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Or-Tal's Writings

entrepreneur/mother/education revolutionist/high tech addict

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Hats Seeking Heads: Partners Needed

The hardest thing when founding a startup is to build the founding team. Some lucky entrepreneurs cook their startup right from the beginning through brainstorming with others, and voilà – team! But there are many entrepreneurs who come up with an idea and then start looking for their partners.

The relationship between cofounders is a lot like the relationships between spouses. So you’d want to make the right decisions and make sure you work great together. I recently read an amusing article on Inc. magazine suggesting a camping trip to test potential partnerships. I will be perfectly happy with testing the waters in an incubator or accelerator too. I don’t really feel the urge of eating dust in the desert. The thing is the article is about choosing your partner, assuming you have a pool to choose from. It’s not about finding them.

And finding partners is tricky.

So I started off with one potential partner, then a second one tagged alone, the first one said he is not seeking any active role in the company, and his job will probably be done before the production begins. The second one seemed promising as we met a couple of dozen times, but his availability seemed limited, until he finally admitted that assuming the risks and responsibilities of setting up a startup isn’t really what he is looking for right now. And woops! I have one and a half advisors, but no partners.

I advance in very little steps towards developing my own product, or at least its offline test version (I am not a programmer), but the search for co-founders is a real distraction:

hats

Can’t raise money to pay for the development of the product if there’s no team to meet the investors. Investors, as we all know, invest in people first, ideas second.

I can’t recruit developers if I can’t pay any salaries.

Risk assuming entrepreneurs who are looking to join a startup based on someone else’s idea are nowhere to be found here, in Israel. People either have their own idea or they expect salaries pretty much from the start of the startup. And the investors keep expecting established teams and launchable products (if not launched with traction…).

But keeping an optimistic and keeping an open mind I’ve met several great people over the last few weeks. One of them actually gave me several ideas about other less common founding models: for instance, to have a potential team ready to meet investors and declare their intention to join the startup as soon as funds are there to cover their costs is one of them.

Does it really work?

Reply: Why Index believes Israel is about to have its moment

I read the GIGAOM article titled “Why Index believes Israel is about to have its moment” by Bobbie Johnson yesterday and started to write my comment, when I realized it’s pretty long and should be posted on my own site too. So…

It’s true. Israel is about to have its moment.
It does not have a deep culture of UI and design and is traditionally technology lead. So much so, that if you are not offering a big tech invention (preferably the scope of the wheel…) people hardly perceive you as an entrepreneur, and would be skeptical about investing. Well, at least that was the case until recently.
Almost a decade too late concepts and web ventures have started to gain some acknowledgement, but as mentioned in the GIGAOM article, web entrepreneurs have had to move to the US to build their company.
Sad and a bit strange too, considering the development in communications and access. One of the things Saul Klein of Index Ventures said at a recent conference in Tel Aviv is that entrepreneurs don’t have to think relocation so quickly, and if they do, then a midway – like the UK – can sometimes be better than all the way to the US, especially if you intend to go global, beyond the US market. He also mentioned a CEO who traveled to the US once a month, if I remember correctly, and people in the US west coast he met with regularly were not even aware of the fact that he wasn’t based in the US.
What??? Really?
Yes. After all there are phones, email, Skype…
Still, there are challenges in running an international web venture from our small country, 7-hour time-zones apart from the east coast. I know. I am facing those challenges daily, though thankfully I have a NY based partner. That does not prevent the question from popping at every meeting “so, are you planning to relocate?”.

But Israel is about to have its moment, I say. It is. People won’t have to relocate to run their businesses. Companies will always need local marketing people at every market they’re penetrating, but there is no real excuse for managements to relocate into those markets.

As for the question “Can a home market of just 7 million people ever be big enough to support multinational internet businesses? Is Israel, which exists in its own political and geographical bubble, able to play host to all this?” – Israel can play host but not because of its 7 million people market, nor location, obviously. It’s the state of mind that provides the nurturing environment entrepreneurs need to grow a multinational internet business. It’s the spirit that has always existed here, and is now gradually shaking off the 7-million-people & geographical-constraints thanks to open and thick worldwide communications and social media.

A couple of years ago I attempted to establish an elementary school for entrepreneurship in Israel. I believe in entrepreneurship as a state of mind. I believe that directing kids at thinking entrepreneurship can prevent violence and bullying and promote creativity, learning and happiness, as in being self content. Looking around me there are so many broken systems, in Israel, in its neighboring countries and around the world. Only entrepreneurs can really make a difference, create the change. Being an entrepreneur you take responsibility over your own destiny, you give birth to ideas and do what it takes to execute them. You learn to collaborate and appreciate others, and the diversity around you. I promise you I am not taking it too far when I say that I believe entrepreneurship can bring peace. And so, yep, Israel is about to have its moment.

VC Marketing 3: The Listeners

After a while the entrepreneurs seeking investment can get a pretty bizarre feeling. You are driving, yet you’re on auto-pilot, and you’re getting nowhere. Seriously, are we driving at all?

But then comes this surprise meeting when you realize that yes, there is a road, you’re on it, and you’re definitely driving. You lose the auto-pilot and you’re wide awake.

These people can either invest or not, but you will remember them and their names, and you will follow them in years to come, because they did this one bit of basic marketing right.

They lost the auto-pilot!! They listened, communicated. They wanted to understand your message. Weren’t afraid to ask the tough questions or make suggestions. Yes those questions were directed at you, and not at every entrepreneur that came into their offices.

If the VC or investment firm has done their homework, you will meet their person who is the most-knowledgeable-in-your-area that they have. And if this person has done his or her homework, they would have researched your business, your industry and each one of the company’s partners to better prepare. Their listening has started way before your first handshake.

After all, they wouldn’t want to miss on a great opportunity only because they forgot to listen.

VC Marketing – They do it 2, Differently

Rise above the noise. Every marketer wants it. And yes, it’s true for VCs and angel investors too. Let’s be different. Let’s get noticed. Let us become entrepreneurs’ first choice.

One such investor, rising above the noise around me is Chris Sacca, with his fund “Lowercase Capital“. I love their web site. Or should I say his web site??

Unlike many VCs, made of a team of partners and professional employees proudly presented to potential investments and investors, Chris Sacca is, well, Chris Sacca. An accomplished venture investor and an entrepreneur. Lowercase is Chris and Chris is Lowercase.

If it wasn’t for the constant use of the word “we” on their web site Lowercase Capital could well seem to be a one-man-show. Its web site has a unique terminology and design. Somewhere between retro, old fashioned and good old westerns, this VC founder is featured under “proprietor” and the entrepreneurs wishing to get in touch are referred to as “prospecting”.

Their visual and verbal difference from the majority of venture capital investors and investment firms is not something they did because they just wanted seem different, or only to rise above the noise. Lowercase capital is stressing how apart it is from the stream under “creed” – their vision, a section opening with the words “Venture capital is broken”. Their appeal to entrepreneurs is coming from some point of empathy with the entrepreneurs’ deep pain and frustration which often accompanies the fund raising process. They are using good old fashioned sentimental motivation in marketing.

This is a web site entrepreneurs would want to read through and through. I am not sure anyone would bother to read all verbals on any VC web site. But here, you will. This web site gives you the feeling that it is indeed about compatibility and personal chemistry between you, the entrepreneur, and “the proprietor”. You would want to know what the other side is seeking and how to get them interested in your particular venture. So you will read every word there and make sure you can convince them that you are the entrepreneur who speaks the Lowercase Capital language. You and no other.

And to be sure you do – they offer you a guide, under “prospecting”. It is not a web form, but it is very much the format you are expected to use when applying. Use it smartly.

And last but not least – the call for action:
On “outfit”, the introduction section – “So take a look around this site and see if we are a fit. If so, we can’t wait to hear from you.”
On creed it is “We won’t be wearing a suit, and our lawyers won’t be in the meeting, but if you think we can help you, let us know.”
On prospecting it is “Now, send your pitch here and let’s get to it.”

Now, if that doesn’t get you on the move, what would?

Over Prepared? No such thing.

You can never be prepared enough for a meeting with investors. There’s always something you learn at each meeting. Some other question no one has asked before. All can become perfectly legitimate grounds for new ideas of your product’s development.

The question of entrepreneurs being prepared for a meeting with investors keeps surfing in various modes. As someone who was a journalist for many years, I always like to be prepared for meetings and realize it’s hard to be over prepared.

Which is why I smiled when I saw this question on Quora this week:
What are the signs of an entrepreneur who is over-prepared for meetings with investors?. I thought this could be posted by someone who watched too many of “The Mentalist” episodes…
David Rose, Managing Partner, Rose Tech Ventures, replied the top rated reply which I am happy to quote for the benefit of my fellow entrepreneurs:

“The sign of an over-prepared entrepreneur is…that he gets funded!
Seriously, it is impossible to be over-prepared when pitching to potential investors. You should know 110% of whatever there is to be known about your business, your market, and your competitors. You should be able to reel off the life histories of yourself and your team. You should be ready to give the investor specific details of every exit and acquisition in your space for the past five years. You should be able to do your full pitch in the dark, without slides, in three languages, both forwards and backwards.

And if you can accurately show how your venture relates to other companies in the investor’s portfolio, and how the investor can specifically help with your company’s future growth…you’ll be perceived as a smart, thorough entrepreneur who really did your homework.

Over-prepared? Nope, there’s no such thing!?”

At this point I need to stop writing my blog and go back to homework. There’s no such thing as over prepared.

The Mangorangeberry Startup

Imagine you just had the thought of inventing a Mangorangeberry, a product that doesn’t exist yet. Sure there are oranges, there are mangoes and there are berries, there are even fruit salads, but no one has thought or produced anything similar to your idea of Mangorangeberry.

You begin to explore the market and see what they could be thinking about such an idea, without giving away the exact map of your Mangorangeberry. You encounter many people who are talking about the need for a combination of these flavors, these textures, the colors and the shapes of oranges, mangos and berries.

You read articles of great scholars explaining the need for change in the fruit market, especially the combination of oranges, mangos and berries. You encounter professional chefs aching to get their hands on such a combination. And thousands of hungry people seem to be just waiting for your Mangorangeberry to appear.

You know the concept is right.
You know the timing is perfect.
You know what should be done.

Yet…

You need to buy the land, buy the seeds, hire professional lab researchers to develop the combination’s seeds, plant the seeds, grow the plants, harvest and then, begin the tasting phase. You have a great idea, but you can’t make it happen all alone. You will either need money to buy the land, seeds, lab work and field work, or you need to get partners: one with the land, one a lab pro, one with the seeds… OK, with the planting and harvesting you can manage.

Now the search begins.
And potential partners are all over the place. They are interested. They are enthusiastic about your idea. But still, you haven’t found the partner with the land, or the partner who’s the lab pro and are available to join you.
Those partners, who will contribute their new set of skills, totally different from the set of skill you bring in, are hard to come by. Or they are too busy. Or they can’t afford to invest their time and effort in your startup.

Or maybe you aren’t looking in the right direction? Or perhaps you have been making the wrong offer?

The Startup Experts Pattern

Following a periodical analysis of my on-going consulting business I have decided, a couple of days ago, to create a survey. The purpose of this survey, like the purpose of most surveys, is to learn the habits, way of thinking and behavior of my target audiences.

In this case, I am trying to understand the pattern of using experts by hi-tech entrepreneurs. If you are one and would like to contribute to my understanding of this subject – please go to: http://www.yourpinion.net/The_Startup_Experts_Pattern and continue reading this post later.

Over the last couple of years I have been testifying to work like a missionary, investing widely in distributing my philosophy and belief. I believe that one may have the most amazing, original and revolutionary idea ever, but it’s worth nothing if it is not communicated in the right way to the appropriate target audiences, which change over the company’s lifetime.

The comments and responses I received encouraged me to stick to my specialty – communications strategies. However, “communications strategies”, as a title, is a communications challenge in itself. Most entrepreneurs in Israel may know what is a strategic consultant, a marketing consultant, a branding firm, a graphic designer or what a public relations firm do, but when you use the uncommon term, “communications strategist”, they are puzzled and do not know what type of services to expect under this title.

Let me clarify that I didn’t come up with this title. Google “communications strategist” and you may find nearly 40,000 results. However, search for a “strategic consultant” and you will get almost double.

The way I see it, a communications strategist is the best help a young start-up can get. It includes relevant aspects of strategic consulting, marketing consulting and branding all squeezed into a more concentrated and efficient process. Companies at more advanced stages may benefit from a communications strategist when facing , for example, or other specific challenges.

But what really matters is how the market perceives communications strategies, if at all. I hope this survey will help me answer this question.

The chicken or the egg, marketing or the product?

Last week I participated in the Tel-Aviv-Yafo Entrepreneurs Meetup I organized. The meeting presented a panel of three, Danny Arazi, Ouriel Ohayon, Yaniv Golan and was moderated by Avichai Levy (about the participants). The debate was around the question “How early should a company begin to establish its brand and marketing strategy?”

It’s an interesting question and rather an emotional one. It is always emotional when you get to marketing. Being a marketing person myself I am lacking some objectivity. However the panel presented people like Ouriel Ohayon – a VC and tech oriented man and Yaniv Golan – CTO of Yedda, alongside the multifaceted Danny Arazi, and the more marketing oriented Avichai Levy, so it was a good opportunity to get a more comprehensive impression of the situation.

There were three of us when we prepared for the panel. Esther Loewy and Avichai Levy joined me. Esther is a Kellogg-Recanati graduate and a marketing communications consultant. We started with the gut feeling that the main problem the Israeli market is facing is either total disregard for marketing, or the opposite, “know-it-all” approach.

We felt encouraged by the discussion developed with the entrepreneurs from the audience, because it became clear there is a growing awareness of the importance of proper marketing strategic planning. However, the “know-it-all” approach seems to be leading the way even to this blessed result. VCs and angel investors are examining the marketing strategy of startup companies. It is rare that a startup will raise funds without any marketing planning.

However, some expressed their opinion that being marketing-aware is a needed requirement from anyone who wishes to establish a startup. Since at the beginning entrepreneurs are lacking the funds to hire a marketing function, they are required to work out their marketing strategy by themselves. And the general belief is – that if you can’t do it, than you can’t build your startup company. The result is – that more computer engineers or electronics engineers are doing marketing. It is not their specialty, nor their forte. But it is a necessity, driven by the market.

Quoting one of the panelists, Ouriel Ohayon: “But if your service is all about seducing, attracting and understanding the user, the marketing is a key competence of the company. Even more: the whole DNA of the company should be imprinted with marketing. From the CEO to the product team. Marketing is not a function or a title: it is the company. Marketing is about having a great product, a great user experience, a good logo and brand identity, a good customer service, a good distribution road map, a good customer acquisition program and even more important a good customer retention program.”

It is encouraging to think that investors hold marketing so highly. Repeating the DNA phrasing, Ouriel has rejected the idea of outsourcing or consulting. This has to be an internal value, he believes, outsourcing can come later.

But do all entrepreneurs have the marketing knowledge and qualities? People may be brilliant developers, but when it comes to marketing, a whole new set of tools, knowledge and …. well, eyes is required.

I think the solution might lie with cooperations and partnerships. And if you don’t want “to marry” a partner, there are ways to outsource tasks or get specific help or guidance from marketing professionals in many models: deferred payment or payment with equity, or an hourly based payment, which isn’t the same as a salary for a full time hi-level marketing professional. Using an outer source doesn’t diminish or belittle the entrepreneur’s initiative. If anything, it is a growing experience. The entrepreneur gets to learn of marketing and practice marketing thinking, since he must take and active part of any marketing strategy creating process. In other words, if you weren’t born with this DNA, why not use the available tools to acquire it?

Does online networking also give you the jitters?

Last Thursday I held my 3rd Entrepreneurs Meetup event in Tel-Aviv. I think about 60 people attended and it went very well. The day before I had those regular jitters and “what if’s” annoying thoughts, but once I cleared those I knew the jitters will go away too.

 

The Tel-Aviv-Yafo Entrepreneurs Meetup group was established via the meetup.com web site by a fellow entrepreneur, Gadi Guy. The basic idea is to create an online community over the web site, which actually gets out and meets, in the real world, for some real live networking. I was appointed organizer of the group about 4 months ago and took it very seriously. It shows: we are up from barely 12 who showed up to the November meeting (5 of them personal friends) to approximately 60 on each of the following meetups which I organized and unfortunately had to close registration to at some point.

 

Strangely enough only a year ago I dreaded networking. I would go to a public event not knowing where to place myself. Thinking once to often about where I am looking (“don’t stare!”) and how I am holding my hands (“don’t cross them!”) or what the hell am I supposed to say to create that magic called networking. With the help and guidance of my amazing business coach, Ziv Malbin, I learned how to do it. Still getting those jitters every time, but able to perform.

 

Networking is one of the best marketing tools available to us. It has always been this way, but in these last several years, networking has taken on more faces and formats than we can list or follow. Online networking has brought this on and the current trends show that online is definitely not taking the place of real-life networking, it’s only enhancing it, magically, wildly and beyond our wildest imagination, taking us to places we never thought we could reach.

 

This post will be continued…