rr entrepreneurial journey

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An Entrepreneurial Journey: Flowers Smelled, Lessons Learned Roy Rodenstein CMU Alumni Association 3/3/2011

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Roy Rodenstein CMU Boston Entrepreneurs Group 3/3/11

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Page 1: Rr entrepreneurial journey

An Entrepreneurial Journey:Flowers Smelled, Lessons Learned

Roy RodensteinCMU Alumni Association

3/3/2011

Page 2: Rr entrepreneurial journey

Companies Mentor Investor/Advisor

UX researcher

early employee

acquired by

co-founder

acquired by

About Me@royrod how2startup.com

Page 3: Rr entrepreneurial journey

• 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?

Page 4: Rr entrepreneurial journey

Going.com & BootstrappedLocal Marketing

Page 5: Rr entrepreneurial journey

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

Page 6: Rr entrepreneurial journey

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

Page 7: Rr entrepreneurial journey

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

Page 8: Rr entrepreneurial journey

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

Page 9: Rr entrepreneurial journey

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

Page 10: Rr entrepreneurial journey

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

Page 11: Rr entrepreneurial journey

Fenway Fest Subway Ad (Boston, Sept. 06)

Page 12: Rr entrepreneurial journey

Early Stage Team-Building

Page 13: Rr entrepreneurial journey

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?

Page 14: Rr entrepreneurial journey

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

Page 15: Rr entrepreneurial journey

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.

Page 16: Rr entrepreneurial journey

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)

Page 17: Rr entrepreneurial journey

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”

Page 18: Rr entrepreneurial journey

What a co-founder blowup looks like

Spooks your investors, your team, and your cap table

Page 19: Rr entrepreneurial journey

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…

Page 20: Rr entrepreneurial journey

Fundraising Debugged

Page 21: Rr entrepreneurial journey

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

Page 22: Rr entrepreneurial journey

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

Page 23: Rr entrepreneurial journey

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/