3 Simple Truths about Fund Raising Game for Desperate Startups

Eric Schmidt’s Tomorrow Ventures apart from beautiful wooden tables*, have a peculiar cabinet with even more peculiar board game. Monopoly for fund-raising startups.

It’s a prank and a mindful suggestion at the same time. Raising funds is a game. Game with high bets, lots of stress and important lesson to be learnt every couple of turns. Better learn those lessons. That’s your only certain prize in the game.

I want to think that, all in all, it’s more of a strategic game than a random play where you need to bet on your luck. Can’t be sure though. This game is a living thing, transforming itself all the time.

Is there anything universal that you can learn from others? I sincerely hope that 3 Simple Truths below are universal:

1. You’re learning rules of the game while you play

Rules of the game are case dependent. What works for me could never work for you. There’s not an ideal pitch, investor deck, or a scenario of a meeting with investor. Don’t believe in codes of conduct on Quora. You’ll learn rules while you start playing. Open your mind, eyes, ears and iterate.

2. Master contradiction: being flexible & being consistent

Let me put it straight: you know the most about your business, not investors. If every VC that you encounter knows better what you should or shouldn’t do - you’re doing it all wrong.

The best VCs are amazingly experienced people. They can help you polish your business, get rid of rough edges and move it to the next level. But they won’t do the job for you. Learn from them but let them also learn something from you. Consider their ideas, constantly think about your strategy (try to criticize it on your own!), but don’t nod all the time. I bet it doesn’t improve your chances of getting any money.

3. Never be desperate

Never fund-raise to fund-raise. That’s not the goal of the game. If you think that’s it, you got it all wrong again. You don’t want to be desperate about grabbing couple of checks, you want to be desperate about solving problems of your customers and growing your business till the moment when people will use the name of your company as a freakin’ verb (‘to uxpin’ as a synonym of ‘to design’ that would be a good start).

Fund raising supposed to improve your odds on the way to success. It won’t do the job for you.

Good luck!

* There are just two VCs in the Valley that can compete with TV when it comes to office design. Post your guesses in comments.

ps. additional 4th truth: bad ass hard rock & metal really helps to get through this annoying chapter of your entrepreneurial life. 

(Photo Credit: GSAndré via Compfight cc)

How I Pitched Dave McClure In The Wrong Place At The Wrong Time

Silicon Valley - Where People Regained Their Lost Humanity

“You have a friend next door, let me know if you need anything” - said Michael at the end of charming evening. Beer, wine and a conversation about the Valley, US in general, work, movies…

Who’s Michael? Michael is our next door neighbor in San Mateo. When we moved in, he left us a note on our door and we’ve invited him to come over and spend an evening with us.

That’s something very typical for the Valley and, probably, would be considered rather strange in Eastern Europe (or at least it never happened to me, nor my friends).

This inner, almost tribal, closeness of people is the very nature of Silicon Valley. People want to spend time together, know each other and build meaningful relationships. They well understand that you are as powerful as your friends. Or in other words - your chance to succeed is determined by the quality and size of your network.

And it doesn’t mean that this is a cynical game and people are trying to use each other. There’s something much more fundamental here. It’s a mixture of karmic believes and perfectly rational, common sense.

Helping others creates a culture of openness and honesty that’s beneficial to all the people around. All in all, the good will come back to all of us.

At the very heart of the innovative world, people are reaching down to their nature and are regaining their lost humanity.

It’s not a coincidence that Bay Area is among the most liberal and most successful places on Earth. It all makes perfect sense.

ps. Just to make things clear - we’re staying here till mid June (and who knows what future will bring) - talking to investors about accelerating UXPin and relocating legally company to US. 

"

…Facebook has made a cottage industry out of chasing hot Internet services (Pinterest and Yelp included), instead of developing new ideas to delight its billion users. Similarly, Twitter’s product strategy feels wholly defensive. Its most notable new feature is photo filters, a plainly unoriginal addition.

Both companies have turned their focus away from users and toward shareholders to get bigger, not better. Revenue is great, but not at the expense of the product.

"

/Fast Company, March, 50 Most Innovative Companies

Launch Festival - No thanks.

Launch Festival is one of the most renown startup conferences in the entire world. 5k of entrepreneurs and investors meet every year in San Francisco to spend time together, hold hands, exchange millions of dollars, share knowledge and occasionally have a meaningless small talk as a short break from ground-breaking business conversations.

Well… at least this is the impression you could get from browsing carefully Launch Festival website. No wonder hundreds of startups paid $1k each, to actively participate in this revolutionary event.

Sadly, these hundreds of great companies (really amazing people and great products!) spent three days talking to each other and hunting for people with purple badges (signs of VIP) in despair.

All efforts were rather futile. As I’ve learnt from one of my friends (Launch 2012 “alumni”) - it’s not easy to have an actual conversation with investors on the conference. He told me in secret, that they are all sitting in the VIP section and are not going to walk through the venue, as they can order coffee via iPhone App. “Last year was easier… they needed to leave VIP room to get some coffee at the venue” - he revealed and I started to get paranoid atmosphere of Launch desperation and humiliation.

Finally, due to connections of my my investor (LP at 500.co) I had a chance to pitch in front of Dave McClure. He wasn’t amused and the experience was uncomparable to pitching him one year before when we all had a nice time at Sushi place in Mountain View. I wondered what happened and than I saw his tweet: 

“sorry state of affairs: only place 2 get away from 24x7 pitches is taking a dump.#WhoDoesNumber2Work4?#TMI #Launch2013”

Damn. Than I got it. Hundreds of companies were trying to pitch all the investors around, because they felt they paid $1k for that, while investors tired of constant pitching, were hiding at the VIP section to finally relax.

And this is Ladies and Gentlemen - purely wrong. If you’re fund rising, or just wish to get some feedback from experienced people - Launch Festival is not the right place (even if they claim they are). You want to get to know people, appreciate their presence, build a meaningful relation - not interrupt them on their way to the restroom. That can rather harm your company than help you succeed.

If you just want to hang out with other entrepreneurs (I met amazing people!), practice your pitch by doing it every 2 minutes in front of other entrepreneurs (great exercise!) - Launch might be a good, though rather expensive, option.

And as a general rule - don’t rely on conferences (some of my friends had the same experience on TechCrunch Disrupt). There are other, less humiliating, options to make your company matters.

Dehumanizing Nature of European Entrepreneurship

Photo Credit: Marthax Licence: Creative Commons

Sitting in a hammock just near the pool in the famous Blackbox Startup Mansion I’m thinking about the big difference between european entrepreneurs and people of the Valley.

In general terms we’re all the same. We’re trying to solve problems, create companies, escape the boredom, have an adventure. The difference though can be noticed almost immediately. 

Entrepreneurs from the Silicon Valley seems to be healthy, good, human beings, while we, european, entrepreneurs are more like sad, neurotic, robots. 

And while I have nothing against robot (not huge fan of Android, but I still value highly C3PO), in the last couple of months I could feel on my own skin how dehumanizing european model of entrepreneurship can be. Chasing metrics and revenue growth, taking care of employees, kept my mind busy with worries. Taking care of my close-ones and myself, was unfortunately far on my To Do list. It ended up with my hand surgery from work-overload and strange moments of silence during occasional beer with friends and dinners with family. I thought I’m paying the price of UXPin success, while now I know that I was hurting all the parties. My family, my friends, my company and myself.

And I’m not saying that europeans work harder than local entrepreneurs. That’s certainly not the case. What I mean is that people in the Valley maintain healthy connection between their business, passion and self-development. Having a startup here is almost a religious experience of becoming better person. They’re growing together with their companies. While companies become richer and more important, they’re becoming better people - outgrowing their mental obstacles.

As a psychologist I can clearly see who’s right with their approach. 

Think big, think positive, be a good human being, stop being an android - that’s the lesson that I’m taking in the Silicon Valley.

Accelerating Success

I’m back in the Valley. Third time in the last 12 months. This time for couple of months with serious plans for rapid growth, rising funds and creating INC entity in the US.

The journey starts in famous Blackbox Startup Mansion. Just like in March last year with the exception that we’re participating in Blackbox Connect program. Absolutely amazing experience. We’re learning how to pitch and have a quality time with local VCs. We’re meeting inspiring people and we stretch our limits in the international companion of people from Syria, Denmark, Germany, Italy, Czech Republic, France, UK…

So far it’s going great and I can literally feel the value of the program enriching UXPin’s situation. Our financial results and metrics are decent, to say the least, with the average growth of 7% per week since August and ever growing satisfaction of customers. It’s obviously helpful in terms of rising funds, but the growth, on it’s own, it’s not nearly enough, to impress the kings of the Valley/Sandhill Road.

You need to have the right story. Convincing tale of you changing the world against all the odds. Epic hero story with a strong character, rich world and strong, but defeatable enemies.

Most of the things we’re learning at Blackbox Connect can be somehow sum up in just one skill: Storytelling. The words matter a lot and we’re learning how to put them in the right order. Isn’t that peculiar? Right in the center of the innovative tech business, I’ve found the most human skill of all - ability to tell the story. And I need to dive deep into my own mind and its limitation to regain the power that every kid has. 

Suddenly the Silicon Valley feels less emotionally remote. We’re all humans here, chasing our dreams.

UXPin exists to help people realize the importance of User Experience Design, popularize it and make it more approachable and easy to do for just about anybody working on web or mobile applications. We do that by creating a set of tools that help people express their design ideas.

The Power of a Deadline

When you run a start-up, you’ll probably learn quickly how much strict deadline matters. It helps your team focus on what’s really important and achieve amazing results that you expect.

How to set a deadline?

1. Units matters! “In a 2 weeks or so”, “As soon as possible”, “Tomorrow” are not proper time units for a deadline. “July 10th, 4 pm” - that’s the way you want to set goal and time limits.
2. Don’t change it. It’s way better to limit a scope of your project than change the deadline. Show some fuckin’ consequence. “Dead” in the “Deadline” is not an accident!
3. Monitor your team progress. If your team wasn’t able to finish project before the deadline and you didn’t even care to check if everything is allright before the deadline - it’s your fault! Fire yourself.
4. Treat people as people. They are not your property. They can have better and worse days and you should remember about it.
5. Always present a clear goal for your team.

Easy, right? I can’t believe how many times I did it wrong.

ps. I found some interesting points in Switch. Recommended read.

"Instead of wondering when your next vacation is, maybe you ought to set up a life you don’t need to escape from."

/Seth Goodin

Well, I’m not planning any vacation this year

Dear Startup - Be like Moleskine

Set of limited edition Pacman Moleskines. Charming beauty, emotionally engaging, simple… so damn simple. I was lucky enough to get them for my birthday.

It somehow resonates with my idea of a perfect product: simple in form, powerful in usage, problem saver that don’t leave people indifferent. 

Hope we’ll be able to reach this master’s level soon.

Moleskine, please, teach us how to create products.

"Practice safe design: Use a concept"

Petrula Vrontikis (I bloody love that quote!)

Walk with the dreamers…

“Walk with the dreamers, the believers, the courageous, the cheerful, the planners, the doers, the successful people with their heads in the clouds and their feet on the ground” /Wilfred Peterson

Today is a special day. We moved to our first, official, office. When we were starting UXPin, almost 2 years ago, we never thought we’ll have clients all over the world, investor and… our own office. Not that we didn’t believe in ourselves. We were just so focused on creating product that we just didn’t think about anything else. 

View high resolution

This is something that really stuck in my mind: to create healthy&wealthy company you need to take care of yourself. Build solid relationship with your beloved one, find time for yourself, do some fuckin’ sport. You don’t need additional things to worry about, working in a startup is stressful enough. Since I left my steady UX manager position, I have more time for my wife and myself (I even have time to read some comic books!), I’m on healthy Mediterranean diet and I’m sweating at gym. And yes… I still manage to work 10-12 hours per day, at least 6 days in a week and UXPin is doing great.

Contests-oriented startups

I’m wondering why some startups are so contests-oriented. Some of interesting products I observe are participating in couple of startups contests every month. Why the fuck they are not focusing on customers nearly as much?

(…and tomorrow we’re taking part in a Gala for Best Central & Eastern European Startups. We’ve been nominated. I feel little bit like hypocrite, but believe me - it wasn’t at all time consuming. It’s our first startup-contest ever.)

"I Like It” are dangerous words in an entrepreneurial company. We are all tainted, if only because of our endless pondering about the product we’re making. The only way to know whether our ideas are the right ones is to talk with users & watch their behavior. If you find yourself in a meeting having an “I think…You think” conversation, ask yourself “Does this matter enough to test it with customers?”. If yes, then build an MVP and test it. If not, then stop bickering, figure out who “owns” the decision, and let them make the call. (If it doesn’t matter enough to test…then it probably doesn’t matter enough to argue over.)"

10th principle of Lean UX by LUXr

This is so true. I’m afraid I’ve seen “I like it” - type organizations in the past. 

I’m about to have conversation with LUXr in half an hour. Really excited about it!