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BeyondVC



Ed Sim's blog on venture capital, technology, the markets, and life in a connected world...



Updated: 2014-02-12T16:06:06Z

 



boldstart ventures in 2014 – our ethos

2014-02-12T16:06:06Z

As we look into 2014, we thought it was important to reflect on our activities in 2013 and refocus and refine our thinking and messaging as a firm. We are thematic in our approach and primarily known as seed investors with a focus on enterprise and companies that can scale quickly. To date our messaging […]As we look into 2014, we thought it was important to reflect on our activities in 2013 and refocus and refine our thinking and messaging as a firm. We are thematic in our approach and primarily known as seed investors with a focus on enterprise and companies that can scale quickly. To date our messaging has been clear, but we also could not ignore the fact that companies like Plain Vanilla Games took off quickly and became known as the fastest growing mobile game in history. The challenge for us is how to explain this in a focused, simple manner. Here is our attempt and then I will break down how it all ties together: boldstart's messaging We have over 20 years of experience backing bold founders with big visions. Our founding team has led first rounds in market leading enterprises such as LivePerson (LPSN), GoToMeeting (sold to Citrix), Greenplum (sold to EMC), and 24/7 Media (TFSM). BOLDstart helps founders at the seed stage accelerate their growth from idea/ alpha phase to product market fit and successful Series A round. With a focus on seed investing in the mobile, agile, and smart enterprise and business models that harness the power of network effects, our entrepreneurs have successfully been able to raise over $200 million of financing following our initial seed investment. Founded in 2010, we have backed 27 awesome teams including Indiegogo, divide.com, goinstant (sold to salesforce), blaze.io (sold to Akamai), Plain Vanilla Games (quizup), rapportive (sold to LinkedIn), and klipfolio. ok, so let's break down the key elements of our message: "We have over 20 years of experience backing bold founders with big visions.” That is pretty self explanatory. However, to add to this, we love entrepreneurs who have big visions but of course, start with an incredibly focused product. This means we invest in product-driven engineering teams where all of the development is done in house and where rapid iteration is a key to success. "helps founders at the seed stage accelerate their growth from idea/ alpha phase to product market fit and successful Series A round” While this sounds simple, there is a ton of work that goes into helping our portfolio companies get to a successful Series A. This includes thinking through what milestones the startups will need to hit to make them attractive for an A round and ensuring there is real plan with enough cash (typically 18 mos) and runway to get there. Since most of our companies have a product that is in alpha stage (super early, buggy), we like to help our entrepreneurs get more market data and customer feedback through our relationships to help them further refine their product. We also help our teams find key engineers, and sales and marketing folks who can help build and refine the gotomarket strategy for the entrepreneur. Finally, we try to prewire the Series A investment by getting our portfolio companies to meet with the right partners at the right firms early on before they even need money. Getting feedback from smart Series A funds helps the entrepreneur further hone their message. "focus on the mobile, agile, and smart enterprise" The big trend in technology today is the growth of mobile. The other force we always hear about is the consumerization of technology meaning that much of the innovation in design, applications, and user interface is driven by consumers first (think Facebook, twitter) and then brought into the enterprise or business after the fact. Yammer would be a great example of a Facebook like feed being brought into the enterprise and then being sold to Microsoft for $1.2 billion. Here at BOLDstart, we believe we are still at the very beginnings of this consumerization trend in the enterprise and hence our focus on the “mobile and agile enterpri[...]



Branding first starts with your team

2013-05-17T14:23:33Z

External branding starts with developing a consistent, internal message first. When you think of branding and positioning, remember that your first line of offense and the most important representation of your company comes from your employees.  Make sure you have a succinct, crisp and clear 2-3 sentence pitch on what you do and that everyone […]

External branding starts with developing a consistent, internal message first. When you think of branding and positioning, remember that your first line of offense and the most important representation of your company comes from your employees.  Make sure you have a succinct, crisp and clear 2-3 sentence pitch on what you do and that everyone from the CEO down to the engineer or QA can repeat the same mantra.  Whether your employees are doing sales pitch or at a conference or cocktail party, they should all be starting with the same message.  The more it is said the easier the message spreads. We live in a sound-byte generation with information overload so if you can cut through the clutter with a powerful and succinct message, you will not be forgotten.

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It reminds me of the old kids game "telephone" where one player starts with a message and passes it down the line and in the end the last player repeats what they heard.  Many times the message is completely different from the initial version.  Obviously if you think of messaging in terms of the game "telephone" you will quickly recognize that the crisper and simpler it is, the harder it will be to get lost in translation.  You want the next degree of relationships to be able to explain just as easily as your employees - this is how great buzz builds.

At Cisco, it was "we network networks" or at Tableau Software which went public today "we help people see and understand data"  Obviously what goes into sentence 2 can provide a little more detail on how or why you are special (see my blog post from 2007 on why vision statements matter and how to craft one).  In Tableau's case, it is "we help anyone quickly analyze, visualize and share information."  And sentence 3 is the build and ah-hah moment - "More than 10,000 organizations get rapid results with Tableau in the office and on-the-go."  Yes, that is strong messaging to the outside world and in the written word but it can also be simplified for strong messaging from employees in the spoken word.

So remember when it comes to messaging and positioning, keep it simple, easily remembered and to the point.  What is your message and does everyone on your team know it? When your startup is out in the market meeting with customers and VCs, will everyone you meet be able to say the same message - "yeah, i met this cool company today and they do "x".  If so, you off to a great start!

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Camping out and closing deals

2013-01-15T14:12:48Z

I am sure you can see a common thread in many of my recent posts – Sales, Sales, Sales!  I don’t care how great your product is because without an ability to articulate the value proposition succinctly, tell the world about it in a capital efficient manner, and sell the damn thing, you are SOL […]

I am sure you can see a common thread in many of my recent posts – Sales, Sales, Sales!  I don’t care how great your product is because without an ability to articulate the value proposition succinctly, tell the world about it in a capital efficient manner, and sell the damn thing, you are SOL (yes, shit out of luck!).

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So what does camping out have to do with selling? Let me explain.  In sales I am sure you have heard about all of the various models to prospect, push leads through a funnel, and get to closing.  One underestimated method is the “camp out sale.”  What is it and how do you do it?  Well quite simply, when things begin to stall you basically pick up the phone or send an email and tell the prospect you will be in town the next day or week and would love to come by.  You then “camp out” and don’t leave until you get an answer, presumably yes.  I have to warn you that you need to employ this method selectively and have the right criteria (relationship with sales prospect, size of deal, timing, etc) in place because if done the wrong way you can waste a ton of money and time trying to close deals.  Email, phone calls, and video chats are great, but sometimes you just need to be there to move a process forward.  I have seen this done right many a time and can’t tell you how effective just showing up can be. 

To that end, I was on the phone with an entrepreneur yesterday who was trying to get their round closed.  The investor wanted to set up a call to meet the other co-founder before making a decision.  Like any great entrepreneur would do, he simply said I will be there tomorrow and proceeded to book a flight for first thing the next morning.  I will let you know how this story ends but I can assume that an entrepreneur who shows that kind of hustle and willingness to walk through walls to make their company a success will surely leave a great impression regardless!

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Cutco Knives and startups

2012-09-28T13:34:35Z

When I worked for Cutco Knives one summer in college selling the world’s finest cutlery, my dream was to sell the Homemaker +8 at every meeting.  It was the Rolls Royce of knife sets and in every sales call I had, I always tried to flog the deluxe set.  Of course, more often than not, I left […]When I worked for Cutco Knives one summer in college selling the world’s finest cutlery, my dream was to sell the Homemaker +8 at every meeting.  It was the Rolls Royce of knife sets and in every sales call I had, I always tried to flog the deluxe set.  Of course, more often than not, I left with selling a spatula spreader or much smaller set.  Many a memory was brought back yesterday as my wife and I went through a sales pitch for Cutco knives from an enterprising college student.  His pitch was great…and entertaining…and the same from 20+ years ago – cut the penny with the scissors, cut some rope, lay out the catalog, and even the close.  Would you like the Homemaker +8 or the Homemaker +4?     How about the Essentials +5 or the Essentials.  As I sat in on the sales call, what I remember most about selling knives was that it was a tough and lonely job and my friends teased me the whole summer about being little more than a “door-to-door” salesman flogging kitchen utensils.  Looking back on that experience, I recognize that I learned so many valuable skills about selling and more importantly about myself in terms of constantly being rejected but still having the optimism and fight to move on to the next opportunity.  I am sure by now you are thinking, what does selling knives have to do with startups?I strongly believe that every entrepreneur should take a sales job at one point in their life, even for a summer.  Whether you are a tech guy or product guy or executive, you have to remember that you are always selling – not just to the external world like customers and VCs and partners but also internally as well, drumming up support, getting the team to buy into your ideas, and much more.  I believe there is sometimes a stigma for being a sales person but in reality no business can ever succeed without someone selling your product or service.   Selling Cutco Knives was great because I went through sales training which at the time seemed incredibly cheesy, became enamored with trying to win salesperson of the week and month, and learned how to use referral based lead generation to create sales appointments.  I learned about creating a great script to use on the initial sales call (great understanding for understanding the life of an inside sales rep), how to use a presumptive close (can we meet this Wednesday at 3 or 5), how to properly make a sales call, how to read my potential customer, and ultimately how to manage my own personal sales pipeline and funnel.  From that experience I went on to start my own window washing business and develop a deep appreciation for sales reps and how hard their job really is.  And I find myself selling every single day in my life as a venture capitalist – selling to potential investors, selling my value add to startups, selling to portfolio company CEOs on why they might try another way to accomplish a certain goal, and selling my own partner on why we should or shouldn’t do a certain deal.  If you are wondering what happened at the end of our sales call, my wife and I ended up buying the lovely Homemaker +8 and gave our rep a boatload of referrals. [...]



Startups and Intellectual Property (IP)

2012-08-15T16:08:20Z

Lately questions about Intellectual Property or IP have been cropping up left and right.  Eliot Durbin (my partner at BOLDstart Ventures) and I had a long discussion this morning in preparation for his panel today about IP and patents.  Last week, we met with a company and when we asked about their core IP, they […]

Lately questions about Intellectual Property or IP have been cropping up left and right.  Eliot Durbin (my partner at BOLDstart Ventures) and I had a long discussion this morning in preparation for his panel today about IP and patents.  Last week, we met with a company and when we asked about their core IP, they launched into a 5 minute discussion about the various patents they filed.  Do startups really think patents are going to make or break their business?  Yes, having core tech or IP matters but patents are a different question altogether.  Your best protection is continuing to focus on building your business, your product, and getting market share.  So what is my and BOLDstart’s stance on IP and startups.

1. We look at the team and the product and market first

2. We like to think that all of our investments have IP.

3. IP does not mean patent.  IP in our mind is your “secret sauce” for doing what you do better, cheaper, and faster than anyone else. Its great if you filed for a patent but that is a long process taking 18-24 months and by the time you get a patent the market opportunity may have already passed you.  Focus on building your product and market share, not on patents.  That is your best protection and competitive advantage.  Waiting for the patent office to tell you that you have a patent is a nice to have, not a must have.

4. Even if you have a patent, it takes tons of time and shitloads of dollars to defend.  Trust me, I’ve been there, and it seems to me that the only person making money in these cases are lawyers.  In addition when defending patents you will inevitably fight with the big boys with billion dollar balance sheets so that is not a place to spend your time and money.

5. Don’t start a company where there is already a patent battle brewing like email on phones.  We are looking for innovations, the next big thing, not yesterday’s way of doing it.

Hopefully that gives you a good perspective on our view on IP, patents, and startups. 

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What entrepreneurs can learn from Jeff Spicoli

2012-01-25T17:28:01Z

I know I may be dating myself here, but over the past few weeks I couldn't help but think about the movie Fast Times at Ridgemont High and one of the standout characters, Jeff Spicoli.  When asked by Mr. Hand, his teacher, why he keeps coming late and wasting his time, Spicoli answers, "I don't […]I know I may be dating myself here, but over the past few weeks I couldn't help but think about the movie Fast Times at Ridgemont High and one of the standout characters, Jeff Spicoli.  When asked by Mr. Hand, his teacher, why he keeps coming late and wasting his time, Spicoli answers, "I don't know." I Don't Know Fast Times at Ridgemont High at MOVIECLIPS.com In several meetings with entrepreneurs during the past few weeks, they would have been better off answering like Spicoli rather than giving me some hollow bull shit answer.  I want to make it very clear that I don't expect entrepreneurs to have all of the answers to my questions.  In fact, many questions I have may not have an answer today so "I don't know" will be your best answer. My one caveat is that the "I don't know" is followed by a how might you figure out the answer or a when might you figure it out.  This line of questioning is really just another way to test how you think and determine how our working relationship might be were I to invest.  I would rather have the honest "I don't know but I'll figure it out" then a made-up answer that will never allow you or your investors to really understand what is driving your business. [...]



Never give up but move on quickly

2011-10-21T14:24:18Z

As a young kid, I was always taught the valuable lesson of never giving up or quitting.  No matter how many times you get knocked down, you have to stand up and keep moving.  That is the same trait that I also admire in many of the entrepreneurs that I have funded over the years. […]As a young kid, I was always taught the valuable lesson of never giving up or quitting.  No matter how many times you get knocked down, you have to stand up and keep moving.  That is the same trait that I also admire in many of the entrepreneurs that I have funded over the years.  This mentality is what carries many great entrepreneurs from near death experiences to ultimate success.  However, I do caution that entrepreneurs should temper this "never give up" attitude with a "move on quickly" one as well.  Let me explain.  Many entrepreneurs will take this same "never give up" attitude with the sales process or raising financing.  On the one hand this attitude is what is absolutely necessary to get things done but on the other hand it can be quite detrimental.  What entrepreneurs need to do is learn how to qualify their leads and to do it quickly.  The worst outcome for an entrepreneur is to spend countless cycles on trying to close a deal that is not closable or spending way to much time on a lead only to end up giving away the farm to make it happen.  Never giving up may actually prevent you from finding the next great customer or funder.  I have seen this time and time again from many companies and what is problematic is that time is precious for a startup.  You only have so much time to hit your milestones so use it wisely.  When you are meeting with potential prospects make sure to qualify them in  the first meeting and understand if they really do have a need for what you are selling, the decision making process, the timeframe in which a decision is made, and ultimately the potential budget.  If the information does not meet your needs, move on quickly.  You can take your "never give up" attitude by trying to qualify as many prospects as possible rather than "never giving up" on one or two. [...]



Startups getting caught in No Man’s Land

2011-09-29T14:29:28Z

"No Man's Land" is traditionally known as the area between two trenches.  This is a reference to World War I and the vicious trench warfare and hand-to-hand combat that characterized that war. In "No Man's Land" lay a wasteland of dead bodies and other debris and shrapnel.  Increasingly I am seeing many startups who were ably […]"No Man's Land" is traditionally known as the area between two trenches.  This is a reference to World War I and the vicious trench warfare and hand-to-hand combat that characterized that war. In "No Man's Land" lay a wasteland of dead bodies and other debris and shrapnel.  Increasingly I am seeing many startups who were ably seed funded get caught in "No Man's Land" between the seed round and a true Series A round led by a venture capitalist.   This is happening because there are way too many companies raising seed capital but not enough executing their way to a Series A.  This can happen for many reasons including not raising enough capital in the seed round to begin with and of course not getting your product out the door.  So what does an entrepreneur do when caught in this predicament?  Many try to do an additional seed round or add-on to the prior round.  While not a bad idea, this is rarely successful because many seed funded startups have way too many investors who are more apt to write off the investment then to bridge more seed money.  Secondly many angel investors would rather invest in that shiny new car or first seed round then add more capital to a used car or startup that did not "get there" on its first seed financing.  Smarter entrepreneurs are increasingly doing two things to make sure they don't caught in "No Man's Land."  First, rather than getting 20 great names as seed investors, they are making sure to get at least 3/4 or more of the round invested by a couple institutional seed folks that may have deeper pockets and more ownership in the startup to really care about what happens in the future.  Secondly, the smarter entrepreneurs are really thinking carefully about what milestones need to be hit to raise that first Series A round and work backwards to determine how much financing they need to get there.  While not an exact science, it is imperative to think like this as you don't want to be one of the many seed-funded companies that will linger in "No Man's Land." [...]



The New York Startup Market Rocks and is REAL

2011-04-15T12:02:43Z

OK, I may be biased having been an early stage VC based out of New York since 1996, but I must say that the vibe, energy, and people at the Techstars NYC Demo Day event yesterday was simply awesome.  Dave Tisch and team simply did a fantastic job guiding the startups, recruiting the mentors, and […]OK, I may be biased having been an early stage VC based out of New York since 1996, but I must say that the vibe, energy, and people at the Techstars NYC Demo Day event yesterday was simply awesome.  Dave Tisch and team simply did a fantastic job guiding the startups, recruiting the mentors, and organizing the event.  I was quite honored to have been a mentor and to have had a chance to interact with so many high quality teams.  The audience was awesome as well bringing together many rock stars of the past with those of the future.  In addition, over 750 investors came in from all over including London, California, Boston, and DC to network and participate. Rather than go in-depth on each Techstar company like Alyson Shontell or Ryan Kim already have, I wanted to highlight some overarching thoughts on the NYC market having been an investor here for over 15 years.  As mentioned above, what I loved most about yesterday was not only catching up with many new friends, but also many old ones who were an integral part of NYC 1.0.  Besides talking about the interesting pivots that many of the Techstars companies took during their 3 month program, many of us simply could not resist talking about how the energy was similar to the mid-90s but why this felt different.  In fact, I would liken the 90's Silicon Alley scene as one of discovery but also one where you could argue that the "Emperor had no clothes" meaning that there were lots of great entrepreneurs and startups but no real lasting value created.  Look, New York had to start from scratch but 15 years later what makes this different is that we can see a much better result-the same energy combined with real operating and entrepreneurial chops, real succceses and failures, real IPOs and multi-hundred million dollar exits, and a focus on the entrepreneur and product, not on the spreadsheet. So why will this be different this time around: 1. Stronger Ecosystem-accelerators like Techstars, DreamIt, and NYCseedstart have real entrepreneurs and VCs with real experience advising these startups - the pivot and changes from many of these startups from DemoDay was quite impressive and evidence of a stronger ecosystem 2.Real technical experience-what everyone of these startups had in-common was a strong core team of technical founders, rather than business folks outsouring development.  And with that, it was clear to see how much these startups could accomplish with so little capital and just sweat equity.  These entrepreneurs understand the concept of lean startup and as opposed to entrepreneurs of the past who hailed from big media/ad agencies/big companies, this new generation of startups starts with the tech guys, the way it should be. 3. Financial support system-now you have Angels and VCs who get it.  I remember the number 1 complaint in the mid-90s, New York VCs don't get it.  They are risk-averse and spend too much time on spreadsheets analyzing the nth detail on a financial model instead of focusing on the talent and product/market.  15 years later, we have many Angels who are former entrepreneurs and many VCs who get it that are in NYC.  Add VCs from Boston and CA and elsewhere and you have quite an experienced plethora of investors to work with. The next inevitable question from this rah rah post will clearly be is this a bubble where yesterday further showed the frothiness of the market?  I can't comment on the public markets but what I can tell you is how these Techstars companie[...]



Reflecting on passed investments

2011-04-05T15:46:22Z

Every 3 months I dig through my "passed company" folder to look at what investment opportunities we passed on and why.  Inevitably, there are a few companies that are near-misses, but we end up passing on for whatever reason.  Did we pass because we didn't think the team was great or because we didn't believe […]

Every 3 months I dig through my "passed company" folder to look at what investment opportunities we passed on and why.  Inevitably, there are a few companies that are near-misses, but we end up passing on for whatever reason.  Did we pass because we didn't think the team was great or because we didn't believe that they could get a product launched?  Did we pass because of lack of traction in the beta release or because of concerns on valuation?  Looking at my "passed company" folder gives me an opportunity to test our reasons on passing and to see 3 months later if the entrepreneurs could actually execute or prove our concerns wrong. 

While many times I find doing this reflection further confirms our reasons for passing, I also find myself from time-to-time sending up a follow up note to check in on these near-misses or doing a quick Google search to see how the company has progressed since our last communication.  Inevitably, there will be a few that "got away" and seem to be doing quite well.  No one is perfect and looking back every quarter gives me an opportunity to better hone my investing acumen and further refine my understanding on what separates a potential winner from a loser.  Many times we are so busy that we can only look forward to the next new thing or next hot deal, but I encourage you to occasionally take a step back, look in the rear-view mirror, and learn from your past history.  I promise you that this reflection will only make you a better investor in the long run.

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