StartupMuse http://startupmuse.com Startup Stories Tue, 30 Aug 2016 23:29:27 +0000 en-US hourly 1 State of the Startup http://startupmuse.com/state-of-the-startup/ http://startupmuse.com/state-of-the-startup/#respond Thu, 21 Jan 2016 00:32:36 +0000 http://startupmuse.com/?p=23988 We’re officially twenty days in to 2016. The startup industry is booming with bright young creatives, forging their own entrepreneurial paths in to the future. It’s easy to get caught up in the concept of chasing the next unicorn, but let’s pause for a minute to examine the past and present first. Our friends at […]

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We’re officially twenty days in to 2016. The startup industry is booming with bright young creatives, forging their own entrepreneurial paths in to the future. It’s easy to get caught up in the concept of chasing the next unicorn, but let’s pause for a minute to examine the past and present first.

Our friends at the Startup Genome Project have put together the below infographic highlighting as they state, “some of the most compelling facts about startups today.” Well, we’ll let you be the judge.

Starup-Genome

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Founder Profile: Josh Carter, Brightwork http://startupmuse.com/founder-profile-josh-carter-brightwork/ http://startupmuse.com/founder-profile-josh-carter-brightwork/#respond Thu, 14 Jan 2016 18:45:03 +0000 http://startupmuse.com/?p=23827 Brightwork makes it easier for Developers to see information about the APIs they use as well as allow them to switch APIs on the fly with no code. What’s the story behind Brightwork? All of us at Brightwork come from a very technical background and have worked for various startups and companies. We all agreed […]

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Brightwork makes it easier for Developers to see information about the APIs they use as well as allow them to switch APIs on the fly with no code.

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What’s the story behind Brightwork?

All of us at Brightwork come from a very technical background and have worked for various startups and companies. We all agreed that APIs (application program interfaces) should be more flexible and that it shouldn’t take such an effort to switch APIs if companies wanted to pick a different service. The other issue we wanted to solve, was that we didn’t really have a good idea about how our APIs were performing or the cost projections.

When we started to talk to other Developers, we found they were often looking for solutions like Brightwork, but had to end up building these solutions themselves. We saw an opportunity to build a platform that would make it easier to see usage and performance information about APIs (even private ones), see cost projections as well as side by side cost analysis, and to switch APIs on the fly with no code needed.

What were you doing before you started this company?

That is a loaded question, since I’ve always had various projects or jobs (often having many jobs at once). It could be my Navy background or just growing up seeing my Mom work more than one job to keep my Brother and I fed and clothed. I’ve always had the mindset to be overly busy and don’t know any other speed than fast paced.

For a while I was doing internet radio, and have been in the telecom industry for over 14 years. I also helped launch a digital marketing company prior to starting Brightwork.

How do you stay organized?

It’s tough for me because I’m not typically an organized person. I utilize Evernote a lot. If it weren’t for that tool, I would lose my mind. I keep a lot of notes there to help me keep track of project deadlines and stay on top of follow up, but you can use it to track individual things as well.

For the business stuff we use Hubspot for our CRM, Trello for project management, and Slack for team communication.

What were some of the challenges you faced when launching your business and how did you handle them?

I think the biggest challenge for us early on was finding the biggest pain point and putting together a plan to solve that problem. We initially thought data was a big enough issue to try to solve, but came to the realization that Developers really didn’t see this as a big enough pain. After speaking to a bunch of people, we found that APIs were the biggest frustration of all.

There are over 10,000 APIs in the market today, but if you want to see usage, cost projections, or even switch APIs it’s a very cumbersome process in which you have to build and piece together various solutions. And even if you do all of that, it’s likely not going to be in one place nor will it be easy to digest. Brightwork is putting all of this information in one easy-to-use dashboard.

How do you stay motivated?

It can be tough sometimes. It’s easy to just sit back and just let things happen. I stay motivated by surrounding myself with people that share the same passion I have for solving big problems. We have an incredible team with some of the most brilliant people I have ever known. It’s such an incredible honor to be able to sit at the head of the table and know that this team is dedicated to putting a product out to our customers that will solve big problems, save them money, and save time. I am so excited to see where this goes because the opportunities are endless.

We really see Brightwork as becoming the Wix of Mobile Development in the long run. 10 years ago you needed a Web Developer to build a website. Today you can just use tools such as Wix to build a site in minutes. Mobile Development is going to eventually be just as accessible. Brightwork is putting the pieces in place today, to make mobile development more accessible to a broader audience. It all starts with the tools inside the apps. We have to make them easier to use if we hope to get more people developing applications.

How did you delegate and build your team?

Building the right team is hard. You always second guess yourself about the decisions you make as a Founder. However, once everyone is running on all cylinders that doubt is all erased and you realize this is what you were meant to do.

We work so well together. Since we are a small team we’re able to keep constant communication and ensure that we help each other when things are in danger of falling through the cracks. It helps that we’re all a little insane. I mean, who would drop everything they’re doing and change their life path to build a dream? You have to be a little insane to create a startup these days. It’s definitely not for the faint of heart.

There’s a lot of interesting insights and science behind the habits of entrepreneurs. How do you start your day?

I really don’t have a morning ritual. I’m a Dad so my day starts at 6:30 in the morning with getting my kids up and ready for the day. While they’re getting ready I’ll typically watch a little news until it makes me sad enough to turn it off. Then I do something that makes me smile, so I don’t start off on a bad note (despite watching the news). This helps put me in the mindset that I can get through the day and be positive.

For the most part, I try to laugh as much as I can all day. I am such a smart ass and love to joke with people. Thankfully I’ve surrounded myself with people that are fun and energetic. It helps get me through the tough times.

How do you unplug, disconnect, and recharge?

I spend time with my kids on the weekends. Sunday is family day. I make it a point not to work on Sundays and spend the entire day with my family. We try to get out and explore as much as possible. I love getting outside and just spending some time away from the city. It’s a great way to get outside of my little bubble and remind myself how small I am in this world.

How do you celebrate successes?

I usually don’t. I have learned to temper my excitement about things because I know it can be short lived. It doesn’t mean I do not appreciate the successes when they happen, I just try to temper that with a reality check. There is always more to do.

Brightwork and Plunk (my other venture) have taught me a lot about this. There is nothing more defeating than to have a good month only to have your worst month following. So I’ve learned to be patient and continue to look at the big picture. While it’s great to have solid wins, it’s just a milestone to the next goal.

If you had one piece of advice to give fellow entrepreneurs, what would it be?

Have patience. Building something takes time. Anything worth fighting for does. It is going to take much longer than you think to accomplish what you want to do. If you think it’s going to take a year to do something, triple it. You will be disappointed, but know that you will win if you keep your head up and know how to get past the low points. You’ll be beaten down until you can’t take it anymore. There was a great quote I read today. “To make it in this business, you’ve got to go through hell.”-  Joe Bastianich

Success is the goal but failure teaches us a lot. What are some of the biggest lessons you’ve learned as an entrepreneur?

The biggest lesson I’ve learned is that you need to find people that not only share your vision, but have the same drive and understanding. The challenge for me has been that I hold myself to such a high standard. It’s tough for me ask people to hold themselves to the same standard. I often find that I take on more because I don’t want to disappoint people including those that work around me. It’s hard to get out of that mindset to do everything because I do not scale as an individual. So finding people that can keep up is tough.

 

For more about Brightwork, follow them on Twitter & “like” them on Facebook.

 

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Founders, your startup lawyer doesn’t represent you. http://startupmuse.com/23617-2/ http://startupmuse.com/23617-2/#respond Sat, 09 Jan 2016 21:19:08 +0000 http://startupmuse.com/?p=23617 There is a vague popular belief that lawyers are necessarily dishonest. I say vague, because when we consider to what extent confidence and honors are reposed in and conferred upon lawyers by the people, it appears improbable that their impression of dishonesty is very distinct and vivid. Yet the impression is common, almost universal. Let […]

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There is a vague popular belief that lawyers are necessarily dishonest. I say vague, because when we consider to what extent confidence and honors are reposed in and conferred upon lawyers by the people, it appears improbable that their impression of dishonesty is very distinct and vivid. Yet the impression is common, almost universal. Let no young man choosing the law for a calling for a moment yield to the popular belief. Resolve to be honest at all events; and if in your own judgment you cannot be an honest lawyer, resolve to be honest without being a lawyer. Choose some other occupation, rather than one in the choosing of which you do, in advance, consent to be a knave. ~ ABRAHAM LINCOLN

Eventually, every entrepreneur will be introduced to what we refer to as a ‘startup lawyer’. They are excited to find a kindred spirit who can help them navigate incorporation, convertible notes, and eventually preferred stock offerings. Over time it is normal to become friends with your startup lawyer. I have multiple times. The entrepreneur’s biggest misconception is that their startup lawyer represents them. In reality, your startup lawyer represents the interests of the company and its shareholders in aggregate. After your first outside financing, your personal interests are likely diverging from the interests of the whole.

This is the current reality, don’t be frustrated. You need to realize this so you can engage your own lawyer. Someone to represent your interests as founders. You need someone to draft your employment agreement other than your company’s lawyer. You need someone to review investment documents other than your company’s lawyer. You need help. Your investors will have their own lawyers (your investment documents will likely spell out the fact that the company must pay their bills) and it makes perfect sense for you to have your own lawyers (i.e. as the founders). You should have the company pay for your lawyers as well (what is good for the goose and all). But ensure YOU have engaged your lawyers and simply have the company reimburse your expenses just as your investors have done.

If you’re located in Dallas I recommend hiring Kevin Vela as your company’s lawyer (my company, CultureMap uses him) and Ray Balestri (I’ve personally used him) or Bill Garrison as founder’s counsel (he has represented my interests).

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Are you working on the wrong startup? http://startupmuse.com/what-should-you-be-working-on/ http://startupmuse.com/what-should-you-be-working-on/#respond Fri, 08 Jan 2016 23:48:58 +0000 http://startupmuse.com/?p=23603 Each week I regularly meet with various entrepreneurs working on all sorts of startup ideas. All of them are seeking additional capital, but most of them are also looking for validation, recommendations and referrals. Sometimes I’m so impressed by a particular entrepreneur I wonder if he’s spending his time wisely. Is his particular startup idea big […]

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Each week I regularly meet with various entrepreneurs working on all sorts of startup ideas. All of them are seeking additional capital, but most of them are also looking for validation, recommendations and referrals. Sometimes I’m so impressed by a particular entrepreneur I wonder if he’s spending his time wisely. Is his particular startup idea big enough for him to commit the next three to five years of his entrepreneurial time on? Entrepreneurs need to be very careful (far more careful than investors need to be, I’ll get to that in a second) choosing the right projects to pursue.

Think about it. The average startup is taking longer and longer to build. In the 00’s most people assumed it would take you three to five years to get your startup to failure, a single, a double or a homerun. ShopSavvy, my most recent startup, took seven years from start to exit. Let’s assume you’re going to spend 5 years per startup. If you believe the stats that more than 90% of funded startups fail (and even fewer provide ‘fuck-you’ returns to the founders) this means that you’re going to need to start more than one company in your career. Let me put this in perspective:

  • Startup Number One: Ages 30-35 (chance of success 10%)
  • Post Startup Downtime: 2 years
  • Startup Number Two: Ages 38-43 (chance of success 20%)
  • Post Startup Downtime: 1 year
  • Divorce: 1 year (entrepreneurs usually make lousy spouses)
  • Startup Number Three: Ages 45-50 (chance of success 40%)
  • Post Startup Downtime: 1 year
  • Startup Number Four: 51-56 (chance of success 50%)

Of course, this schedule assumes two VERY unlikely things; first that you’re going to have four fundable ideas and second that you’re going to be able to raise venture capital four times. Fewer than 2% of startups seeking capital actually raise venture capital in any given year. If you’re able to attract outside capital for your startup you’ll be in the 98% percentile of entrepreneurs four times in a row. For context, I’ve only been able to raise venture capital three times – once in my twenties, once in my thirties and once in my forties. I’m 44 today (don’t tell anyone, but Facebook thinks I’m 43) and I’ve got time for one more startup before my 50s. It is crazy how time flies. Just yesterday I was worried that investors thought I was too young and now I’m worried they’ll think I’m too old.

You might be wondering why the chances of ‘success’ increase as you get older (more experienced). The reason is actually pretty simple. After your first or second startup (failure or moderate success) you’ll suddenly realize that your interests and the interests of your investors are not aligned. Early stage investors expect (almost require) that 90% of their investments fail. This means that almost all of their returns come from just a few startups. For example, I’m an investor in one fund that made almost 100 investments – 90% of the fund’s return is coming from just two of the companies. A single or a double isn’t helpful for a venture capital firm’s return – they want you to keep swinging for the fences until you strike out. Why? In this case (i.e. the fund in question), the investors spent just seven years making 100 investments. They got 100 times at bat. How many times did each entrepreneur get at bat during the same time? Once. Get it? As an entrepreneur you’ve got three or four times at bat your entire career – at least one of them needs to be a single or double to make the math work. Sadly, most of us will never hit the home-run.

All of this being said, given the fact that you’ve only got three or four times at bat it is VERY important to be certain that your company is addressing a large enough market to create a large enough business to attract the right outside capital and to give yourself a chance at success (single, double or home-run). Listen to your advisors. Look at your market. If it isn’t obvious how you can get to several million dollars in sales within 24-36 months you really need to take a good hard look at your business. If you can’t be on track to generate one hundred million dollars in sales within five years you might seriously consider NOT raising venture capital. I’ll tell you a secret. It is MUCH easier to build a lifestyle business. Scott and I started Architel back in 2001 with less than $5,000 each. By 2003, we worked there full-time without pay for the first year. Since then we’ve paid ourselves generously and built a business worth millions of dollars. No venture capital firm (or other, outside investor) would have invested in the company – it was never going to be Google or Facebook. It was always going to be a profitable little company that would allow us to live comfortable lives and invest in cool ideas (like ShopSavvy and Uber). If you’re playing the startup game with venture capital investors you need to bring your A game. Good luck.

 

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Get Motivated! Expert Tips for 2016. http://startupmuse.com/23599-2/ http://startupmuse.com/23599-2/#respond Fri, 08 Jan 2016 22:36:11 +0000 http://startupmuse.com/?p=23599 If you’ve been following Startup Muse at all in the past few months, you now that profiling founders and other executives is a significant part of our programming. As we launch full speed ahead (or crawl begrudgingly) in to 2016, let’s take a look back at the pearls of wisdom imparted to us from successful startup […]

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If you’ve been following Startup Muse at all in the past few months, you now that profiling founders and other executives is a significant part of our programming. As we launch full speed ahead (or crawl begrudgingly) in to 2016, let’s take a look back at the pearls of wisdom imparted to us from successful startup entrepreneurs in 2015.

We asked countless entrepreneurs, “If you had one piece of advice to give fellow entrepreneurs, what would it be?” — and these are some of the top answers from 2015.

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“Help other startups. Get involved and learn. Find mentors. Don’t be scared of being broke because of your startup. Being broke means you are doing, not just dreaming..” – Anabella Watson, RentBillow, LLC

“Surround yourself with sharp people that you can learn from and be a constant sponge for information when you are around them. You should often feel like an idiot when they talk, but when you do, write down whatever made you feel like an idiot so you can go read about it and ask questions later.” – Michael Walsh, CariLoop

“To not feel guilty if you take a break once in a while. It can be hard to switch off from the business but I know that sometimes unplugging can be really important to reset for the next big push.” – James Bohan-Pitt, HipPocket

“Your work is never done and you’re going to be thinking about work even when you’re not there. It’s important to set boundaries so that you don’t burn out. Make sure you’re taking time to step back and gain perspective. If you love what you do, and are passionate about your mission, work is not work.” – Andra Newman, QuadJobs

“Surround yourself with the best people possible. We don’t always have the right answer at Trunk Club and often fail forward to success, but by having a strong and supportive team in place we have weathered the storms together and come out on top. Culture is not something you can simply define in a mission statement, it is created and sustained by the leaders and teammates you surround yourself with daily.” – Lindsey Kilbride, Trunk Club

“I think so many would-be entrepreneurs are simply afraid of failure and would rather stick to what’s comfortable and known. They’ve got passion, drive and some great ideas, but are paralyzed by the unknown. Well, I believe our world is made by ordinary people just like you and me… so I’d say “JUMP!” Find something you’re passionate about and which solves a problem and get to the serious work of changing our world for the better!” – Jonathan Clark, Mend

“This is going to be a long and wild ride – get your team in place. Your team will make or break your growth!” – Kevin Lavelle, Mizzen+Main

 

 

 

 

 

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Giving advice and referrals http://startupmuse.com/giving-advice-and-referrals/ http://startupmuse.com/giving-advice-and-referrals/#respond Thu, 07 Jan 2016 20:26:56 +0000 http://startupmuse.com/?p=23580 Scores of entrepreneurs both locally and nationally regularly ask me for startup advice and referrals to potential investors, lawyers, accountants and other vendors. Just take a look at my profile on Quora. I am not shy about telling the truth. I never sugarcoat my opinion, but I am quick to say I might be wrong […]

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Scores of entrepreneurs both locally and nationally regularly ask me for startup advice and referrals to potential investors, lawyers, accountants and other vendors. Just take a look at my profile on Quora. I am not shy about telling the truth. I never sugarcoat my opinion, but I am quick to say I might be wrong or might change my mind in the future. Last year I was asked for a referral to a startup lawyer and while I almost never make negative referrals (i.e. don’t use that guy), I did explain that I was frustrated with a particular startup lawyer here in Dallas.

Beginning in the mid-2000s, I met a young startup lawyer, Ryan Roberts, who was relatively new to Dallas. I was so impressed I used him for at least six of my companies and recommended him to LOTS of entrepreneurs over the years. In return, he used me as a reference for LOTS of startups and I recall taking a lot of calls from entrepreneurs wanting a reference for him. He always did great work for me and my companies (I presume he did great work for the companies I referred as they never complained). My opinion of Ryan changed in 2012.

At one point I became adverse to one of the companies I had hired him to represent. I sued the company and while he wasn’t handling the litigation he continued to represent the company as their corporate counsel. At that time, he also represented a few of my companies including Architel Holdings LLC, Architel LP and Architel GP LLC (among others). One of my limited partnerships, a partnership he represented, was the largest investor in the company I was suing. When the litigation began Ryan was instructed by the board of the company I sued to cease all contact despite the fact that he ALSO represented my other businesses. Since Ryan wouldn’t return my calls I wrote him an email asking him to resign as the corporate lawyer of the company I sued so he could continue to work with my companies. He responded indicating he could no longer represent my businesses due to the conflict. Changing lawyers is a huge pain in the ass and is an expensive proposition, but without another option, we moved everything over to Bill Garrison.

I always resented Ryan’s decision to fire me as a client. I was a very loyal, using him for all of my companies and recommending him to anyone and everyone who needed a startup lawyer. I never asked for anything in return. He made a purely financial decision to fire me. Who would you have picked: a small-time entrepreneur in Dallas or the billionaire co-founder of Facebook? In his estimation he made the right decision from a business perspective I suppose, but he shouldn’t be surprised that if someone asks me what I think about him as a startup lawyer that I would say I wasn’t a fan. I’m not.

At the end of the day, I am not saying he’s not a good lawyer. He is. I am saying I’d never work with him based purely on his behavior. It sucked. You might ask why I am writing this. Simple, someone forwarded the following opinion I wrote about him to him and he PUBLICLY called me a liar (he should have called me to talk it out):

RyanRobertsDallas

Given how annoyed I was with Ryan and his decision to fire me as a client I thought my opinion was reserved. I’m really pissed that he had the balls to suggest the statement was a lie. It was not. Calling your former client a liar is stupid and just another example of how shortsighted he can be. I doubt he’ll ever represent that billionaire again and he’ll never represent me or any company I am slightly involved with (i.e. I’ll never invest in a company represented by Ryan Roberts) and not because he’s not a good lawyer, but because he’s not loyal… Period. I would have never written this post if he hadn’t called me a liar – I am telling the truth.

Here is the email proving he fired me as a client:

Fired

Here’s the email I sent him asking him to stay on as our lawyer:

RyanRoberts

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Startup Profile: Brad Bush, Dialexa http://startupmuse.com/founder-profile-brad-bush-dialexa/ http://startupmuse.com/founder-profile-brad-bush-dialexa/#respond Mon, 04 Jan 2016 19:55:27 +0000 http://startupmuse.com/?p=23524 *Although not a founder of Dialexa, Brad Bush joined the company in 2015 to help grow and scale the business. From idea to execution, Dialexa helps you launch technology products. They design and develop both hardware and software for a variety of platforms and technologies such as Internet of Things, wearables, mobile applications and web applications. […]

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*Although not a founder of Dialexa, Brad Bush joined the company in 2015 to help grow and scale the business.

From idea to execution, Dialexa helps you launch technology products. They design and develop both hardware and software for a variety of platforms and technologies such as Internet of Things, wearables, mobile applications and web applications. (Customers include venture-backed startups and Fortune 2000 companies, such as JLL and Amazon.)

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What’s the story behind your company?

We wanted to solve the hardest technical problems and create new business models – we are not in the business of normal. We see a better world through technology innovation.

Brad Bush, Founder

Brad Bush, Founder

What were you doing before you started this company?

I was an entrepreneur in the 90’s doing the same type of thing (building solutions for businesses) and sold that business. I went to work for Nortel and ended up in big businesses. After a stint of CIO and CMO at GENBAND, I was ready to return to the world of creating new businesses.

How do you stay organized?

I use Todoist for To-Do’s and Sunrise to manage my calendar.

What were some challenges you faced when launching your business and how did you handle them?

The main challenge is always sales. It takes a lot of relationship building and hard work to make sure you continue to do the little things, like sending e-mails and making phone calls.

How do you stay motivated?

I like to meditate to get settled each morning. I keep a list of everything I want to accomplish each day and try to complete at least the top 3 each day.

How do you delegate and build your team?

I try to give general direction without telling them exactly how to to it, and then  I make a point to trust and validate.

There’s a lot of interesting insights and science behind the habits of entrepreneurs. How do you start your day?

I get up very early, try to meditate, then go through my email and do some reading.

How do you unplug, disconnect, and recharge?

I enjoy listening to audio-books in my car while I drive.

How do you celebrate successes?

By saying thank you — Even for little things. It’s important to tell people they are doing a good job.

If you had one piece of advice to give fellow entrepreneurs, what would it be?

Never give up.

Success is the goal but failure teaches us a lot. What are some of the biggest lessons you’ve learned as an entrepreneur?

Always ask why. Try to ask that one last question.

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Startups should NEVER issue press releases! http://startupmuse.com/how-to-get-pr-for-your-startup/ http://startupmuse.com/how-to-get-pr-for-your-startup/#comments Mon, 04 Jan 2016 17:16:10 +0000 http://startupmuse.com/?p=23421 Seriously, startups, especially early stage startups, should NEVER issue press releases. You’re not a Fortune 500 company who has to deal with: a) SEC regulations, b) beat reporters who actively follow the company, and c) scores of employees, customers, and vendors who need a unified message from the company. Early stage startups don’t have the […]

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Seriously, startups, especially early stage startups, should NEVER issue press releases. You’re not a Fortune 500 company who has to deal with: a) SEC regulations, b) beat reporters who actively follow the company, and c) scores of employees, customers, and vendors who need a unified message from the company. Early stage startups don’t have the sort of reporting and disclosure problems that public companies have, they aren’t usually closely followed by specific reporters and they don’t usually have terribly complex internal and external messaging requirements.

The reality for startups is that reporters simply don’t pay attention to the hundreds of press releases that show up in their inboxes each day. You don’t have to take my word for it; Dan Lyons, a tech journalist covering everything from supercomputing to smartphones and has appeared as a guest on CNBC, MSNBC, CNN, BBC, Bloomberg, Fox Business and NPR, and has written for the New York Times, GQ, Vanity Fair, Wired and the New Yorker, explains,

I have a confession to make. When I was a reporter at Newsweek, I received literally thousands of press releases via email — and I deleted almost every single one of them without even opening them. […] Every morning, I’d find 50 or so messages in that Newsweek account, almost all of them press releases, virtually all of them things I did not care about. I’d glance through the subject lines and then zap them all (I’m pretty sure every other reporter does essentially the same thing).

Ever hear of Twitter? As a startup, they never issued a single press release. Not a single one. Despite this, the company never suffered from a lack of press. Most startups spend a lot of time thinking about their PR needs and not the needs of the reporters they hope to get coverage from. Put yourself in the reporter’s shoes. His job is to find ‘exclusives’. He’s constantly following leads, cultivating sources and generally looking for news no one else has ever covered. The fact that you drafted a carefully worded press release and emailed it to hundreds of reporters is PROOF that your ‘news’ is NOT a scoop. Getting press is actually really easy but requires a little planning and legwork.

The first step is to determine what you are hoping to accomplish by generating press for your startup. There are scores of reasons you might want coverage including the recruitment of potential employees or team members, downloads of your hot new mobile application, attracting new customers, attracting new investors, or merely to improve your own personal image. Whatever your reason it is important to realize what you’re trying to accomplish before talking to a reporter about your startup. Rationalize everything against this goal. If a particular interview doesn’t meet this goal – DON’T DO IT.

Once you’ve figured out the why the who will be pretty easy. If you’re trying to attract new investors it might make sense to focus your efforts on targeted trade publications while it might make more sense to focus on consumer-focused publications if you were trying to attract new customers. For example, most venture capital professionals involved with early stage tech investing tend to read TechCrunch, VentureBeat, The Deal, The Dealbook, VentureWire, PEHub and Term Sheet. Your first job is to start reading each of them and pick a favorite writer. This reporter will be your ‘contact’.

Now that you’ve determined the why and who it is time to talk about the ‘how’. This is the hard part – it should take you months to execute on the how. First, I’d attempt to connect with each of the reporters you’ve identified. Start by following them on Twitter. I’d recommend using Twitter’s list feature to create either a public or private list of the reporters you’re going to start working. For example, Robert Scoble of RackSpace made his list public here as did the Huffington Post. Like the reporter’s tweets. Retweet the ones you really like. Comment on their stories occasionally when it makes sense. Mention them in your tweets when it makes sense. Then over time, you can start connecting with them on LinkedIn, Facebook, Google+, Pinterest and so on. Eventually, you should be able to get their email and/or cell phone number.

Once you’ve built a certain rapport with a reporter start thinking about how you can help them. This is key. You’re in the startup world. Your friends work for other startups. You know a lot more than you think. Ask your friends if they have any news they’d like covered in the press. Most have something going on that is newsworthy. Pass along these scoops and story ideas to the reporter (hint this is a good way to get them to give you their real email address or cell phone number). The ratio of scoops/ideas to coverage requests should be four to one – offer four scoops/ideas for each story about your startup you’d like them to cover. Once you proven yourself as a reliable and fruitful source of information for a reporter you’ll be surprised how quickly they get back to you. Ironically, your connection to the reporter will actually make you more popular with your startup friends as you’ll be able to help them secure the sort of coverage they want for their companies.

Ideally, you’re cultivating several of these relationships at the same time. The hard part will come when you want coverage for your startup. Giving an exclusive or a scoop to one reporter when it is someone else’s news is easy, but how do you secure the broadest coverage for your news item without harming your newly cultivated relationship? In my experience, I’ve found it helpful to ‘bank’ a few smaller stories to include with my major stories. This way I’m able to offer ‘exclusives’ to multiple reporters at the same time. Each can have a unique piece of information a reader won’t be able to find in a different publication while allowing me to get my bigger story out to the largest possible audience. I use a whiteboard and list all of the possible story ideas and determine which ideas best fit each particular reporter – this becomes their ‘exclusive’. I then usually draft a simple outline or list of the important facts that I’m hoping they’ll cover.

One week before I hope to pitch each reporter I send out a quick teaser. Perhaps a text or an email suggesting I might have a story for them. Once I get a response I suggest that we talk the following week and set up a time to chat. During the call I give the basic pitch, offer them the exclusive ‘item’ if they agree to write the story and ask them to hold it until a certain date. Offering them the exclusive is absolutely the best way to ensure they actually write the story – without the exclusive they’ll get busy on other stories and push yours to the next week. They’ll want to publish their story as soon as humanly possible as to not lose the scoop to someone else. Then I follow up with an email that includes the outline/list that reflects what we talked about. Good reporters take copious notes, but verifying them by looking at your outline will give them more confidence in their story.

Make it is as easy as possible for the reporter. Think about how your news fits into a larger story or trend in the industry. Come up with a few headlines and perhaps a three or four sentence blurb that puts your news into this larger context or trend. Include the title and blurb at the top of your outline/list. Have several professional photos taken of yourself, your team, and your product. Make sure you have the license to the photos (you can share them with the reporter if they don’t have time to send out a photographer). Finally, if you’re pitching television reporters you might seriously consider spending a little money and have a video crew come out and video interviews from yourself, your key team members and b-roll from your product/service. It is unlikely that a television reporter would use this footage (regardless of quality), but providing the video to them will do two things including showing how well you and your team look on camera and providing them b-roll ideas (i.e. they’ll likely use your art direction as inspiration).

The biggest mistake I see startups make when it comes to PR is getting it too early. Unless you’ve got a real need for the press you’ll be smart to keep your news under your hat. For example, let’s say your company just raised a $500,000 seed round. You’re excited and know that you could get several reporters to write about your funding story. Why bother? To start it is unlikely your product is ready for primetime so attracting customers would be a mistake. Funding stories are the best way to attract new investors, but in this case, you’ve just closed your round and you need to focus on execution not funding raising. What if you sit on the story for three to six months when you’ve launched your MVP and you’re preparing for your next funding round? Wouldn’t that make more sense? You’ll likely be looking for additional team members, you’ll want to increase downloads/customers/whatever, and you’ll be looking for additional investors. The story will be just as good and you’ll be able to add the new twist that you’re raising additional capital.

One last parting thought is that you should own your story and your relationships and resist the temptation to outsource these to a PR firm. Wait at least until you’ve raised your Series B to engage an experienced firm (I like Scott Baradell at Idea Grove).

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‘Tis the Season: Three Startup Charities to Watch http://startupmuse.com/tis-the-season-three-startup-charities-to-watch/ http://startupmuse.com/tis-the-season-three-startup-charities-to-watch/#respond Wed, 23 Dec 2015 17:28:39 +0000 http://startupmuse.com/?p=23311 Well there’s no more denying it, the holiday season is firmly upon us. Hopefully you’re feeling merry and bright. Hopefully your halls are decked and your presents are wrapped neatly under the tree. Hopefully you’re not standing in line at the Apple store because you were too busy working that you forgot to order the […]

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Well there’s no more denying it, the holiday season is firmly upon us. Hopefully you’re feeling merry and bright. Hopefully your halls are decked and your presents are wrapped neatly under the tree. Hopefully you’re not standing in line at the Apple store because you were too busy working that you forgot to order the Apple Watch she asked for. Just us?

In addition to tinsel, and peppermint-flavored everything, the Christmas season also places an emphasis on giving back to those less fortunate and let’s face it, a little good karma never hurt anyone. There are a plethora of traditional options for spreading cheer (we’re looking at you bell-ringers), but in true Startup Muse fashion, we’d like to shine light on a few startups using their entrepreneurial prowess to give back to the world.

 

New Story Charity

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Mission: Co-founded by Brett Hagler, Mike Arrieta, Matthew Marshall and Alexandria Lafci, and advised by a team of executives from companies like DocuSign and HP, the 501(c)(3) non-profit boasts 100% transparency in their efforts which aim to transform tent communities across the world in to dependable, sustainable housing through crowd-funding. New Story has thus far provided 151 homes in  Leveque, Haiti  and is now setting its sights on El Salvador.

How to help: Start a holiday campaign. Invite friends and family or business associates to donate to your campaign in lieu of gifts. Get started here.

Pencils of Promise

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Mission: Pencils of Promise, PoP for short, operates on the fundamental principle that every child deserves a quality education and the venue and supplies to facilitate that. Every dollar earns directly contributes to school building, scholarships, teacher support programs and/or water, sanitation and hygiene education.

How to help: Support PoP’s “Season of Promise” by making a donation that will help the group reach the goal of building 30 schools in Ghana, Guatemala and Laos. So far, funds have been raised to build 24 of the 30 school goal. You can donate any amount you choose, but the charity estimates that $250 can educate a child, $500 supports a teacher and $25,000 builds an entire school.

Equal Heart

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Mission: Operating here in Texas and in Colorado, the organization was founded by a group of friends with strong ties to the nonprofit community. Equal Heart’s mission is to support individuals and families facing times of adversity. Currently, the group is focused on combating childhood hunger. This holiday season, the group has partnered with United Way of Metropolitan Dallas to deliver healthy foods to neighborhoods without easy access to groceries.

How to help: All of the food and produce delivered this season has been donated by local companies. Support their efforts by donating or get in touch via e-mail to provide other resources.

 

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How much is your startup worth? http://startupmuse.com/how-much-is-your-startup-worth/ http://startupmuse.com/how-much-is-your-startup-worth/#respond Tue, 22 Dec 2015 18:11:03 +0000 http://startupmuse.com/?p=23292 It seems like a simple question, but valuing a startup is actually very complicated. Most people (especially lawyers) are surprised to learn that companies can have multiple valuations at the same time. Here is an oversimplified example of what I am talking about. Let’s say your company owns some office furniture and a novel patent. If […]

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It seems like a simple question, but valuing a startup is actually very complicated. Most people (especially lawyers) are surprised to learn that companies can have multiple valuations at the same time. Here is an oversimplified example of what I am talking about.

Let’s say your company owns some office furniture and a novel patent. If you had to liquidate today you might be able to get someone to pay $1M for everything. So it would be fair to value the company at $1M. Now let’s say that you visit with a venture capital firm and convince them to invest $5M into the company. They’ll demand about 30% of the company so you’ll both agree that the company’s pre-money valuation is around $18M. Given that a professional investor is investing millions of dollars in the company at a set price it is fair to value the company at that price. Now let’s say that you want to issue stock options in the company to your employees. You’ll need to do a 409A valuation before issuing them. After paying a valuation firm about $1,500, they’ll determine the value of the stock options you’re giving to your employees. If you sold preferred shares to the VC at $1.00 each, the valuation firm will likely suggest that your common shares are only worth about .10 each (i.e. 10% of the value of the preferred shares). Suddenly the company that just raised $5M with a post-money valuation of $23M is actually worth a lot less in the eyes of the valuation firm – around $8M. Now let’s say that the company secured a government contract and that will generate $10M in EBITDA per year. An acquirer tenders an offer to buy the company for 3X cashflow – i.e. valuing the business at $30M.

So this company has been valued at $1M, $18M, $23M, $8M and $30M. So how a company is valued has more about why than what. Get it?

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