Archive for October, 2010
For the last few months, there’s been a storm brewing. It’s a storm that eventually confronts almost every startup on earth, and it’s named “What are we doing?”
Questions of strategy, vision, and objectives do drive the conversation with investors, and the further along the path to funding you go, the more critical it becomes to have consensus on these three points:
- Objectives – What do we want?
- Vision – Who do we want to be?
- Strategy – How do we achieve these goals?
You’d think that having a common viewpoint on these questions is simple or easy or intrinsic. But unfortunately, it isn’t. Later down the road you may be confronted with a confounder who wants to sell out to the first bidder, as soon as possible, because their objective was instant gratification, and their vision was immediate buyout, and their strategy was to push the product into the lap of anyone who had the cash and moderate interest.
The best piece of advice that I’ve received from VCs I know is to figure out what I want, and communicate it to my partners/cofounders. An honest, open discussion is the right place to start. It definitely is worth it to know if there are differences early; then there exists the possibility of making sure those differences don’t become issues. Funnily enough, at the time I considered this advice to be somewhat worthless. I said to myself, “what crap! I mean really! Obviously I want the company to be successful and I want to make millions of dollars!” Later, when I remarked on what was said, it sparked a conversation between my teammates and me.
And that conversation was mind-blowing.
What we discovered was that:
- Person A is ‘in this’ to make money, and cares little about the company, the product, the vision, or anyone else. (I’d like to add that this is not necessarily a bad thing since this person reminds the team constantly to monetize the product, meet deadlines, and move forward)
- Person B: sees entrepreneurship as a lifestyle and plans to start many businesses, not just this one, and needs the company to be successful because they view this as a long term relationship building exercise (success meaning, “worth millions” vs just being profitable, which we are)
- Person C: is an ideas person and wants to change the world through technology, and thus really cares about design, code, efficiency, and user experience… but not about money whatsoever
- Person D: is really deeply involved in nonprofits and social media and truly cares about this particular product/field’s ability to help organizations fundraise and gain traction, and thinks it should be given away for free as a service to humanity
That’s a lot of difference, right? Not only that, but some people wanted to sell out early, and others want to keep the company and generate revenues … no matter what. Some people support getting VC funding and others think, “why bother?” It was really eye opening, and I realized that it is a conversation that needs to be had.
I couldn’t agree more with her. One of the great things about Giv.to is that we built the product with helping the world in mind. Of course, there has been a push from outsiders (who shall remain nameless) to make it into a product that serves brands instead of organizations, that has features that cater to the private sector. I have impressed upon the Founders that I think Giv.to should remain, or that we should maintain, a product that is geared toward helping others. That I think we should provide the service free or near free to nonprofits.
But I dont know if this opinion is compelling or what the end result will be. I think many start ups also face this dilemma and as a result go through a shift in vision, strategy, and objectives on the road to funding. There is pressure on startups to follow the ‘fad’ and make something ‘viral.’ But what about non-fad, non-viral, world changing stuff? I know an aerospace engineer who thinks he can build a model (or at least demonstrate) that will increase highspeed rail travel by double or triple. He worked in Navy Air, he went to MIT, and he’s brilliant… but he can’t find anyone to fund him in the USA, because VCs are mostly interested in twitter apps (like ours). I told him to move to Japan. And I also vowed inwardly that if I end up making any money off of Giv.to, or any other start up I end up doing, I’m going to invest in his idea.
And I confess I haven’t always thought this way, or don’t always think this way now. But I do think Giv.to is a great brand, with a strong message and good name, with products that really help organizations ‘figure out’ social media. Working with a tiny budget in a nonprofit that needs every dollar to accomplish its mission, they appreciate things that are easy, free, and can outsource a campaign to the followers (which is what Giv.to does, plus other cool stuff). We’ve had a lot of positive feedback and we’ve learned A LOT from our customers – and we implemented changes along the way accordingly. I’m thankful all the time for the DC non-profit community, and firms like Convio, because there is such a spirit of cooperation and so much passion for diverse causes.
I retweeted Jolie’s article, and I really hope others will too. The more people who get this message, the better.