Knowing your audience

Yesterday I went, as usual, to the monthly local entrepreneur meeting in Madrid called Iniciador. Rodolfo Carpintier, Spanish business angel and CEO of the only Spanish tech incubator named Digital Asset Deployment (DAD). His keynote was brilliant, some old school tips and some real pearls of wisdom.

First tip: Are you sure you need the money? I’ve personally heard this advice many times during my latest trip to Silicon Valley and I have to say I share it 100%. Sometime entrepreneurs think that it’s all about rising VC, but not all ideas need VC. Most of them don’t. Mine neither, or so I think (yet).

Second tip: Know who your audience is. This is an old one, but still worth remembering. Don’t go and pitch a VC when what you really need is seed capital. Vice versa, don’t go to ask for seed capital if what you need is $5M to start running. This is also true for entrepreneurs looking for developers, directors, etc. I had one guy come to me yesterday asking me if I wanted to be his marketing director. I respectfully decline and the incident got me thinking. Don’t go to an entrepreneur meeting looking for that profile, it’s a waste of time. Most of the people going to those meetings are looking for the same and already have their own ideas, startups, etc.

Third tip: Have a risk plan in place before going shopping. For me this was one of the best tips. It’s most often forgotten in most business plans. You need to show that even if you fail, if all hell breaks loose, you’ll still be able to return some money to investors.

There are many more tips, but I just wanted to highlight some. And excellent book for these type of tips is The Art of Start from Guy Kawasaki (still haven’t finished it yet, but I’m enjoying it very much).

Care to share some more tips?

Completeness, a path to creativity

Here I am again, writing this post in the plane on my way back home. Many things have happen during my visit to San Francisco that have profoundly affected me in ways I can’t yet understand. Hippies, Entrepreneurs, Tech guys, PhDs, Postdocs, MBAs, Bohemians, Students… that’s what I’ve found in the Bay Area and not many people understand me when I say that I really feel at home with them.

Most of the times I talk with someone about the Bay Area and/or Silicon Valley, I get to hear the same ol’ song: “But you have Silicon Valleys elsewhere; You can go to London, there are many tech guys there; …” and they are right. Different parts of America are starting to boil with hungry entrepreneurs, from Seattle to Boston, passing through Austin. In Toronto, London, Dublin or even in Madrid, my home town, you can find people eager to start their own company.

Problem is, that it’s just that. Just people interested on technology, programming, business administration, etc. Same people with the same mono thematic interests. Rare is the case where a developer is into writing, composing or teaching (Not saying that there aren’t though, I have the great luck to know people like that, but it’s rare to find them, at least for me. Maybe I don’t look where I should, maybe it’s that).

It’s got to a point where finding “Interesting” people is rare. As more and more people just care about money. True interesting people get diluted in a sea of “normal” people, lost, sometimes forever, out of reach for those who care to listen.

I don’t consider myself above the average. I’m an average person, not special at all, but I’m cursed with a double edge gift, and that is, curiosity. Why do I say that? Well, because curiosity can be something amazing, but at the same time is source of many frustrations. My curiosity needs to be continually fed with different things. New experiences, new fields of study, new people, new cultures, new languages, … The problem is that, feeding such a voracious gift, is very difficult and it even has it’s disadvantages. For example, such a curiosity renders any attempt to became a specialist, something pretty difficult.

Anyway, finding food for my curiosity is hard. Interesting people with interesting stories are scattered, so reaching them requires great effort and time. A time that is most precious for many of us. The Bay Area, nevertheless, works as a huge talent magnet for many persons of diverse conditions, educations, cultures and backgrounds. There isn’t, as far as I know, a place like it, in terms of interesting people. And when I speak about Interesting, I mean talented persons with a story (sometimes multiple stories) to tell. This doesn’t necessarily means that they need to have a PhD or be a graduate. Sometimes the most interesting experiences you find them in the streets from people with little or no education whatsoever. The point is that, I haven’t seen such an intellectually fertile place like the Bay Area in my whole life (Again, there are, for sure, places like this that I haven’t heard of, so please, if you know them, tell me about them!). What I discovered time ago, and well, I rediscovered during this trip, is that inspiration arises, most of the time, when interacting with these type of Interesting persons, and as like in a domino game, inspiration brings creativity.

The big problem I find with many people is that they are incomplete. Incomplete is a strong word to use, and I know that many people might disagree with me because as always, personal opinions are, well, personal and strongly subjective, so please keep that in mind. Most people are only interested on one or two things in life, being money and wealth one of the most common of them. They don’t care about their jobs, they don’t care about music, they don’t care about books, they don’t care about nature, and after all, why should they, no? What I’ve found is that, creative people that care about many things, are much more able to see the “big picture” everywhere. They are capable of building bridges in places where everyone else just sees dust. This is specially important for entrepreneurs if you ask me. Curiosity isn’t only something that allows people to see “further”, I truly think it enriches our soul and that at the end, when money and wealth don’t matter anymore, you are left alone with your experiences, your ideas and your ghosts.

Being curious about what surrounds us might be something you born with, although I sometimes think you can learn it with time, either way, just think, stop and think about what we tend to disregard on a daily basis. Meet new people, travel, experiment new things, hopefully you’ll get infected with the curiosity virus which will eventually enrich you as a person and as a professional, enabling you to foresee and envision what other can barely grasp.

Sorry for this extremely long diatribe full of my philosophic thoughts. Having recently experienced this enrichment at multiple levels, I thought it was worth trying to describe what I felt and specially WHY I feel the way I do about the Bay Area and its people. After all, there is much more than our jobs out there and it’s just ready for us to get it.

Images credits: Villa Sams

Why forcing an entrepreneur into a big company is a mistake

Lately I’ve been hearing many negative comments about creating startups and being an entrepreneur. Most of them can be reduced to: “You should work for a big, well know company and after several years you can go and start you own“. In my experience this idea is pretty widespread. I’ve heard it from my father, from my friends, from friends of friends, etc. The problem with it is that, ALL the persons that express this idea have a common characteristic: they are conservative.

The idea that working in a big company you have better odds of creating a successful startup is bullshit. There are no statistics for that. Even more, people like Paul Graham from Y Combinator recently wrote an essay precisely about this same issue:

We’ve now funded so many different types of founders that we have enough data to see patterns, and there seems to be no benefit from working for a big company. The people who’ve worked for a few years do seem better than the ones straight out of college, but only because they’re that much older.

The three most common benefits I keep hearing about working in a big company are the following:

• At a big company you’ll have the chance to get high profile contacts that might aid you when you go and create your own startup.

Contacts are of great help, everyone knows that by now, nevertheless, the idea that you’ll have better and more contacts working in a big company has no ground. First of all, to contact truly influential persons is, in general, way beyond a normal worker. You’ll need several years to reach a status within a company to get access to the management team or high profile executives. I’m pretty sure Apple employees can’t phone Steve Jobs or mail him at any time with total freedom. Even if this isn’t true (there are always exceptions), the psychological perception for many top executives is that they are better and you are worse, that they belong to the executive class and you don’t. This means that even if you can reach them, you won’t be seen as an equal and the true advantage of recommendations et al. will be diminished. Of course, there are always special cases, but we probably wouldn’t be talking about a BIG company then.

Secondly, contacts within a same company are pretty much endogamic. This means that, if you work as a beta tester, most of your friends and coworkers will be related to the beta testing environment. Reaching interesting and influential persons in other fields is much more difficult.

Finally, the rate at which you contact new people is determined by external factors like the number of people in your department or how frequently you engage with other departments or clients. If we throw some numbers we get a glimpse of the big difference. I usually go to a couple of entrepreneur meetings per month. In average I meet 2 persons of interest for my startup at each meeting. That makes 4 good contacts each month. In the software industry (my field), projects usually take between 2 to 6 months on average (even more if it’s a huge project in a big company). During that period and if you are lucky you’ll meet an average of 3 persons (which might not even be good contacts) at the client. That means that for a 6 month project you’ll only meet 3 new persons and probably only 1 or even none will be of interest to you. Check that against 15-20 interesting persons in a 6 month period by yourself (and no, you can’t go to many entrepreneur meetings if you work at a big company). Although this estimates will also go down if you keep meeting with the same persons, it’s clear which rate is better. Please, as usual, takes these numbers with caution, they are very gross estimates and there are always exceptions.

• Working in a big company you’ll get the change to work or see really big projects that employ huge resources. This vision will help you when working on your startup.

Nobody disagrees that you acquire very interesting experiences while working for a big company. Specially if you work with large teams. The problem is that when building a startup you won’t be managing huge teams or resources, you won’t (normally) need real-time critical systems either. You won’t even deal with a lot of clients at first. So, even though it’s a plus if you have the experience, it’s not critical, as a startup is NOT a big company.

• Working in a big company will give you a good resume and it will be easier for you to find investors.

Good resumes are always good things. Specially if you approach investors, your team’s resumes must be great. The problem is that many persons don’t differentiate between the team and the founders. An investor isn’t looking for a top notch programmer founder, they are looking for people with experience setting up companies, growing companies, selling companies. They are looking for people with a track record of not wasting money in useless things. They are looking for a true leader that is able to get the best out of his team. If you are also a top notch programmer then be it so. Working at a big company won’t get you more money from investors. VCs that invest on people only because they are ex-googlers or ex-yahoos are wrong and they’ll pay for it. That it’s harder to find investment if it’s your first time and you haven’t been working at a known company, true. Impossible to do it, false. Actually, most of the investments I see are to founders with not experience in big companies, just take a look at Apple, Microsoft, Google, etc.

So, in conclusion, from my point of view, there isn’t any competitive advantage in working on a big company. Actually for me it’s the opposite. Two years of inferno, with a tight leash around your creativity and without the freedom you’ve got in a startup. Worst of all is that the environment affects you in a negative way and it takes a while to get used to breath again. Finally, the years after graduation are the best to play the high risk game of creating a startup as people haven’t got so many financial debts (a house, a family, etc.). Wasting those precious years in a restrictive environment instead of changing the world is wrong.

Choose what YOU want and follow your gut. If you don’t feel comfortable at a company, take the time to think about what you really want. And most of all, don’t listen to those that try to project their own insecurity on to you, as that will only block your true feelings.

As usual, everyone is invited to drop a comment. I would love to read what other entrepreneurs or big company guys think about this. It would be interesting to have a VC or an angel to comment on this issue as well.

Images: leakyfaucet.wordpress.com, legendsofhorror.org, lifedynamix.com, synergy.ralf.netmindz.net, interbgr.com

The one thing every entrepreneur needs to have: HOPE

I was listening to last night’s Sen. Obama’s speech from Virginia and I was very impressed by the defense he gave for the use of hope in his campaign. It got me thinking that the most crucial thing an entrepreneur must have is hope. It’s not the only characteristic you need, that’s obvious, hope without hard work is pretty useless. But it’s true that hope really makes the difference between two persons.

Hope is the fuel of practically all the successful startups we currently see but most of the times people just underestimate it. I remember when I told my friends I was about to quit everything and start my own company that all that I kept hearing was: “man, return to reality“, “Alex be real, it’s very tough and you won’t make it“. Obama said something tonight that really tickled inside me. It’s because people have hope that they can achieve great things. Realistic people don’t achieve anything because they are bounded to their own personal restrictions. They don’t try to break current conceptions or ideas because they feel it’s impossible. And that’s the problem, they don’t even try!

That’s why even though most entrepreneurs fail at some point, the ones that have hope on their success will eventually succeed. Take the example of Larry Page. When he was working at Stanford, his only hope was to crawl all the Internet into his computer. That seemed rather ridiculous at the time and I’m very sure that many people told him that he was an idealistic, that he was crazy and that he should be more realistic. Nevertheless that dream, that hope took him to start Google and to change the face of the Internet as we knew it.

Google is just the most notorious example, but you can find many other small scale projects that have succeeded thanks to hope. Again, hope is not magical all by it self. It usually comes hand in hand with hard work, probably because hard work is driven by it. But don’t fool yourselves, it doesn’t works the other way round, hard work by it self doesn’t gets you success. Specially because even if you work hard for many hours, days, weeks or years, it’s hope what keeps you going, it’s hope what makes you go to work every day, it’s hope what makes you stand up again when something went really wrong. What really strikes me is that many people perceive hope as the characteristic of fools, disregarding its real value and power. I truly think that fools are the ones that can’t make change happen, that are unable to pursue their dreams, that can’t wake up and say to themselves, I can make this work, I can push the limits of innovation, I have the power to change the lives of thousands of persons. Of course it’s easier to give up against reality. That’s the easy path, just blame society, the market, the global industry leaders. Thinking about doing something new is tough and requires a great deal of courage. So people, next time someone tells you that you are a fool or an idealistic, don’t be ashamed, hope is the fuel of our dreams, and dreams are the vehicle of innovation, change and success.

As Mahatma Gandhi once said:

“We must be the change we wish to see in the world“

Image credit: http://quidam.wordpress.com