East vs West – Slides and Video from Aulery 2012
My thoughts on how entrepreneurs and their environment differ between Poland (Eastern Europe) and UK (Western Europe). Not without some language hiccups.
On all the advice you’re getting
Image by laughlin via Flickr
The Seedcamp Week took off Today. Smart entrepreneurs are getting plenty of advice - quite often from people that didn't have the balls to start their own business. Often from real experts in their respective fields - rock star VCs, deadly marketers and colleagues entrepreneurs. Fresh Founders hear that their prices should be super low, and they should market their product via word of mouth and social networks. And go for scale. Next hour they hear that the price should be super high, sales done direct and service provided with high maintenance. The following day it's about funding. So they hear they should raise a lot, as they're in a competitive space, will need the budget to develop multiple countries and have to accelerate product development. Or they should raise very little, preserve equity, prove their model and then raise a big round with much better valuation. Not to mention all the advice on the product. That it should be changed, address completely different market, stay the same, is killing it.
All of it is not confusing - it's completely contradictory.
What does it really tell a founder. Price is important. Pricing and sales model are very connected issues. It's important how much you raise, you have to strategise it. People are passionate about your product, your market, your clients. All of this advice is just pointing your attention to areas of business you perhaps haven't thought about yet. It's asking: Did you really think about X, Y and Z? The more forcefully the advice is given - the more passion for your product and company the mentor shows - not necessarily that she is right.
So listen between the lines of all the advice you're getting. It's not what they hit that's important - it's the direction they're shooting in.
Related articles
- What one startup learned from Seedcamp: Location, lean ideas and listening to good advice (thenextweb.com)
- Seedcamp's Saul Klein on four years of tapping startup trends (guardian.co.uk)
- Seedcamp Week - Breaking Records yet again! (seedcamp.com)
Tips on building a (sales) team from Matt Blumberg
Today I had the luck to attend one of the unique meetings Seedcamp organizes for it's winning teams, and (in my case) alumni. Over breakfast Matt Blumberg, the CEO of ReturnPath shared his tips on successful team-building in a startup environment. My takeout was obviously how to build a successful sales/bizdev team. Here are some points I caught from Matt's brilliant talk:
- Hire the best people (for the job) - in the early days of the startup business development is more about evangelising and closing rather than a classic/numbers sales game. You need people that go out in the field and are ready to spend a lot of time and energy with few results to keep the spirit up.
- Hire in advance - by the time you decide that you need to hire help you probably needed it for a couple months already. Avoid that by setting up end executing a hiring strategy/plan.
- Don't convince people to a startup career, find those that are looking for it. Otherwise you risk getting people that are not ready to 'get their hands dirty' and will expect an organisation that will support them (PAs anyone?)
- Hire in pairs - this was very new to me, but so obvious when you think about it - sales people working in a pair get to learn from each other, compare notes and share motivation. Programmers knew it for quite some time.
- Create transparent and fun environment. Think about yourself as a head of a family or a host of a great party - treating your employees as your best guests.
- Be an enabler - share responsibility and decision power; remove roadblocks; beware of becoming a bottle neck
- Bring tech people to the sales cycle to avoid team separation and communication issues - this is probably one of the most important, and still seriously overlooked points in most startups I know.
Big thanks to Matt for his time and knowledge and Seedcamp's Philipp Moehring for organising this.
ReturnPath is the market leader in email deliverability currently employing 200 people and profitable. Investors include Union Square Ventures, Mobius Venture Capital, Sutter Hill Ventures and Western Technology Investment.
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The length of the bizdev cycle
Doing business development and early stage sales in a startup is often frustrating. Many of your actions like reaching out to potential customers and establishing a constant communication take week. That's why until you find the product/market fit it is wise to stay lean and watch your burn rate very carefully. But it's also very important not to let the slow progress discourage you. Many of the actions you undertake will bring results long after you wrote them off as losses.
- Image via Wikipedia
It is very important to schedule your energy, and most of all financing accordingly. The rough rule for a full bizdev cycle (from early customer contact to first closed sales) is 6 months. However, you often will hear about contracts signed after showing a powerpoint presentation. In other stories it takes 1 or 2 years and several pivots before first revenue hits the door. In B2B products, I'm pretty much sure the length of the cycle is strictly correlated with the weight and urgency of the problem you're solving for the client. Sometimes you can have a brilliant product that will save the user millions of dollars annually, but unless someone there really cares about these savings (for instance it's all in a budget of a single department) the progress may be slow, if at all.
Call corporate people
- Image via Wikipedia
I don't know how many emails corporate people receive, but judging by their response time and frequency they're probably getting more regular mail then I'm receiving spam. Most of it is of course irrelevant CC and FYI information, but unfortunately my message get's lot in the noise. The other part of day that takes most of those peoples time are meetings - I would say for some of them it must be over 50% of daily activities. That leaves them very little time to do actual work. Answering my email, which usually requires additional action or communicating with a colleague is just not going to fit into it. That's why I call them. They usually can give me a straight answer in five minutes and we can push things forward for instance because I'll do the job their colleague was supposed to deliver. More then that, since they're so rarely at their desk, I'm also probably the only person they managed to talk to that day, which makes me stand out of the crowd of people that try to maintain communication with them.
The hard part is knowing when to call them - the general rule is early mornings and late afternoons, but individual schedules vary. Whenever possible, ask this question when you're exchanging contact details with a person. Make sure to also establish a good relationship with their PAs, as often those angels will get you calls normally impossible to accomplish.
Tips for attending trade shows (as a startup)
- Image via Wikipedia
- Don't pay for it. These events usually have two parts - the free trade show, and paid conference. Unless you see that the lineup of speakers can add some invaluable information to your stack (which I doubt it will) it's just not worth shelling out few hundred Euros, Dollars or Pounds just for 'mingling'
- Go there. You can see your competition, meet potential partners and see where the market is going. Most of all, you get the feeling of the climate in the industry. Listen to what people are saying in their conversations, which topics are discussed the most, what buzzwords are most commonly used. This is your best occasion to get industry wide spectrum of points of view - no time reading blogs, publications and reports will make up for listening to your peers and potential clients.
- Setup a base. You don't want to, or can't afford to rent a booth, but you can get yourself into nearest restaurant or bar to around the venue. Arrange with the manager a table that is privately located and reserved for you all day long. Then set up meetings with clients that will be visiting the show anyway. At the fraction of the cost you'll be able to capture their attention for your product demo in a way that no booth will allow.
- Keep your tools handy. I don't mean the business cards or collateral. Get an iPad or other way of demoing your product live. You have to be able to naturally flip any conversation into a product demo. Use a laptop if you have to, but always hold it in your hands and never switch it off.
- Be organized. It's easy to go to a show and return one day later saying that 'there was nothing interesting' or 'it wasn't your target after all'. Have a look at the list of the exhibitors, pick the ones you have to talk to. Set up meeting with other visitors. Figure out which free-seminar speakers you have to listen to and establish a conversation with (that's the only reason why I sit on those things). And summarise the event afterwords - try to capture the trends, the potential leads and lessons learned.
These things usually happen once or twice per year per industry per country. Make sure you squeeze all the value out of time you spend there.
Meetup.com – an interesting freemium model
CC: kalandrakas
Meetup.com over the years became THE place for people to organise all sorts of group activities around a particular topic. Starting from programming language groups through stay-at-home-mums to nudist men - everyone now wants to connect with likeminded individuals and they use Meetup.com for this. It serves a very simple purpose of creating an event calendar, managing the member list and RSVPs and notifying members about new meetings or changes in the current ones. We now have more features like picture galleries or voting for meetup ideas as well as message boards and advanced user profiles. But the basic purpose is: get people organised for a particular date.
Now, the business model. Every meetup organiser pays a monthly subscription, starting at 12USD. There is no free plan, but you get your first 30days free, so you can check how it works for you before being charged. Where is the 'free'mium then? Well, group members don't pay anything. A whole 4 mln of them. Now, as you notice, it's not a typical freemium model. Normally you'd provide the basic service for free and charge for advanced features. Well, meetup works just the same, it's just harder to notice. When you're attending meetups - it's free. If you want to go into 'advanced mode' - which here is organising meetups - you start paying.
There are a lot of businesses that have two groups of 'customers' - like for AdTaily, we have publishers and advertisers - both of which are important for us. Sometimes we manage to convert a publisher into an advertiser, but this is not our focus. For Meetup.com, I guess that's their primary 'lead generation' system for getting new organisers - getting more group members. And this is why I think Meetup.com has an interesting freemium model.
Who is in your network of contacts?
CC Marco Bellucci
Individual relationships are an incredibly valuable asset in all stages of business development. Having said that, I also have to state that quantity doesn't equal value in that case. But I want to make a different point now - did you check how is your network distributed, regardless of it's size and 'objective' quality? Who do you actually know?
You may know influential people in the finance/banking industry, because of your job history or education. But right now you're trying to grow a business that has products for corporate IT departments. And all of your contacts are sitting in the trading rooms or marketing divisions. Passing a message through several 'ears' in an organisation is usually good enough to seriously distort it, or completely loose it - before it reaches someone you should really talk to. Quite often it's better to find another 'lead' into the organisation rather then try to push the message internally.
So I encourage you to do a quick check, and really evaluate your network in terms of your current goals. Be honest with yourself, don't rate someone high just because you had (more than) a few drinks back in the days. And if you find that some important parts are missing, you can always ask your current contacts for direct introductions to highly relevant people. If not, you can go and read my post on growing your network here 
One thing at a time
CC: drcorneilus
People don't listen. In general. But you might get them to remember one thing. That's why it's always important to have a clear message about your product. Where it really comes into play though is in your direct communication. When you meet someone in person, you can see or confirm that they understood you correctly. When you talk to them on the phone - you can ask. With e-mail, twitter and other forms of written communication - it's harder. I noticed that people seldom read e-mails from start to end, so this is what you can do:
- always put important stuff in bullet points
- if it's more than three - you missed the point
- ask for one thing - and only one - at the end of the message
This will give you two important results:
- People will actually start doing what you ask them to do
- You will build continuous relationship with them
Getting an email from someone with a bunch of requests quite often ends up in a 'to-do-later' bin. However, if you give people small actionable tasks - you will make them more eager to work with you, but also it will create an impression of your relationship moving forward and being fruitful.
So remember - one thing at a time
Breaking the conversation
Photo credit: soylentgreen23
This came to me last night, at one of the events I attended in London. Quite often on a business related event you end up in a situation when you've spent some time talking to a person, and you know that the conversation is heading nowhere. Sometimes you know that even thought the relationship you just created is valuable, you have to catch someone else at the venue, before they leave (or you forget about them), or just meet more people, because that's what you should do. Anyway - you want to smoothly end the conversation, without offending the other side, and jump into a new one. Here are a couple tips on how to do it:
- Physiological breakers: I need to get a drink (would you want one?). I need to go out for a cigarette (works great, because out there you can meet more people, and then break the conversation again because you're heading back). I need to go to the loo (only if you're running out of options). - downside - you have to be genuine (really get a drink, go to the loo etc. - otherwise they're too obvious).
- 'Help me' breakers. You simply ask the person, who else should you talk to at the party/venue, and even ask them for the introduction afterwards. Works best in an environment you're new to, but the other side is familiar with.
- Bridging. Now, this is my favourite one - taken straight from the PickUp Artist guides. Instead of breaking the conversation, you take it with you, asking the person - I need to talk to 'X' as well, will you join me? Sometimes that's the point when they'll break the conversation, by backing out, but in other cases, you get an instant opener to the next person. You simply say, hello I'd like to introduce Y to you. Oh, you don't know me probably, I'm Z, and I'd like to talk to you because...
Well, I hope this helps. If you have other smooth ways of managing conversations, drop me a note or post a comment below.
