cities?”• “Should I tell my friends in Chicago?”
– Traditional methods• Can’t use cheap national/non-geotargeted!• Impacts SEM, banners, affiliate, PR, etc.
– SEO• Geo subdomains etc., duplicate content
1. Prove It In 1 Geo, Then Scale
• Started in Boston, Spring ‘05• Prototyping, customer development etc.• Added NY and SF after BOS reached 10k• Started with stringers/part-timers
2. Bootstrap Local Marketing
• Grew marketing in concentric layers…• 1st: 100 close friends + family• 2nd: attended 4 house parties/night with
my cofounder for 3 months• 3rd: created our own events, traditions• 4rd: cross-marketing w/local orgs
– Young alumni club, salsa fans group, etc.• 5th: hire local stringers for 5 hrs/wk
3. Scale Marketing w/Funding
• 6th: Launch event in Boston– Fenway Fest: TV, subway, partner promos– Red Sox said no-go afternoon before. Ouch.
• 7th: National launch at Demo ‘06• 8th: Hired local full-/part-time staff• 9th: SEM (geo-targeted)• 10th: Launch events in NY, SF, Chicago• 11th: Local PR
Fenway Fest Subway Ad (Boston, Sept. 06)
Early Stage Team-Building
How I think about early stage teams
• What are my strengths & weaknesses?– Skills: Hacking, Product, Marketing, Sales, Finance, Management– Qualities: detail oriented vs. macro view, people person, communication– Be brutally honest with yourself
• What strengths does the company need– Now?– In 6 months?– In 2 years?
• What are sporadic vs. sustainable roles?
Sporadic needs
“We need a new logo, so I need to hire a full-time designer ASAP!!!”
• Full-time hires are hard– 1-3 calendar months, days of real effort on spec, interviews, negotiation
• Firing is really hard– Hiring wrong person full-time is very costly– Layoffs take toll on the team and your credibility
• When in doubt, start with low commitment• Temp-to-hire is very common
Common staffing approaches
Area Example need Common best practices
Design Logo, page template 99designs
Design UI, UX, IA,Usability Freelance designer or firm
Editorial Writing web content, blog posts Craigslist, Twitter
Social Media Marketing
Manage Twitter et al, community management, blogger outreach
Craigslist, Twitter
Prototype Hacking
Version 0.1 of site to gather user feedback
oDesk, RentACoder, eLanceLocal: Globant, Janeiro Digital etc.
Sustainable needs
“This area needs help now, and it still will in a year”
• Someone will need to lead Hacking, Product, Marketing• These problems don’t “go away”
• Could be a founder, a sr. hire, or a jr. hire that ‘scales’• Wearing multiple hats for a while is fine• Plan out hires at least 6-12 months in advance (e.g. Excel gantt)
What makes a founder?
Believes in the vision
Committed to the company
Sustained fit and value
“My cofounder will help a bit with emailing bloggers and users,
taking a shot at drumming up some potential clients,
and later we’ll figure out what else they do”
What a co-founder blowup looks like
Spooks your investors, your team, and your cap table
Where to find full-time Hires
Monster Careerbuilder Crunchboard
Your friends Your network Craigslist Joel on Software Dice College career fairs
Your friends’ networks Twitter Quora LinkedIn Facebook Blog comments Your user community Meetup groups Industry events
Everywhere…
Fundraising Debugged
Source Bootstrapaka yourself /co-founders
Friends & Family Incubators / Seed Funds
Angels
Individuals, Groups
VC
Stage Idea Idea / PrototypeIdea /
PrototypeIdea / Prototype “Traction”
Amount $5k - 200k+ $5k - $20k+ $50k - $1M+ $500k - $10M+
Form Debt,
Convertible DebtConvertible Debt,
EquityEquity
Convertible Debt,Equity
Equity
Dilution 0% 5-10% 5-10% 5-20% 20-70%
Time Days Weeks Weeks Weeks - Months Months
Cost $0 - $1k $500 - $5k $500 - $5k $2k - $10k $10k - $50k+
Exit Any Any $5M+ $5M+ $20M+
Fundraising Decoder Ring
Boston, SF, NYC: How They Stack Up
• Boston– Great for Mobile, B2B/SaaS, E-Commerce etc.– Pro: If you recruit a star, better chance to hold onto them– Con: Few superangels/MicroVCs, so seed round valuations lower
• SF– #1 by far for Consumer, Web, Gaming, etc.– Pro: Can swing a dead cat and hit an angel investor; bubbl-y $$– Con: FB, Google steal all great hackers and drive prices up; no loyalty
• NYC– Great for Ad Networks, Fashion, Cloud, ‘Hip’ Services– Pro: Growing angel and VC scene, though still smaller than Boston– Con: Expensive to operate other than deep Brooklyn or NJ
Further Resources
Angel, Incubator, VC Lists• Xconomy: http://www.xconomy.com/boston/resources/ • Jon Pierce Boston Angels List: http://twitter.com/jonpierce/boston-angels
Relevant Blogs• VentureHacks: http://www.venturehacks.com • Mark Suster: http://www.bothsidesofthetable.com • Brad Feld: http://www.feld.com • Chris Dixon: http://cdixon.org • Fred Wilson: http://www.avc.com • Paul Graham: http://www.paulgraham.com/articles.html • (me): http://how2startup.com
Documents• YC Series AA Funding Docs: http://ycombinator.com/seriesaa.html • AVC Seed Docs: http://avc.com/a_vc/2010/03/standardized-venture-funding-docs.html • Wilson Sonsini Term Sheet Generator: https://dealbuilder.wsgr.com
Boston• Dart Boston: http://dartboston.com• Greenhorn Connect: http://www.greenhornconnect.com • Web Innovators Group: http://www.webinnovatorsgroup.com • Techstars: http://techstars.org/boston • MassChallenge: http://www.masschallenge.org/