The 4 Legged Co-Founder

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Last November a dog adopted me. This is not some cute word play but rather an accurate description how Charlie came into my life. I have told our “founding story” many times so suffice it to say that a dog, abandoned to the streets of New Orleans, rescued me. Charlie is not my first dog.  There was a family dog for a short time when I was very young and for several years early in my career, I shared the companionship of a Beagle named Cassady.

Because of Cassady, what Charlie has taught me over the last 9 months is more remembering than new, but no less valuable. I have worked for myself for over 15 years. During that time I have had numerous ups, downs and way downs. Such is the life of an entrepreneur.  What Charlie has reminded me is that entrepreneurs can really benefit from a four-legged co-founder. Charlie is mine.

While I play many roles for a variety of startups, my primary one for the last 2 years has been acting CEO for a music technology company. Going from coach back to player is something I have periodically done throughout my career. I frequently say that a lot of an advisor’s “been there/done that” value, in the fast moving world of startups, has the shelf life of milk. Occasionally returning to the role of doer is something that I believe has made me more valuable to the startups and investors that I work with. Doing versus coaching also reminds me of the challenges, both personal and professional, facing founders. Stress, depression, feeling alone and an unhealthy lifestyle are all too common among founders. Having a four-legged co-founder has personally helped me to better handle these challenges.

“It does good also to take walks out of doors, that our spirits may be raised and refreshed by the open air and fresh breeze.”

-Seneca

My day typically starts early and can occasionally run very late. There have been times that I have found myself sitting down at the computer with my cup of coffee in the morning only to rise again after lunch. There has been plenty written about how sitting is the new smoking. That makes my chair habits the equivalent of chain-smoking. I do however walk a great deal. Whether it is to meetings around the city or from my home into the co-working space a few days a week. But on those days with no meetings? Not so good. Now, regardless of the day, Charlie will have none of my sedentary ways. With Charlie by my side, my day begins with a walk through the park and I end each night with a long walk through my neighborhood.  Combined with several walks during the day, sometimes at Charlie’s request and sometimes triggered by frustrating conference calls, my step goal is always met.

In addition to being my fitness coach, Charlie also frequently functions has my emotional support animal. She is more than happy to play an endless game of catch while I try to work out some problem in my head by mindlessly throwing a ball. She also has the intuition to lay on my feet or with her head in my lap when she knows I’m struggling. Her empathy is a great mirror for showing me the mood I am in. The list of emotional benefits provided by pets is long and animals have been used to treat individuals with all types of challenges. “Founder” may not be a clinical diagnosis but it is shorthand for a big bundle of challenges from depression to imposter syndrome. There is a good reason the top co-working space here in New Orleans is dog friendly.

Being a founder is a hard but I believe that there is a four-legged hack that can help. Are you a founder with a dog? How has it helped you? Charlie and I would love to hear about it.

People Powered Startups

I’ve known Rick for 2 decades. It was his research, when we were at The Forum Corporation, that showed me the power that people have to impact a company’s performance.  When we spoke recently, it was no surprise to find out that he had brought this knowledge into his angel investing approach. Following our conversation, I sent Rick a few follow-up questions. I thought you would be interested in his responses. I am interested in your thoughts.

Who is Rick?

For more than 25 years Rick Harris has been a consultant to business leaders and their teams, helping them create more strategic focus and better results. His clients have ranged from executives in the Fortune 50 to early stage start ups. But they all have shared one thing: as their teamwork improved, their performance improved.

Rick is currently an angel investor with Launchpad Venture Group in Boston helping portfolio companies to use teamwork as a strategic weapon. Launchpad consistently ranks as one of the top five angel groups in the country by the Angel Resource Institute’s annual HALO poll of deals done and dollars invested. He is currently working on a project to help better match the needs of portfolio company CEOs with the human capital that angel investors bring to the table. The ideas expressed in this post are his own.

Q1. As an angel investor, part of your focus in diligence is not just looking at the team’s credentials but looking at the team dynamics.  Why is this important to you as an investor?

Credentials are the price of entry. You want to be able to invest in people with the strongest track records. After you’ve established that you have people worth investing in, the question becomes can they work together? If the company has some history, the question is, “Are they working well together?” You want enough difference of perspective in the team that conflict can surface, but not so much that drama takes the place of real work. I look for three things to give me a clue about their dynamics:

  1. Are they aligned around a common direction?
  2. Are the roles clear?
  3. Who talks most/least and does it affect decisions?

By listening to answers to the first two questions and watching the behavior of the team in group discussions, I have a pretty good sense of whether the proceeds of a funding round will go to the purposes outlined in the investor deck, or whether the proceeds will be gobbled up by a muddled team.

Recently I was in a scouting meeting with two co-founders. After several minutes of discussion, one of my colleagues said, “So which one of you is the CEO?” They both said, “I am.” My rule of thumb is that you don’t want to invest unless you feel really good about the answers to these three questions

Q2. What do you look for that indicates a positive team dynamic?

In a seed stage round you’re typically looking at the dynamics between co-founders. And the first thing I look for here is discipline diversity. Ideally co-founders should come from different disciplines—a technical person paired with a marketing person, for example. If that’s the case then I’ll ask one person to tell me why they need the other person’s knowledge at this stage of the company’s development. If they can’t give me a coherent answer, red flag. What I’m looking for is the ability of each founder to talk knowledgeably about the other’s contribution, not necessarily to have the same depth of knowledge. Occasionally co-founders are both technical. If this is the case, I’m reluctant to invest because they haven’t proven they can create a positive team dynamic with other disciplines—something that will be needed to support the company’s growth.

 For an A round the team dynamic tends to get more complex because there are not just co-founders involved. I’m still looking for appreciation of other disciplines. In addition, I’ll also have a chance to see the team in action at an investor presentation. My preference is for the CEO to make the pitch and hand off questions to the right team members. That gives some insight into the extent to which the CEO will leverage her team on other issues and it gives the team member a chance to show their stuff. Series A diligence will also include interviews with individual team members where I ask them to describe how other team members’ efforts contribute to theirs. I’m looking for an indication of interdependence.

Another thing I’ll ask about is conflict: what is an example of a conflict that was handled well and one that wasn’t. I’m looking for insight into how they manage their differences. If they have trouble answering this question, I’m suspicious that people are avoiding conflict. Maybe somebody told them that they should be a “team player”. Good team players hold each other accountable. I don’t want them making nice to each other if they are not in sync with key decisions. That’s how you burn capital without getting anything done.

Q3. What suggestions do you have for founders that are looking to create a positive dynamic?

  1. Step back from the day to day and ask yourself “Why is what we’re doing important?” People love to work for a winning team, but in a start up the wins can be a long time coming and the work required to get there can wear on people. It helps to remind them that what they are working on is part of something bigger than the next line of code or the next market test.
  2. When talking about the importance of what you’re building, be sure that you’re saying something that is truly inspiring to you. Genuine feeling is way more important than rhetoric. If your team can get inspired then the chances are good that your customers will be inspired…and that’s the real goal.
  3. Create a set of values that have meaning for people. Start with the question: “How do we want to treat each other as we work together each day?” Then branch out to asking the same question about customers, and perhaps other stakeholders. You can start with the co-founders or open a discussion with the entire team.
  4. Acknowledge people publicly when they act on the values.
  5. Ask for feedback on how you can do your job better. People love to give advice. Let them feel part of the team by giving the founders some helpful suggestions.
  6. When going through a rough patch (they happen), increase your contact with the team. People can disengage during hard times. The team will perform better if they don’t.

Follow up note: With all the controversy swirling recently over the toxic effects of a bro-culture, I’ve asked Rick to weigh in with his perspective on the role leaders play in feeding such a culture and what they can do to keep their company focused where it ought to be…on customers and growth. Look for his response in an upcoming post.

 

Adding More Fuel to the Fire

I am fortunate to be able to have coffees, happy hours, phone calls and walks with some really smart people. Having spent the last 15+ years working in and around the startup world my network contains investors, founders and supporters of all kinds. I started this blog as a way for me to capture the learnings I have had so that others may benefit from it (and I don’t forget them). As I move forward with this blog I also want to give readers the opportunity to hear it right from the mouths of the smart people who teach me.

So, in the coming months I will be posting a variety voices in addition to mine. the format is simple, a small handful of questions to provide my friends, colleagues, mentors and others the opportunity to share directly with you.  Sorry you will have to provide your own coffee.Bonfire night fire

Don’t worry there will be continue to be plenty of my own crazy ramblings Half Baked ideas and posts of me just thinking out loud. the goal of adding these additional voices is to make sure that they’re smart messages don’t get lost in translation. I thank in advance all of the people in my network that have and will be contributing. I’m grateful for all that I’ve learned from you and hopefully I’ve been able to give a little bit in return.

 

 

Founders, I Appreciate You

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When I started this blog I set out with a single goal, to become the Rick Rubin of Startups. I wrote about why and even declared it on my page to hold myself accountable. Years later I am not sure where I stand in my quest but I do know that the goal remains the same. I have had the good fortune to be counselor, coach, partner, audience to some great entrepreneurs. Founders that have consistently inspired me and always challenged me to never just phone it in.

As I close in on my 5th year in New Orleans, I took some time to look back on the some of the many startups that have been kind enough to share their journey with me.  They have varied in every conceivable dimension; sector, experience, stage, and viability, just to name a few.  While they are all startups and they are all founders they are also all unique.

When I first moved down here I wondered how long it would take for me integrate into the startup ecosystem. While I had over a decade of experience working with early stage companies I wasn’t from here and people “ain’t been knowing me” from high school.  But the community down here welcomed me with open arms, a trait I saw repeatedly as others came to town. At the time, ground zero for the ecosystem was the IP Building. With LaunchPadIdea Village and most importantly Capdeville under one roof, it was easy to actually see the community growing.  A special thanks to Tim Williamson, Chris Shultz and James Eustis for being such great hosts during those early days.

I take coffee, drinks, walking meetings every day with founders.  It is a joy to listen to stories, share experiences and solve problems.  You all have taught me so much.  I am very grateful to learn from, collaborate with and call you friends.  So in no particular order, and in no way complete, here is a list of some of you who have made my first five years here such a joy.  I look forward to the next five.  To those on this list, and to other founders whose wise paths I have yet to cross, if there is ever anything I can do  to make your journey better, you know how to reach me. Namaste.

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Herding Copy Cats

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About once a week someone pitches me a new idea (to them) that is being done by another company.  While I don’t believe that competition is bad (it’s the opposite) or that markets can’t support more than one entrant (most end up with at least 3) I do believe that the people pitching me do not really understand what they are copying.

Too frequently, me-too startups miss the point because they only see what is visible and only at a moment in time.  I had a mentor who always said that you can’t tell which way a car is moving from a snapshot. And with startups it is all about trajectory not current location. Was Uber just a taxi alternative or Snapchat a photo sharing app?  While at one time you could have easily described them as such, that was just what could been seen at the time.

Startups are never “done” they are always seeking new learnings in order to change, improve, refine the value they offer. And while the word “pivot” has long since fallen out of favor and in to parody it remains the inevitable result of paying attention to those learnings.  As founders we must do the same.

A friend once told me that you have to start with who you want to be “be” not what you want to “do”. Startups are the same.  So the next time you look at a startup and say ” I could “do” that, ask yourself what they could “be” and see if you still want want to pitch me.

Cheers to Barpreneur

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It was over 2 years ago when I was asked to judge a pitch competition being held in a bar.  Since all great ideas start out as bar napkin sketches I thought that it was a perfect setting.  You can see my blog post about it here. It was so well received that the restaurant, SoBou, asked me to host a weekly Friday lunch.  We gathered some special guests to tell us about their entrepreneurial journey and we shared a table with liked minded founders, supporters and friends.

And so it has gone for over 24 months.  We skip a week or two to honor special holidays like Thanksgiving and Mardi Gras but for the most part it is now solidly locked in my weekly cadence. Over this time the table has grown, and a core of regulars has emerged as has a wonderful parade of drop-ins.  Speakers have become regulars and regulars have become speakers.  And many have become friends.  It has truly been a honor to share the table with everyone that has come through.

SoBou offers free wifi and 25 cents martinis, not to mention some amazing food.  I have called it the best co-working spot in the city.  But it is the people that make spot. Our Friday lunches have become a place to share your week with others that understand the challenges of starting a business.  War stories, advice and support are always in great supply.

A huge thank you to Ti Martin for encouraging us to do the lunch, Sam Fritz for being my partner in crime every week and the entire staff at SoBou who are the most gracious of hosts every week.  If you are a founder in New Orleans, or even just visiting, you should swing by.  I’ll bring a quarter to buy your first drink. Learn more here.

 

The Buddy System

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From the time we start taking field trips in school it is etched into our head.  There is a whole genre of great movies considered “buddy flix”.  And if you ever meet a person named “Buddy” I would wager you are predisposed to like them.  At its core the buddy system consists of the recognition that two is better than one. At some point however, in a world where individual achievement is so celebrated, the value of having someone at your side can sometimes get lost. It shouldn’t be.

1+1=3

I have been a long time proponent of co-founders.  Down here in New Orleans I have seen a lot of single founder startups.  No disrespect to the talented founders here in the Crescent City but being a founder is hard. Without a buddy it is even harder. Having a co-founder gives you someone to be real with, someone to call you on your shit and someone to hold you accountable. This is not about mentorship or coaching this is quite simply a mirror whose reflection of yourself you trust.

Since I assumed the role of CEO of VL Group eighteen months ago I have essentially been a solo founder, the very thing I have advocated against. Here is how I am coping.

Step 1: Find One 

One way to do this is to look for the “no one understands me” expression as you talk to others at those painful networking events. Glance around the Meetup you are at and nod at the exhausted person at the other end of the bar.  Other founders are a great source of buddies but not the only one.  IMHO the criteria for this role is only what was listed above, not a mirror image of yourself, so look at who is around you right now.  Here is a helpful test.  If you were to explain a problem you were facing and their response would be greeted by a voice in head that says, “you don’t get it” that is not your buddy.

Step 2: Weigh Yourself In Public

Once you have found one the next step is to make sure that not only can they give you real feedback on what you do but also that they are empowered to give you shit for what you don’t do.  One easy trick to get the most out of your mirror is to give them a list of questions to ask you when you meet. Have them ask you about the things that are important to you.  WeightWatcher’s differentiator for the longest time was the peer weigh-ins.  The peer accountability was the key to results and it is the same with me.  My buddy asks me a series of quick question when we talk.  Mine are about how I am taking care of myself, what I am reading, and if I am writing (yes, are you reading this?).  These are things that I said were important to me and having to answer these questions out loud won’t let me forget it.

Step3: Be One!

The role of buddy is and important one and in the spirit of paying it forward you should be one.  The best way to understand the value added by having one is to find a friend, hold them accountable and applaud when they achieve their goals.