here's an interesting article I read from Dave mcclure. here's a vc who doesn't mind being thought of as a bad-guy, but is really doing a favor to his pitchers- by telling them what vc's really want.
http://www.typepad.com/services/trackback/6a00d834517b5669e2011571637b9c970c
in short, says Dave: pitch the problem, not the solution. read on!
-- Post From My iPhone
Monday, August 17, 2009
Friday, July 17, 2009
A Few Good Men: My Experience in Partnership
There are many decisions one makes in a startup.
The ones that hit us first are the core idea, legal issues, startup funding and employee hiring.
But finding the right partners is just as important, as I found out the hard way.
Here's my story of realization: my startup needed partners, and not just any partners.
In the beginning: Flying solo
I started solo on my web-based startup. I had a fair vision for the finished product, and had a good grasp on the technology.
Bootstrapping my way; I'd head to my home computer everyday after my day job.
On weekends I'd simply invest an additional 16 hours of my time.
To get things done sooner, I hired freelancers by the dozen from websites like guru.com and elance.com.
Choosing the ones with five-star reviews, good looking portfolios, and low end bids - I assembled my little team.
But I was in for a surprise. The hope was to get done fast and on the cheap; the reality, though, was that the typical freelancer was of no help. Without first-hand recommendations, finding the right freelancer was a shot in the dark.
Moreover, every aspect of the website demanded meticulous planning. Be it in legals, application development or site design - I had to invest a lot of thought so I won't have to rework later.
Making decisions in all these areas - I'd often have to step out of my area of expertise. Was I starting an LLC or Corp? Would the website be colourful or serious, the text formal or chatty? Not only were these myriad decisions time consuming - they were often difficult to make, especially since I didn't have a relationship with the freelancers assisting me yet, so was compelled to always do a little research.
Finally, when my Czech developer contacted me on launch date saying he hadn't done anything - I realized I needed help in managing freelancers and make decisions. I realized I needed partners.
Attracting Partners
Looking for people who can help - I started speaking with friends.
Foreseeing myself dipping into a lawyer's knowledgebase or a designer's design skill, I expected partners to cover my weak areas with their strengths.
Many friends signed up to partner with me - and I promised ownership in exchange for their talent. Retaining majority ownership, I wasn't so keen on monetary investments from them.
Soon friends, and their friends were contacting me. Everybody wanted in. It was inspiring to see people contribute to my website without an immediate reward in sight. The team soon grew to eight partners.
Quantity not Quality
Few weeks later, the plan wasn't working. Though the group grew, it wasn't effective. I hesitated to confront the group, since these were friends helping for little or no return.
The semi-professional relationship and subpar performance from some of my friends, put me in a tough spot. I started to wonder - do I ask some of them to leave?
I surveyed my friends to understand why they are helping.
Gently probing, I found that a few were passionate about the idea; though many were looking for a 'startup experience', were doing this as a favor, or were simply bored with their 9-5 jobs.
Those lacking passion were not bringing in any energy to the starutp. Those with other benefits in mind weren't top-dogs on the project.
The Filtering Process
Unsure of how to deal with my team, I reached out to Vikrant -Head of HR in a Multi-National Organization.
Vikrant suggested that I work with this group purely as with professionals. "During work time, work; and when you're hanging out, then hang out", said Vikrant. This made sense to me.
I started working anew with the team. Treating them as professionals, I started demanding the best from them. I could see some partners were resenting it, but I persisted. Everybody on the team needed to be accountable.
I also figured that holding people accountable for their work, and asking them to finance the startup is an acid test for their commitment. So I stressed our need for more funds, and requested everyone come up with a comfortable monthly contribution.
While some people had genuine issues in making monetary contributions, there were many who weren't serious, and this request effectively weeded them out. Those not truly 'with' the idea started to get more involved with their lives, and move away from the team.
My team was now shrinking; but I was happy the relationships were not sacrificed. I did not have to ask anyone to leave, and those not interested were doing so voluntarily.
I was soon down to three partners. But more weeding remained. Of these three, two continued to be a cause for concern: one wanted a special status in exchange for his monetary contribution - this made me unsure of the trust factor, and I foresaw more issues in the future. The second did not exhibit the passion so important to a startup, and wasn't timely on his commitments.
I was scared of the impact of losing two more members from our team - especially since we were down to half our peak strength. But after much thought, I concluded that my company can only be as effective as its founders. And so I made the tough decision. I dropped the two.
Finally I was left with just one other partner. This person was passionate about the idea, and owned the idea and the project just as I did. I could sense his ownership of the startup even before he contributed to it. And he would drive the project forward, not wait to be driven.
He was a great sounding board, and made up for my weaknesses - such as in design.
The End State
While I admittedly miss the thrill of a large team of volunteers, I think dropping the fluff has helped my organization move forward better - decision making is quick and ownership of tasks is complete.
With just one partner - but one who is committed to the project, I find I have the sounding board I needed, and the ability to delegate to a trusted colleague.
In summary, after my trials with partners - I've decided that it's not about the numbers. It's about a committed team, that is passionate, makes up for each other's weaknesses and is willing to put their skin (i.e. money) on the line.
The ones that hit us first are the core idea, legal issues, startup funding and employee hiring.
But finding the right partners is just as important, as I found out the hard way.
Here's my story of realization: my startup needed partners, and not just any partners.
In the beginning: Flying solo
I started solo on my web-based startup. I had a fair vision for the finished product, and had a good grasp on the technology.
Bootstrapping my way; I'd head to my home computer everyday after my day job.
On weekends I'd simply invest an additional 16 hours of my time.
To get things done sooner, I hired freelancers by the dozen from websites like guru.com and elance.com.
Choosing the ones with five-star reviews, good looking portfolios, and low end bids - I assembled my little team.
But I was in for a surprise. The hope was to get done fast and on the cheap; the reality, though, was that the typical freelancer was of no help. Without first-hand recommendations, finding the right freelancer was a shot in the dark.
Moreover, every aspect of the website demanded meticulous planning. Be it in legals, application development or site design - I had to invest a lot of thought so I won't have to rework later.
Making decisions in all these areas - I'd often have to step out of my area of expertise. Was I starting an LLC or Corp? Would the website be colourful or serious, the text formal or chatty? Not only were these myriad decisions time consuming - they were often difficult to make, especially since I didn't have a relationship with the freelancers assisting me yet, so was compelled to always do a little research.
Finally, when my Czech developer contacted me on launch date saying he hadn't done anything - I realized I needed help in managing freelancers and make decisions. I realized I needed partners.
Attracting Partners
Looking for people who can help - I started speaking with friends.
Foreseeing myself dipping into a lawyer's knowledgebase or a designer's design skill, I expected partners to cover my weak areas with their strengths.
Many friends signed up to partner with me - and I promised ownership in exchange for their talent. Retaining majority ownership, I wasn't so keen on monetary investments from them.
Soon friends, and their friends were contacting me. Everybody wanted in. It was inspiring to see people contribute to my website without an immediate reward in sight. The team soon grew to eight partners.
Quantity not Quality
Few weeks later, the plan wasn't working. Though the group grew, it wasn't effective. I hesitated to confront the group, since these were friends helping for little or no return.
The semi-professional relationship and subpar performance from some of my friends, put me in a tough spot. I started to wonder - do I ask some of them to leave?
I surveyed my friends to understand why they are helping.
Gently probing, I found that a few were passionate about the idea; though many were looking for a 'startup experience', were doing this as a favor, or were simply bored with their 9-5 jobs.
Those lacking passion were not bringing in any energy to the starutp. Those with other benefits in mind weren't top-dogs on the project.
The Filtering Process
Unsure of how to deal with my team, I reached out to Vikrant -Head of HR in a Multi-National Organization.
Vikrant suggested that I work with this group purely as with professionals. "During work time, work; and when you're hanging out, then hang out", said Vikrant. This made sense to me.
I started working anew with the team. Treating them as professionals, I started demanding the best from them. I could see some partners were resenting it, but I persisted. Everybody on the team needed to be accountable.
I also figured that holding people accountable for their work, and asking them to finance the startup is an acid test for their commitment. So I stressed our need for more funds, and requested everyone come up with a comfortable monthly contribution.
While some people had genuine issues in making monetary contributions, there were many who weren't serious, and this request effectively weeded them out. Those not truly 'with' the idea started to get more involved with their lives, and move away from the team.
My team was now shrinking; but I was happy the relationships were not sacrificed. I did not have to ask anyone to leave, and those not interested were doing so voluntarily.
I was soon down to three partners. But more weeding remained. Of these three, two continued to be a cause for concern: one wanted a special status in exchange for his monetary contribution - this made me unsure of the trust factor, and I foresaw more issues in the future. The second did not exhibit the passion so important to a startup, and wasn't timely on his commitments.
I was scared of the impact of losing two more members from our team - especially since we were down to half our peak strength. But after much thought, I concluded that my company can only be as effective as its founders. And so I made the tough decision. I dropped the two.
Finally I was left with just one other partner. This person was passionate about the idea, and owned the idea and the project just as I did. I could sense his ownership of the startup even before he contributed to it. And he would drive the project forward, not wait to be driven.
He was a great sounding board, and made up for my weaknesses - such as in design.
The End State
While I admittedly miss the thrill of a large team of volunteers, I think dropping the fluff has helped my organization move forward better - decision making is quick and ownership of tasks is complete.
With just one partner - but one who is committed to the project, I find I have the sounding board I needed, and the ability to delegate to a trusted colleague.
In summary, after my trials with partners - I've decided that it's not about the numbers. It's about a committed team, that is passionate, makes up for each other's weaknesses and is willing to put their skin (i.e. money) on the line.
Sunday, June 21, 2009
Resource Management - Cloud Computing style
Tired of paying high fees on a per project basis, we were wondering how to reduce cost.Though we hesitate to do IT project in-house - with the burden of having full time employees, location setup costs and higher on-site wages; getting the job shipped offshore was also problematic - due to lack of monitoring.
We tried some of our industry standard methods:
Fixed price - typically professionals would have issues about requirements at the end - and would speak of misreading/misunderstanding them at the time of delivery. At that point it would be back to the negotiating table.
Hourly rates - We found ourselves paying significantly higher amounts in this model - and started wondering if the same professionals slowed down? Or perhaps they were snoozing during billing hours?
One solution that came to mind was odesk:
odesk is a website that allows you to hire offshore workers, and monitor their work too. So you're sure you are only paying for real work time.
Meet Cloud Computing:
However, the best solution for us, came in the form of a former IT company we found on guru. We knew this firm to be professional in their work - committed to timelines and delivering quality code. But they were expensive.
To use their expertise, while cutting costs - we worked out a unique contract that would work for both of us:
We promised them a long term contract - and we would pay a fixed monthly charge per resource.
Based on the project, this person could be a designer, a programmer, or a tester.
As long as we do not exceed the 180 hours in the month, it won't matter which we use.
Next, each project (or 'work packet') we hand the company - would have a mutually agreed hourly effort.
This gave us the flexibility of assigning different types of projects to the company, while having a low blended rate. The company is also hedging its risk, given a long term contract.
The management and resource allocation issues are handed over to the company - so they can plan their resources given our work forecast.
Update:
So far, this plan has worked well for us. Of course, we're just testing the waters here - we have built flexibility into this plan, so we aren't too tough on hourly variations in effort for now.
Monday, April 13, 2009
Time for funding...
Likebucks so far was an eye-candy website, with some of the user interface in place, but the price meta-search still be setup.Since we're expecting the search to be ready by mid may, we're now starting work on the business plan, to seek funding.
Anything else one should do to in parallel for approaching VCs?
We don't know much about business planning. So to ease the pain, we purchased a Business Planning software (Business Plan Pro 11.0), and are working with it to come up with the plan.
I guess the business plan is a first, but important step to get funding.Anything else one should do to in parallel for approaching VCs?
Sunday, March 15, 2009
Saving cost on webhosting
We've had a shared server for $8 a month, and then a dedicated server for $165 a month. While the shared server now acts as a development area, and is struggling to handle our database load (we often get knocked out due to cpu hogging), the dedicated server is simply a hole in the pocket (given the small size of our pockets) - even though its performance is dependable.
So what seems to be the solution? Instead of going for a VPS (Virtual Private Server), we decided to host our own server. This way, we'll own an asset, and will not just be leasing equipment.
Ofcourse, once our website requires more robust hardware (failover servers, separate database servers, hardware firewalls and such), we'll have to go back to professional server managers.
Soon we'll be getting a Dell Poweredge T100 running Ubuntu Intrepid Ibex.
Surprisingly, this server was a steal at its price, and should pay for itself in 3 months flat.
We will share our home network with this server for the time being (and set our routers to give it priority on bandwidth). Once the network requirements go up, we'll either go to a rack space provider or get an internet connection for the server.
What about the static ip? We're going to shoe-string it here as well. To avoid the cost of static ip, we'll use a service called dyndns which ensures our url always points to our server's ip address - even if the server ip changes.
Lets hope this is wise cost saving, and doesn't hurt us in the long run. The risk is definitely high given I'm the admin!
So what seems to be the solution? Instead of going for a VPS (Virtual Private Server), we decided to host our own server. This way, we'll own an asset, and will not just be leasing equipment.Ofcourse, once our website requires more robust hardware (failover servers, separate database servers, hardware firewalls and such), we'll have to go back to professional server managers.
Soon we'll be getting a Dell Poweredge T100 running Ubuntu Intrepid Ibex.
Surprisingly, this server was a steal at its price, and should pay for itself in 3 months flat.
We will share our home network with this server for the time being (and set our routers to give it priority on bandwidth). Once the network requirements go up, we'll either go to a rack space provider or get an internet connection for the server.
What about the static ip? We're going to shoe-string it here as well. To avoid the cost of static ip, we'll use a service called dyndns which ensures our url always points to our server's ip address - even if the server ip changes.
Lets hope this is wise cost saving, and doesn't hurt us in the long run. The risk is definitely high given I'm the admin!
Sunday, February 22, 2009
Collaborating in a global startup
As my website team has been growing, we've been wondering what's the best (and cheapest) way of keeping in touch with each other. We definitely don't want to spend on getting a facility for our team. We'd rather people work from home, and keep in touch online.
Here's a sum up of the tools we use (in no particular order) to get together and collaborate. Note, all tools are very usable in their free versions:
1. Google Apps:
Google Apps is the single most important collaboration tool for us..
Apart from setting up free email (yes, 7gigs and 99.9% uptime are good enough for us, thank you) with all the gmail features, we also get google docs, google talk with chat, calendars and https connectivity for security.
Google sites is another feature that adds in another level of sharing, but we haven't got to that level yet.
2. Skype:
Skype allows us to communicate with each other over a secure channel - whether it is voice or chat.
Skype also gives inexpensive communication options - such as unlimited US and Canada dialing and your own incoming number with voicemail - for under ten bucks a month (there's another application called MagicJack which claims $20 for the whole year - but we haven't tried that out yet).
Skype is also widely used by freelancers, so it is an invaluable tool to communicate with your team and freelancers.
If you would rather not get tied to your computer with a headset, there are excellent phones like this one from linksys, which give you crystal clear communication, by connecting with your router lan cable directly.
Skype also has options of auto-forwarding to your cell phone, and conferencing, which are invaluable.
Last up, you can pay for some packages, which allow you to have a phone answering system setup on skype.
3. Projjex
Given the high costs of using MS Project, and the fact that its not really collaboration friendly unless everyone has the app on their computer, Projjex was an excellent option for us. Though I dearly miss the Gantt Chart, which I can't seem to get here, projjex allows you to track your projects to completion and has a great, easy to use interface.
In your project meetings, everyone can login to their projjex account and will know what you're talking about. Also there are reminders and advanced project tracking features there.
4. Dimdim
Oh dimdim! The best thing since sliced bread I think!
Dimdim will give you free online meetings - get people onto a desktop share, do a whiteboard together or surf the internet together. Also you have presentations and online chat.
Better still, you get a free dial-in number to conference in your listeners and have a dialogue.
Multi-party webcam is also possible, though we weren't that keen on seeing how each of us are dressed during our meetings!
Dimdim is still being developed, but is relatively stable.
We did have a concern that you can't hear people signing in and out of the call, which brings up confidentiality questions.
I have also identified another free conferencing system that looks promising: Free Conference Call
Well these were some of the great tools I came across - all free. These have greatly added to our team being in regular touch with each other.
Do you have some other tools to share?
Here's a sum up of the tools we use (in no particular order) to get together and collaborate. Note, all tools are very usable in their free versions:
1. Google Apps:
Google Apps is the single most important collaboration tool for us..
Apart from setting up free email (yes, 7gigs and 99.9% uptime are good enough for us, thank you) with all the gmail features, we also get google docs, google talk with chat, calendars and https connectivity for security.
Google sites is another feature that adds in another level of sharing, but we haven't got to that level yet.
2. Skype:
Skype allows us to communicate with each other over a secure channel - whether it is voice or chat.
Skype also gives inexpensive communication options - such as unlimited US and Canada dialing and your own incoming number with voicemail - for under ten bucks a month (there's another application called MagicJack which claims $20 for the whole year - but we haven't tried that out yet).
Skype is also widely used by freelancers, so it is an invaluable tool to communicate with your team and freelancers.
If you would rather not get tied to your computer with a headset, there are excellent phones like this one from linksys, which give you crystal clear communication, by connecting with your router lan cable directly.
Skype also has options of auto-forwarding to your cell phone, and conferencing, which are invaluable.
Last up, you can pay for some packages, which allow you to have a phone answering system setup on skype.
3. Projjex
Given the high costs of using MS Project, and the fact that its not really collaboration friendly unless everyone has the app on their computer, Projjex was an excellent option for us. Though I dearly miss the Gantt Chart, which I can't seem to get here, projjex allows you to track your projects to completion and has a great, easy to use interface.
In your project meetings, everyone can login to their projjex account and will know what you're talking about. Also there are reminders and advanced project tracking features there.
4. Dimdim
Oh dimdim! The best thing since sliced bread I think!
Dimdim will give you free online meetings - get people onto a desktop share, do a whiteboard together or surf the internet together. Also you have presentations and online chat.
Better still, you get a free dial-in number to conference in your listeners and have a dialogue.
Multi-party webcam is also possible, though we weren't that keen on seeing how each of us are dressed during our meetings!
Dimdim is still being developed, but is relatively stable.
We did have a concern that you can't hear people signing in and out of the call, which brings up confidentiality questions.
I have also identified another free conferencing system that looks promising: Free Conference Call
Well these were some of the great tools I came across - all free. These have greatly added to our team being in regular touch with each other.
Do you have some other tools to share?
Wednesday, February 18, 2009
Working by Day, Working by Night
The last few months I've been able to moonlight on my day job pretty well. I was thinking it's because I've become a time management master.
Well, the last few days sure went to prove that wrong. Its been crazy busy in my day job, and the evening job of doing the startup can slowly start taking a back seat.
Anyone out there who's been moonlighting? Any time management tips for us pseudo time managers?
Well, the last few days sure went to prove that wrong. Its been crazy busy in my day job, and the evening job of doing the startup can slowly start taking a back seat.
Anyone out there who's been moonlighting? Any time management tips for us pseudo time managers?
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