SLO Entrepreneur

May 20, 2005

December 26, 2006

from:
http://andrewchen.typepad.com/andrew_chens_blog/2007/02/10_ways_to_chec.html
http://andrewchen.typepad.com/andrew_chens_blog/2007/02/verifying_start.html

10 ways to verify assumptions

I recently blogged about one of the websites I worked on straight out of college, and the lessons I learned about verifying assumptions early on.

Let me give you 5 customer-centric questions and then 5 business-model centric questions. These are all things you should be working on before, or along side, development of your consumer internet product.

1. Who is your product is for?
2. What is the context of your customers’ world?
3. What motivations and values do they have behind their actions?
4. When potential customers see your product, what happens?
5. Do you talk to your customers every day?

6. What is the “core mechanic” (or minimum feature set) of your product?

7. What factors can kill your business model?
8. How do you acquire users? Can you make an existence proof?
9. How do you make money? Can you make an existence proof?
10. What technology do you depend on? Can you prove it can work?

Verifying startup assumptions, Part 2

I recently blogged on 10 ways to verify assumptions around your startup project, but left the details as an exercise to the reader. I wanted to add a couple notes to what I wrote…

Notes on customer-centric questions

1. Who is your product is for?
2. What is the context of your customers’ world?
3. What motivations and values do they have behind their actions?
4. When potential customers see your product, what happens?
5. Do you talk to your customers every day?

In general, I found that when I was busy failing left and right on my various projects, a big chunk had to do with misguided assumptions about who users were, and why they would be interested in my product. In general, if you’re not declaring a target customer for yourself, and thinking about how to approach them in the best way, both from a marketing and product standpoint, then you’re not thinking about your user enough.

Are you building tagging/social networking/whatever for no reason?
One thing I did was build BitTorrent into a couple projects when it probably didn’t need to be there. Another example is building “tagging” or some other Web 2.0 functionality. Why are you building it? Is it really better for the customer? Or is it just something “cool” you wanted to add in? When you let the product and the technology drive the experience over what the user wants, then you are really shooting yourself in the foot.

Are you forcing things that don’t go-with-the-flow for users?
Another common thing that happens is, you want to develop feature X because it’s cool, but maybe it makes your user experience less convenient. “Oh, what the hell,” you say. This is bad. So if you are building a client that needs to be downloaded, rather than putting things in the browser, that’s bad. Or if you are doing something like tagging when simple categorization will suffice, that’s bad too. Remember that eBay got to many many billions of dollars on a stupid categorization scheme, and Yahoo did too.

Are you building a fashion website but you’re a poorly-dressed nerd?
I am, and personally know, lots of nerds building shopping sites for women. Even TechCrunch has an article about it. If you’re building a website for a completely different audience than you, then you need to understand you’re going into uncharted territory. Are you talking to your target market every day? Ideally one of your co-founders is a girl/old-guy/teenager/Mormon for your girl/old-guy/teenger/Mormon social-networking website? Because if not, you are forcing an entire world of assumptions into their world. This is very hard, and I’m glad I tried to do it, because it didn’t go so well and I learned a lot about how the world works

Notes on product and business model questions

6. What is the “core mechanic” (or minimum feature set) of your product?

7. What factors can kill your business model?

8. How do you acquire users? Can you make an existence proof?

9. How do you make money? Can you make an existence proof?

10. What technology do you depend on? Can you prove it can work?

These questions really kill me, because even if you get the user stuff vaguely right, you can still fumble things by getting too structured when developing your product. I think these questions are all about being “lazy” to the extent that you build whatever is the simplest thing that could possible work, and you try it out. Then rinse and repeat.

What’s the stupidest, smallest incarnation of your product?

Everyone knows eBay, which is a big complicated beast with lots of auction models, specialized categories, metadata, attributes, etc. But before you try and build that, what is the “core mechanic” of eBay? You could argue that it’s really just a test of whether or not people want to put product listings in a forum. You might even argue that the auction piece of it is extra, which Craigslist pretty much proves.

So take your product, remove the user authentication (use e-mail or something else instead), remove the fancy tagging and extended profiles, take it all out. What’s the thing that people spend 99% of the site doing? On MySpace, it’s messaging and browsing profiles. On YouTube, it’s viewing a video. On World of Warcraft, it’s walking around and clicking on things. Once you get the 5 minute “loop” of the core mechanic right, then extend it out with all the fancy stuff. But if you focus on the profiles, tagging, social networking, and other fancy features, and then have a crappy core mechanic, you’re screwed.

In fact, a rule of thumb should be that you can prototype the core mechanic within a week or two at MOST. Most people think in months, but you should think in days.

Where do your users live? Can you get a couple of them to fill out a form?

One other issue I wanted to touch on is the tactics of reaching out to users. I think nerdy, product-centric people like me typically focus on the technology and not on the people, which is a huge mistake. There are lots of ways to make sure you can tap a willing-and-able audience for your site. Here are two variations…

First, there’s the beta-signup page. Make one up that articulates the offer, and asks them to put in an e-mail address to get announcements when the site is done. Maybe put in a text field that asks them why they are excited. This will take you an incredibly short amount of time. Now go get some traffic from your site - from blogs, forums, Google Adwords, etc. Track your conversion rates, so that you know how many people are actually interested. Theoretically, if your site is awesome, people will want to sign up, and they might even forward the URL to their friends too! But, if your conversions suck and the people fill out weird things, you’ll have learned something.

Another option is just to hook up a SurveyMonkey landing page to Google, and ask your users a bunch of random questions. Do they want to upload videos of them dancing? Do you have a webcam? Do you spend money on shoes online? (Or whatever) This is NOT a replacement for qualitative interviews with your user market, but you can learn a thing or two. You can verify a couple assumptions around issues like, how much of the MySpace crowd has a webcam to shoot  videos? This can be life and death for your little project.

Go collect those startup scars

I’m just pontificating off of random scars I’ve picked up from starting projects, and I’m sure very smart, intelligent people have had different experiences. The most important part is to start trying, as often as you can, and learn your own set of heuristics at evaluating these situations. A couple have really stuck with me because of my product/technology-bent, but if empathizing with customers is your thing, you’ll learn a whole set of other interesting things about the product side.

from:
http://andrewchen.typepad.com/andrew_chens_blog/2007/05/how_to_fool_vcs.html
http://andrewchen.typepad.com/andrew_chens_blog/2007/05/how_to_fool_vcs_1.html
http://andrewchen.typepad.com/andrew_chens_blog/2007/05/how_to_fool_vcs_2.html
http://andrewchen.typepad.com/andrew_chens_blog/2007/06/how_to_fool_vcs.html

How to fool VCs into thinking you have traction, Part 1

In the Web 2.0 world, people love to quote user numbers, whether they are 50k or 50 million. These numbers are incredibly valuable, as they drive press buzz and even venture capital valuations!

Web statistics are often meaningless
At Revenue Science, a company that taught me everything I know about advertising and much more, I helped strike a deal with Nielsen which got me a bunch of deep understanding about measurement on the web. The truth of it is, there are deep nuances in the way that people use and quote statistics on the web, particularly when it comes to issues like “unique users” and “pageviews” and “sessions,” which are terms without standard definitions. I recently wrote about Alexa, which goes into some of these issues, which you can read: Are you misusing Alexa numbers? (probably)

Lies, damned lies, and web statistics
In the current Web 2.0 market, you can pretty much say the following:

User Traction = $$$

I guarantee that if you have 100k users, are showing some growth, you can raise venture money right now.  And in fact, your page stats will serve as the “comp” to value your company. Thus, it becomes very important to understand how to represent your site’s statistics - failing to do so will cost you real money.

Future blogs on this topic
Just off of a quick brainstorm, I have a couple ideas for what I want to write about. They are included at the end of this blog. In analyzing each technique, I’ll try to answer the following questions:

1. How does this technique help you bend the rules?
2. What should the stats really be?
3. How do you ask the right questions to see past the distortion?

I will write about the following techniques:

• Widget pageviews versus destination site pageviews
• Automatic page refreshing
• “Standards” and metrics like date ranges
• Counting hits versus pageviews versus ad impressions
• Search engine marketing
• SEO and page proliferation
• TechCrunch and other one-time traffic spikes

I’ll write the first one before Monday.

Shoot me a note at voodoo [at] gmail [dot] com if you think I’m missing any interesting techniques, or if you have questions or comments.

How to fool VCs into thinking you have traction, Part 2

In my last blog, I argued that that web stats are often meaningless, and can be used to fool people (in particular VCs) into thinking that you have traction when you really don’t.

In this first blog, I’m going to talk about Widget pageviews versus destination site pageviews.

Here’s what you say
When people ask you what kind of traction you have, this is what you say:

“Last month, we got 30 million pageviews and 5 million unique users.”

These are great numbers! You can then show them a graph that looks like a hockey stick, and have people multiplying CPMs by the pageviews to get big revenue numbers.

The reason why this argument is so incredibly compelling is that it’s easy to think that big numbers equals big traction. Between that and showing them a hockey stick graph, it’s easy to get seduced into thinking you have a huge company right away.

What’s weird with these stats?
Although these numbers can look great on paper, they represent a potential landmine for people who aren’t doing their math.

What’s misleading?
Ultimately, a widget pageview is not the same as a pageview on your site.

When you tell someone that you have 30 million pageviews on your site, it’s valuable for a number of reasons:

• It shows that users are engaged with your property
• You own real estate on your property where you can place ads
• Normal “comps” to calculate value, like multiplying against a CPM or calculating a $/user value, all sounds great

The problem is that for a widget site, you have the opposite reaction:

• Users may not be engaged with YOUR property, they are engaged with MySpace’s
• You don’t own any real estate to place ads - and if you did, they might cut you off
• You can’t multiple the pageview numbers by standard revenue multiples, since the pageviews and users may not really be yours in the first place

That sucks! That means that the % of users that exist in widget form may never be monetized - or if it is, it will be at a substantial discount to your CPMs. For more on widgets ad impressions, I wrote a previous blog on the topic called “Widgets = Ad Networks”.

How do you figure out the truth?
To avoid being seduced by the huge numbers, just ask the simple question:

How much of the 30 million in traffic comes from widget pageviews versus pageviews on your destination site?

If you get them to answer that breakdown, then you can ask a couple follow-on questions to show that you get how widgets fit into their marketing strategy:

• How well are you retaining users on your destination site? How often are they coming back?
• Where are the widgets placed? Are you concentrated on one partner? (uh oh!)
• How much of your destination site traffic comes through links on your widget?
• What happens if your widgets all go away? Does your destination site still survive?
• What are the CPMs on your destination site?
• Do you have ads on your widget? If not, do you plan to? How will the underlying platform respond to you monetizing their traffic?

Ask these questions, and you’ll figure out how dependent they are on their potentially hostile partners. Furthermore, you’ll figure out a bunch on how smart they are about “quality of traffic” and the difference in monetization rates between their destination sites and their widget business.

Conclusion
Overall, this is a very effective way to fool people into thinking you have a lot more traction than you really have. A lot of social networking sites have between 50-150 pageviews PER SESSION. If you can pass these pageviews off as your own, you are probably going to inflate your valuation by 3-5x. Pretty sweet.

How to fool VCs into thinking you have traction, Part 3

This is the 3rd article in a multi-part blog. Here are quick links to Part 1 and Part 2.

Today, we’re going to talk about using automatic page refreshing and other navigational tools to generate extra pageviews for every user, whether or not they are really using the site.

Here’s what you say
When people ask you for what kind of traction you have, this is what you say:

“Last month, we got 30 million pageviews - and wow were people engaged. We had an average of 40 pages per session!”

These are great numbers, particularly the engagement factor of many pageviews in the session. These are the kind of stats VCs are looking for when they think about the scarcity of attention. This is particularly true when you show them the hockey stick that’s driven by all these sticky pageviews.

If you need an example of why VCs value stickiness, just check out the excellent blog from First Round Capital on the subject, called “Catch and Release Business Models”. Basically, their view is that more pageviews per session is a proxy for more passionate users, which means more viral, and better growth, etc.

What’s weird with these stats?
Of course, these stats could look great on paper, but in fact they be caused by a number of negative factors which have been documented in the past, particularly two:

1. Inefficiently designed navigation that causes pageviews
   (See the MySpace analysis, called “The Click Factory”)
2. Automatic page refreshes which generate garbage pageviews
   (See the analysis on Drudge report in Valleywag)

In both of these cases, users are NOT more engaged, yet generate garbage pageviews that are hard or impossible to monetize. So while a simplistic analysis would just multiple the 30 million pageviews by a comparable CPM, the smart money would figure out how sticky or wasteful the pageviews are, and discount it accordingly.

The second problem of automatic page refreshes is a particular problem for news sites, where it’s gray-line justifiable. Oftentimes, this encourages people to stretch it a little further than they need.

On the flip-side, of course, this is the hidden downside of heavily AJAX-y sites that do everything very efficiently. Realize that early on in the process, a site like that might be decreasing their overall pageviews by close to 50%. That’ll generate a huge hit to the startup’s valuation. It’s advantageous for everyone to be educated on this topic, and the pluses and minuses.

How do you figure out the truth?
To understand if these numbers are being inflated, you really have to break down the source of the pageviews on the site. You should ask:

“When users come to your site and expend 40 pages per session, break down what is happening on the 40 pages. What pages are spent on the automatically refreshing news page, versus commenting, versus other activities on the site?”

You typically want to make sure you are separating engagement from the stickiness of the site. Some of this stuff cannot be faked. For example, here are questions that go directly to stickiness:

• How many users come back every day? Every 2 days? Every week? Every month?
• How long do you retain users over time?
• What percentage of your registered userbase is active?
• How many friends do most people have? How many articles do your users forward on?

If you ask these questions, you’ll get much more information on how people use the site, rather than relying on a simple metric like pageviews/session. You’ll also get a good understanding of how well they can interpret past their metrics into the behavior of the users, and why the users are acting different ways.

Onwards…
In my next article, I’ll be covering how people fiddle around with the definitions and standards around pageviews, uniques, and other numbers to inflate their numbers. Stay tuned!

How to fool VCs into thinking you have traction, Part 4

OK Go with point #3
Finally, here’s point 3 of a multi-post series on the question, “How can you fool VCs into thinking you have traction?” Here are links to older posts:

• Introduction
• Widget pageviews versus destination site pageviews
• Automatic page refreshing
• “Standards” and metrics like date ranges
• Counting hits versus pageviews versus ad impressions
• Search engine marketing
• SEO and page proliferation
• TechCrunch and other one-time traffic spikes

“Standards” and metrics like date ranges
Today, we’re going to talk about manipulating standards and metrics - in fact, let me roll in hits versus pageviews and ad impressions, since it’s all part of a similar issue. Basically this sleight of hand has to do with the fact that people treat $0.99 as much cheaper than $1 when they are both only a cent off. So if you pick the right metrics to measure yourself by, you can get a big boost in credibility.

Here’s what you say
When someone asks you what kind of traction you’re seeing, say something like this:

“Since we started public beta, we’ve served over 300 million ad impressions on the site”

I also love “peak” numbers or “run rate” info:

“We currently have a peak run-rate of 240 million pageviews”

This sounds great right? It’s actually more complicated than that.

What’s weird with these stats?
Even though they are a bunch of equivalent numbers, people really perceive the bigger numbers a lot differently than the smaller ones.

What’s misleading?
People don’t have a good sense of the ratios to translate between these numbers - some numbers sound bigger than they really are!

What’s a typical set of ratios? Every site is different, but these would all be reasonable:

• 1 registered user = 10 unique users
• 1 user = 10 pageviews
• 1 pageview = 2 ad impressions
• 1 pageview = 10 hits (or transactions)
• 1 dollar = 1000 ad impressions

What this means is that rather than giving a number like 500k registered users, you could in fact give a number closer to 500k x 10 x 10 x 2 = 100 million pageviews. And if your site is growing 20% a month, growing 500k users 20% a month is a lot less impressive sounding than 100 million pageviews growing 20% a month.

Even worse is giving someone a dollar amount for your advertising. 100 million pageviews doesn’t sound so great when it’s monetizing at $1 CPM or less.

Another way to compound this is by giving big numbers based on non-fixed time intervals. For example:

• “We’re hitting a run-rate of 100 million pageviews”
• “Our peak run-rate is 200 million pageviews”

This also includes what I wrote about earlier with “Since we did X, we got Y.” It’s very confusing what these numbers entail. If you wanted a great peak run-rate number, just take the HIGHEST number of pageviews you’ve ever had in ANY time interval - let’s say the 10 minutes right after you get a Techcrunch spike, and multiply that out to a month. You’d get a ridiculous number.

How do you figure out the truth?
It’s hard to figure this stuff out, but ultimately you want to heavily bound the problem. Rather than waiting for them to spit out a crazy metric, instead you should ask a very specific question:

“In the last month, what did your analytics tell you in terms of # of pageviews to the site?”

Asking a question like that, and not accepting a cryptic number, will give you the best chance at understanding what’s really happening on their site.

Ideally, you want to be able to open up their metrics and understand:

• How long is the average session length?
• How many unique users come to the site per month?
• How many pageviews did the site receive?
• How many ads are on each site?
• What’s the average CPM of the site?

The trick, of course, is understanding what typical metrics might look like for each of these.

The best case scenario is when you’re doing something a little weird and not a typical consumer internet site. For example, if you have a publisher ad network, you’d roll up a bunch of stats from sites you really don’t own or control. Or just disclose certain stats (like peak stats) but not the rest.

from:
http://www.briannorgard.com/?p=17

Focus as a Core Competency

Entrepreneurs by nature are inquisitive animals. They like to tinker. They like to dream. They like to explore.

The problem is, all of that passion can sometimes cause a lack of focus. How many entrepreneurs do you know have 2-3 half finished projects (I am one of them)?

Speaking with a friend the other night, I was pointed to this quote from Nick Peters:

Don’t scatter your resources among many mediocre ideas. Instead focus on one great idea and do it well. This will put you at a competitive advantage.

This got me thinking. Usually core competencies are relegated to some specific business or technical niche. However, a maniacal sense of focus is a competitive advantage unto itself. Going into hiding and focusing on nothing but the task at hand is often the difference between success and failure. The top entrepreneurs that I know have an amazing ability to tune out the noise.

Stop reading TechCrunch and the WSJ for 3 weeks and focus. See what happens.

from:
http://www.briannorgard.com/?p=49

Pitching 101

from:
http://www.briannorgard.com/?p=72

Venture Rules from Kleiner Perkins

I’ll admit, I am all too fascinated with Tom Perkin’s new boat. The interview he did on 60 minutes reinforced the fact that this machine is more than just a boat–it’s a work of art.

Of course, I grabbed his new book, Mine’s Bigger and happened upon a few of Kleiner’s famous laws of venture capital:

• When the money’s available, take it
• When they pass the hors d’oeuvres around, take two
• There is time when panic is the correct response
• Never sell unless there are two buyers
• If a decision is incredibly difficult, it doesn’t matter what you decide
• Make sure the dog wants to eat the dog food
• Market risk is inversely proportional to technical risk

December 22, 2007

From Jeffrey Pfeffer’s book, The Human Equation:

“You can’t be normal and expect abnormal returns.”

from:
http://andrewchen.typepad.com/andrew_chens_blog/2007/03/how_do_you_find.html
http://andrewchen.typepad.com/andrew_chens_blog/2007/04/how_do_you_find.html
How do you find a badass co-founder?

Finding a co-founder is damn hard
In the last couple months, I’ve been keeping an open eye out on finding a high-quality co-founder for the startup I’m doing as part of my EIR gig. Ultimately, the scarcest commodity in the entrepreneurial community is NOT venture capital money - there are billions out there - but rather very high quality people. In particular, the highest quality people out there turn into co-founders, so that’s incredibly important.

In particular, a co-founder’s able to help balance you out, especially on mood. So if you are both in a room, the startup is on the rocks, and you say, “god we’re fucked!” then sometimes your co-founder will say, “well, why don’t we do X.” The same will happen vice-versa, which is great.

How many co-founders?
2-3 founders maximum. I think once you get beyond that, you’re diluting the group of talent in place. Ultimately, there’s a huge distinction between founders and employees, and you have to choose carefully. Beyond 3, the equity structure gets messed up too - you take a round or two of VC money and you own a very small piece of the company.

Of course there are exceptions like VMWare, which had 6 co-founders that all did well. But the norm seems closer to 2-3.

What defines a good co-founder?
Short answer is, I have no idea

Long answer is, I’ve done a lot of talking and thinking about the issue, and I think I know what is good for me (and maybe me only). Ultimately, you are looking for a guy with the following:

Complimentary in skills, but from the same cloth in attitude and culture

On the skills front, because I’m more of a business-y person, I’m looking for someone who is very technical. Also, because I’m more of an unstructured creative thinker, it might be useful to meet someone who is more structured and detail-oriented. A big piece of this is also a Mr. Inside versus Mr. Outside designation. Who’s in charge of talking to customers, partners, and potential investors? That might be one guy, whereas the other is more focused on internal operations. This might hold true even as the company scales up.

The other side, which is about attitude and values, is much more difficult. If you are looking to found a company, and you have an idea that you’re driving, that says a lot of things about you already. You’re probably driven, have a vision for where you want things to go, and are self-motivated enough to get things off the ground. You may also be someone who can convince people to follow you, or give you money, or whatever.

My questions for values/culture
For me, I’ve been thinking about a series of questions related to culture and values. Here are a selection of them:

• Let’s say you wanted to start a new company? How would you do that?
• Tell me about a major disagreement you had recently - describe what happened?
• How would you approach hiring people?
• What’s your long-term goal with your career? Where do you want to be in 20 yrs?

… and etc. Lots of questions you’d ask an employee, of course.

I think you’d also ask a couple questions as you observe the guy:

• If you put them in a room with 5 peers, would they emerge with the 5 guys signed up to follow them?
• Would you feel comfortable introducing them to everyone you know?
• If you say something they disagree with, how long does it take before they push back? How hard do they push back?
• If you guys disagree on their side of the complimentary skills, what happens? What happens if it’s on your side of the domain expertise?

Peoples’ views on this are going to be different, but in general I’m going to be looking for the guy who can sign up the 5 guys in a room, who’s great to introduce to everyone at all levels, who pushes back hard and immediately, and doesn’t care if its on your side of the skillset or theirs. I think all of these things define a strong leader who’s a peer, rather than an employee.

I’ll write more on this topic later, as it’s a critical one, but would appreciate comments in the meantime.

How do you find a badass co-founder, Part 2

I had previously written about How do you find a badass co-founder? If you haven’t read the article, or don’t remember at all, I encourage you to back up and spend 5 minutes to read it.

Today, I wanted to extend those comments further, now that I’ve put in more thought to the subject.

So I want to return my description before of a good co-founder:

Complimentary in skills, but cut from the same cloth in attitude and culture

Now interestingly enough, this sort of assumes that YOU are a good founder. In fact, you may not be, and when I define it in a relative way like above, it doesn’t mean much. So let’s return to some of the same factors that make people good founders.

The minimum bar for anybody
In general, there are a couple things I look for within people, regardless of whether or not they are technical or business-y or whatever. Here’s a quick list of attributes:

• Super smart
• Hungry and scrappy (cheap!!!)
• Honest and direct (no passive aggressive people allowed)
• Doesn’t want to be famous (this creates incentive misalignment)
• Assertive and is a natural leader

If you don’t have these in spades, I’m generally uninterested. Obviously these are completely arbitrary, and you’ll want to come up with your own list, but these are some of my prioritizations.

Founders versus executives
Ultimately, there’s a central conflict of what you want out of a founder, whether they are business-y or technical in nature. In general, you want people who are great at execution early on, and who are very hands on with their business. These are great entrepreneurs. The problem is that as time goes on, even when you start raising money, you start to need a different skillset. Usually these skills are more soft skills, and people-oriented in nature. Some folks suck at this, and can’t scale. Here’s what you want in a technical person, when you first start out:

Super hacker

• Really scrappy, fast coder
• Super smart
• Only needs pizza and coke to survive

But at the same time, as the company grows, then you need the same person to grow up into something else:

CTO

• Really scrappy leader of people
• Super smart, and also super communicative
• Only needs pizza and coke to survive

It may be clear to some people that these skillsets often are inversely correlated. Oftentimes, the failure to evolve one skillset into the other leads to founders getting shuffled aside. The truth of it is, as the company grows (even to a state where VCs need to be pitched), people skills become very important, and being assertive and having leadership becomes very important.

What about the business guys?
I’m not letting the business folks off the hook either. Early on, having business guys are very awkward IMHO. You don’t really need Sales or Finance functions, since the early focus is on Marketing and Product. Thus, you’re looking for someone early on who can be a product jack-of-all-trades:

Super product guy

• Defines product, market, and customers
• Jack-all-trades on finance/legal/incorporation and other random bits
• Great at outbound work (customers/investors/etc)
• Might throw in some time on product design and code
• Great at selling ice to Eskimos

Another way to say this is that early on, the job of the business guy is to support the technical guy and help him figure out what to build. Anything other than that is often superfluous. But after a while, you need something else:

CEO

• Leads through company vision
• Puts together team of great executives
• Great at outbound work (customers/investors/etc)
• Hands over all product to product teams
• Great at selling ice to Eskimos

This is also very hard for the early startup CEO, because they are often the initial product manager while the company is a one-product (or in fact, one-feature) company. But once you get past that point, the power becomes much more indirect, and it’s very hard for some people to let go.

Is he Mr. Right? or Mr. Right now?
It’s often very very tempting to just gather your friends and have a bunch of people have at it. The problem is, you end up with one or two strong people, followed by a hanger-on. That’s not what you want.

That’s not to say that working with friends is a bad idea - in fact, you really want someone you can trust, but make sure the skills are there too.

Instead of trying to finding someone who just happens to code well, but could never scale, I think it behooves any strong founder to look at the team they’re building around them and ask, is this a A team, or am I putting together a B or C team just because that’s all I have access to? And if it’s the latter, it probably makes sense to reset, go meet a bunch of people, and start over. Remember:

Giving an incompetent friend/acquaintance 50% of the company and then working them out later is NOT an option.

Questions to ask
So when you’re evaluating your co-founder, I’d ask the following questions of yourself:

• Who are your other choices? (If none, go find some)
• Given a list of X people, where do they sit in terms of skill level? (Hopefully at the top)
• Where are the holes in their skills? (Hopefully they are well-understood)
• How well will they scale as the company gets bigger?
• Would you trust them with direct reports? Would you trust them as CEO?
• Who’s someone you want to impress? Would you let them do a 1:1 with your co-founder?
• Could you imagine reporting to them?

I’d ask these questions carefully, and figure out if they make sense for the people you’re selecting.

Next time, I’ll expand more on the topic of interviewing potential co-founders, and/or add some specifics on where to meet these guys (if you haven’t already).

from:
http://andrewchen.typepad.com/andrew_chens_blog/2007/02/how_to_meet_peo.html

10 tips for meeting people at industry events

As someone who’s brand new to Silicon Valley, one of the most important, yet difficult, things to do is to meet new people. The best ways to meet people in the Bay Area is to have grown up here, gone to Stanford or Berkeley, to work at a company or in role where you meet lots of new people, or any combination thereof. For me, unfortunately, I don’t have any of these. All I have are industry events and conferences.

Conferences are a real pain in the ass - there’s a ton of people, it’s loud, and it can be intimidating. It’s particularly hard if you don’t feel like you belong - either you’re trying to break into an insular crowd, or you’re just starting to learn about an industry.

Here are some tips I’ve learned from going to half a dozen such events in the last couple weeks:

1. Use the time before the conference wisely
The hardest thing in the world is when you don’t know anyone at a conference and you’re expected to fit right in. If you can, use the time before the conference to ask people you’ve met whether or not they’re going to go. If so, that’s great! You can tag along with them and they can introduce you to a couple people.

Another option is to e-mail people that are working at the event, and let them know that you’re new. If they’re nice people, when you see them at the event, they’ll introduce you to a couple people. Either of these options should result in 2 or 3 introductions at the very minimum.

One incredibly important way to use pre-event time is to create a little sound bite about yourself. When you say, “Hi, I’m Joe” you want to be able to follow up with a 30 second, 60 second, or 2 minute blurb about yourself and your interests, depending on the context and interest. You may want to make it a little punchier than usual, and get to the salient points quickly. You need to help other people size you up and fit you into their universe as fast as possible.

2. Arrive early, and get some 1:1 time
When there’s lots of people, and circles of 4 or 5 people that all know each other form, it’s tough to break in. The best time to meet people is when there isn’t much competition, and you can have a quick conversation to introduce yourself. So show up early, find someone who looks bored (checking their phone or whatever), and introduce yourself. That way, you’ll have a tiny bit of familiarity that you can reuse later on in the event.

Another good thing to do, if you show up early, is to catch a couple minutes with the speakers, organizers, or panelists. They’re often milling around, waiting for something to happen, and you have a chance to speak to some of the more well-informed and well-connected people there.

3. Sit next to interesting people, and introduce yourself
There are several bad places to sit during a conference. One is at the very front, where people get intimidated by the speakers, so that the seats are usually empty. Instead, do yourself a favor - sit in the middle of one of the rows, and introduce yourself to the people to the left of you or to the right of you, as the event starts. This is another example of the easier 1:1 interactions that happen because of your captive audience.

Sitting next to people who aren’t interesting, or don’t want to talk? That’s easy, just go to a different seat. If you’d rather be polite, just excuse yourself to go to the bathroom and then come back to sit in a different area. The best part of multi-session conferences is that you can constantly mix with different crowds as you enter and leave the rooms.

4. Break into circles of people
By far, the hardest part of a conference is during the “official” mixers. Oftentimes, you have groups of people who are all friends form, and they talk to each other intensely. If they are nice, they’ll welcome new people in, introduce themselves, and help you join a conversation. Oftentimes, they’ll be so engrossed in a inside baseball sort of conversation that it’s hard to break into a circle and start talking.

The best way to resolve this is to look for easy circles to join. This can be made up of people you’ve met earlier in the conference, so you can catch up and ask them how they’re enjoying things. Another option is 1 or 2 people loitering at the edges, who aren’t part of the action. You can make your own circle that way. Another is to watch for groups that have huge holes, with people standing in a U shaped pattern. You can jump in and fill the circle, and try and jump into the conversation.

How do you jump into a conversation? A question is usually a good start, or an observation if they are talking to something accessible. That way, you can shift some attention towards you, and start participating rather than being a bystander.

That said, if you join a circle, don’t understand anything they’re saying, feel free to jump in and out - don’t feel bad about leaving the group and finding another one that’s more approachable.

5. Invite people to talk to you
Once you’re in a circle, you should make sure to invite people to talk to you. So make a hole for people to come join you, if you can, by standing somewhat perpendicular to the other people. And if people come by and stand there, stop the conversation and introduce yourself. That way it’ll be easy for people to join the conversation, rather than feeling excluded.

6. Bring business cards, and ask for business cards
People go to industry events to meet people, period. So bring your business cards, and do the “card blast” when appropriate. And ask for peoples’ cards after you talk to them for a couple minutes. Don’t be bashful, that’s what these industry events are about. And remember to bring enough cards based on the context of the conference. For a 2 day conference, you’ll want to bring a fistful, rather than a 5 or 6, like you might usually do. Sometimes it might make sense to keep a bunch in your car, or your bag, so you can refill if necessary.

On the other hand, asking for business cards is helpful too, but only if you remember who the people are. If you just grab random ones, it’s a waste of time - instead, focus on having quality, interesting conversations with people, so that it’s memorable enough to associate with a card.

7. After the conference is as important as event itself
After you leave the conference, you’ll often have a bunch of business cards and maybe even a member directory of all the people that attended. Remember to follow up there! Send an e-mail, summarize a point or two in the conversation you had - hopefully a memorable one - and ask for whatever followup is appropriate. That might be a phone call, or a coffee, or just a “let’s keep in touch.” Put them into LinkedIn, or your address book, so that you keep some record of it. LinkedIn is great because it also helps you remember a particular person’s professional relevance to you - otherwise, use Outlook’s address book to annotate comments or notes so you won’t forget months down the line.

8. Learn to spot VIPs
One fun trick is to learn how to spot the VIPs at a conference. Oftentimes, this is very hard because they look like all the other conference goers. But there are ways to tell - first off, they may know the speaker well. So if the speaker is having a 1:1 conversation with random dude X, maybe you want to talk to random dude X to figure out what he’s about - he’s probably a friend or affiliated with the speaker, which is always great.

Small social cues are great to pick up and learn as well - at the airport, the guy in the track suit, blackberry, and small bag is often a senior executive who’s learned how to optimize for travel, whereas a young guy who’s overpacked is a complete corporate newbie. Learning small cues like that can be important.

9. Don’t overdo the conference circuit
Going to events and conferences are nice, but remember that at the end of the day, DOING is more important than NETWORKING. Other than the speakers, the most senior folks are generally not at conferences - they are busy doing things, and they can usually talk to whoever they want. So in general, industry events are usually populated by newbies and marginally senior folks - it’s an alliance of people who aren’t quite senior enough to skip the networking thing altogether.

So the important part is to do enough interesting things outside of conferences, and realize that networking is an investment of time - you still need to turn that potential energy into kinetic energy.

10. And finally, have fun! It’ll get easier, I promise
The first couple times going to conferences and forcing yourself into awkward social situations often isn’t fun. But it gets a lot more fun once you meet a couple people, find yourself talking to the same folks, and generally insinuating yourself into the club. It’s a great experience to meet super smart people, and very rewarding.