Brandery Demo Day Insights

The Seed Accelerator Rankings Project reports over 150 accelerator programs in the United States. In India too we’ve seen a large number of accelerators pop up over the last two years. Yet this last week, Dave McClure of 500Hats was quoted saying “If you think that running a startup is a bad idea, then running an accelerator is an even worse idea” at StartupIstanbul.

Tweet from StartupInstanbul

Yesterday I attended the Demo Day at Brandery, (ranked #12 accelerator program) based out of Cincinnati, thanks to an invite by Tony Alexander, ex-entrepreneur and GM of the Brandery.  The day was eventful for many reasons – all of which I’m hoping to write about. But the thing that struck me most was how the Brandery has followed much of the advice we give entrepreneurs to set itself on the path to success. Not just accelerators but regional ecosystems everywhere can take a leaf or two out of the Brandery’s playbook.

By playing to their strengths and clearly articulating what those are, the Brandery have set themselves up for success. The short version:

  • Focus strong & narrow focus on branding, marketing and design, playing to their strengths
  • Partnerships Strong local ties with consumer goods & retail firms – both as investors and partners
  • Geographic Mix Attracting startups from around the country (& the coasts) to magnify networks
  • Metrics Measuring and reporting key outcomes – exits, startup equity raised, jobs created
  • Long game focusing on their entire ecosystem and the long run gets community commitment

Of course they offer the table stakes that all accelerators & incubators need to bring – strong mentors, equity, good cohorts and co-working space. I’ll get a longer version of the insights garnered hopefully soon.

4 Lessons from 3 Months as a Gaming Startup

Since 1988, when I began working, I’ve been part of three multinational firms (National Semi 1988-96, Synopsys ’99-2000, SiRF 2006-08), two startups (Microcon 96-97, Sasken 97-99), started two companies (Impulsesoft ’99-2006, Zebu – 2009-’11) and one non-profit (NEN, 2011-14). Between 2006-2011 I also invested or advised a variety of startups, a few of whom have thrived and a few died. Most of course are hanging in there. You’d have thought I’d have learned a few things over these 26 years and I have. Yet, doing a gaming startup has brought home loud and clear how much more there is to learn.

Follow The Dots

In mid November, my partners and I began working with a young man, for now code-named Don Knuth to pivot Zebu Communications – our originally marketing automation, then marketing consulting startup – to be a gaming studio. Since then we’ve launched two games on Android HomeBound and Follow the Dots and one on iOS. This post is a quick summary of 4 Lessons that I’ve learned (some granted needed reminding). Some of these are true for all startups but particularly relevant when embarking on a startup outside your own area of domain expertise.

Act fast and often I’ve never stop to be amazed to discover how much I STILL don’t know – not just about game mechanics, App Store Optimization or customer acquisition, monetization or mobile eco-system and even doing press releases. I’m sure there’s more stuff that I don’t even know that I know nothing about. Yet whatever I know, that I need to know, came from doing things. We got our first Android game out the door in 3 weeks – sure it didn’t set the world on fire (yet) – but I’ve learned more in this time, that’ll keep us rolling for the next one year. Reading is good (and I’m a big proponent of it) but acting fast and often, especially when it’s a new domain is very important.

Business first Doing a startup, particularly a gaming one, is loads of fun – there’s ton’s to do – games to play, code to write, logos to design – it’s very easy to keep busy. And as you learn stuff (see above) there’s even more stuff to do. Of course all the things that involve product development (concept, design, coding, testing, competitive analysis) are all in your “control” and feels like “real” work. So there’s a real risk that you’ll spend all your time doing these “fun” things and its easy to lose sight of the fact that you are a business – in other words you need customers – who’ll generate revenue for you – whether by paying you, through ads or other purchases. So spend as much time thinking about how you will make money and validating that – fast and often. We are yet to figure this out, but think about it and try things every day.

Consult others Luckily both the entrepreneurial community and gaming in particular is quite giving and willing to share. There are so many unknowns in building a gaming business that it is both an opportunity and a risk. So talk to people who are in the business. For instance a friend introduced me to Rajesh Rao, founder of Dhruv Interactive – India’s oldest game development company. They’ve been through the whole cycle – game development as a service, product development, to game incubator and Rajesh was sweet enough to take the time to give us an unvarnished view of the pluses and minuses. Others whether Vishal Gondal or Alok Kejriwal have been active speakers, writers and supporters of the gaming scene in India. Numerous indies have been forthcoming in sharing their time and insights locally and globally. It would be a huge mistake to try to do this – for any startup – on your own without consulting others and seeking their counsel.

Do your own thing Of course having sought others counsel, you still need to do your own thing – at least you’ll be well-informed. The challenge when you consult others is that you will get a lot of seemingly contradictory advice – do this, don’t do this. If we went completely by what others said – and I’ve done that more than once – we’ll come to rue it. What they said was most likely true – for them and at that time – the very opposite may be true now or for you. So getting to know what you need to know and what others have tried or not – regardless of whether it worked or not for them – is important but beyond that you gotta do your own thing. We were told that interstitial ads work better, but we found text ads worked better for us. Of course we may find video ads work even better or not. So do your own thing to verify.

Once a quarter, I will share our learnings as we embark on yet another startup journey. Meanwhile – support us by downloading our games, reviewing them and spreading the word. Thanks.

Should I start my own business?

Should I start my own business?” If you have ever found yourself asking this question, you are not alone. And rarely does this question arise by itself — on its heels, many more rush in. “How do I know it’s the right thing? What’s the first thing I should do?” A simple search on Amazon or Google with the words “Starting your own business” provides 738 books and over a million hits respectively — in a sense, this choice of plenty only seems to add more questions beginning with, ‘Where do I start?’ The best answer to this question is the simple one — start with yourself!

Before you try to figure out, “How do I raise money, or should I get a patent first or do I need partners?” the first step to answer the question should you even start your own business, is to better understand yourself. While some reflection is needed, this is not so much a philosophical or metaphysical exercise as much as answering three simple questions about yourself. You may have never taken the time to think about it and even if you have asked yourself one or more of these questions, never had the opportunity to step back and answer them. Certainly, once you start your own business, you will not have the luxury of time to answer these in any detail.

N.S. Raghavan, former joint managing director and one of the founders of Infosys, narrates a story about a young man who approached him seeking advice. “I have a job offer from Infosys and an option to start my own business — what do you think I should do?” When Raghavan responded, “Take the job with Infosys,” the youngster was taken aback. In Raghavan’s words, “If you are an entrepreneur, starting a business is not an option that you consider alongside taking a job — you’d just do it!” To dive in, or to ‘Just do it!’, as the ad exhorts us, is easy — staying the course, not drowning and not ruing it along the way — is the hard part. Let’s ask ourselves those three simple questions.

Passion

Ask yourself, “Do I feel passionate about this? Will I feel as passionate about this a week from now? A year or five years from now?” If the answer is anything other than yes, you might want to keep that resume polished. When you ask yourself, “Do I feel passionate about this?” — ‘this’ could be a product — a low maintenance, low-cost, yet effective water purifier that four-fifths of the world needs; it could be a service — ball room dancing instruction for high-schoolers; it could be a concept — helping farmers in your hometown reach customers worldwide directly — or nearly evangelical — fresh water to every village in your state/country — it could be anything, as long as the fire of passion within you burns undiminished for long periods with little or no kindling. This is a good question to ask first and have answered in the affirmative before starting your own business. Do not confuse passion with being right or knowing something — passion is primarily believing and wanting. Once you start your business, you will learn more ways of being wrong than you’d thought possible.

Risk-taking

Being an entrepreneur, which is what you’d be if you start a business, is a risky proposition — probably not as risky as skydiving or crossing a busy road in Bangalore during the evening commute. Most businesses last longer than a skydive and are fraught with challenges. So the next question to ask yourself is how risk averse you are.

Risk means many things to many people. Most people think primarily of financial risk — this, while certainly measurable, may be the least important. Often there will be others to bear the financial risk with you.

However, the time you personally invest, the emotional energy that would be required of you individually and most importantly, your self-worth, will be the bigger risks you will be taking.

These will be largely immeasurable but have far greater import on the rest of your life. So if you have never taken off for the weekend on a whim, usually get to the airport three hours ahead of schedule and have never run a yellow light, it is worth figuring out what your risk appetite is.

Perseverance

Call it whatever you want — doggedness, perseverance or relentlessness — to be an entrepreneur means continuing in the face of constant discouragement by the world around you.

Often it would seem as though everyone but you feels it makes no sense to continue and yet you persist. Investment bankers who have yet to begin shaving will offer you advice. Your spouse, your engineering manager (and her spouse), that cheeky long-haired fellow in customer support not to mention your suppliers and even customers will question, critique and challenge you.

So if you haven’t been called pig-headed more than once in your life or find you cannot last through one session of working through the “simple” income-tax form or are discouraged by having to make the same presentation for the 17th time, some work may be needed in this area.

If you answered in the affirmative to the passion and perseverance questions, you are ready to start a business.

Should you actually start one, your chances of being successful at it or even enjoying the journey, will be determined by your answer to the risk-taking question. Luckily, for us, unlike the Prince of Denmark, it’s a little easier to answer the question, “To begin or not to begin?”

This article first appeared in The Hindu BusinessLine in Dec 2007.

Startup Founder Secret #1

Much like the well-meaning father’s friend in the movie Graduate, almost everyone has advice for startup founders. Never mind that such advice ranges from “Unlike your brother, I hope you find a good job” to “Never give up, follow your passion.” I haven’t been averse to handing out such platitudes myself at times. And such advice, like a broken clock, will be occasionally true.

But is there advice, actionable and useful, that is applicable regardless of your startup’s life stage or your own for that matter. I’d argue yes!

Meditate!

That would be my one word advice to founders (and leaders) everywhere. It’s also a sneaky way of saying Take care of your mind which in turn will necessitate taking care of your body as well.

There’s a great deal of formal studies on the advantages of meditation – from how it can make you happier, make better decisions and how it helps the US  Marines do better by bouncing back faster!  More importantly there’s plenty of useful and actionable advice on what meditation is, how to start meditating, how long a session should be and when can you expect results.

Get started My two favorite resources are Eknath Easwaran’s meditation method – and the formal medical world, here represented by the Mayo Clinic’s Elements of Meditation.

Start today with 5 or 10 minutes set aside for meditation. Preferably first thing in the morning. Work up to doing 30 minutes of meditation a day, and once you get there, keep at it.  I suspect, you will find it so much easier to handle, life and everything it throws at you.


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3 Things To Look for in a Co-founder

Co-founders

Photo: MyTudut

Almost soon as I made the case why you need a co-founder, a friend responded with the question “What should I look for in a co-founder?” While we’ve asked this question of both entrepreneurs and angels, here’s my take on what you need to look for in a co-founder.

Vision Match Building a business is often a long hard journey, and you want to make your that your partner or co-founder shares your vision. As setbacks occur (which they will) or when money seems hard to come by, customers leave, milestones slip or worse yet when things work, and especially when you seem to be making more money than you can keep track of, having a shared vision will ensure that things stay on even keel. If there isn’t a shared vision of why you are running your business and what it is you seek, as a company and as individuals, it will be difficult to survive every fork in the road that you’ll encounter. And you will encounter far more than you can imagine. So make sure your visions match.

Complementary Skills All too often we end up hiring or connecting with people who are just like us. While that’s nice, its far more important to find someone who has complementary skills – someone who’s comfortable talking to prospective customers or selling, if you are building a product. Someone who can manage projects or money, if you are out there focused on selling; someone who’s comfortable writing or documenting while you are out there hustling or building. Usually startups require everyone to be as hands on as they can, especially co-founders and it can really help, if they can do things you can’t or do them better than you can. So make sure that they not only have shared vision but can do things you can’t!

Honest & Open Communication The nature of startups is such that you will screw up. Heck so will your co-founder and more than once. So it’s important that your co-founder and you share a healthy interpersonal relationship – one not just based on mutual trust and but on honest and open communication. If you walk around each other, either too polite to raise uncomfortable topics or avoid conflict or confrontation at all costs, lots of important issues will not get sorted out in a timely manner and that’s something no startup can afford. So it’s really important that you feel comfortable around you co-founder that either one of you can raise issues that bother you and can be talked through to resolution. Only with honest and open communication can you keep one another honest, not to mention your business out of trouble.

Here is Sanjay Anandram’s take on what to look for in a co-founder

Meanwhile to make sure that  your prospective co-founder & you are aligned on

  • a shared vision of the company and its raison d’etre
  • what complementary value each of you bring to the table
  • talking openly and resolving matters through timely and effective communication

So go out there and find that co-founder. Good luck!

2 Ways Growth Can Kill Your Startup

A popular Frank Sinatra song speaks of love and marriage going together like horse and carriage. The words startups and growth seem to be used much the same way. Recently I moderated a panel on “Why some startups grow and others don’t” at the TATA First Dot powered by NEN student startup showcase.

One of the questions that came up during the discussion was

Is growth always good? Are there instances when growth can be bad?”

The panelists all agreed that NOT all growth is good growth. Specifically,

Non-focused growth Naga Prakasam, angel investor and mentor, brought up the point, that growth unless directed and focused can easily derail a startup. So growth in revenue, even when profitable, could turn out to be bad in some situations.

One of two things most commonly happen

Revenue consideration – as a cash-strapped entity many startups chase any and all revenue – so you have product companies taking on services or service firms taking on non-core functions – pretty soon the organization is pulled in many directions with people stretched either too thin or into areas that are not their strengths

Customer retention – you have a major or important customer for whom you provide specific products or services. They want you to support them doing something that another vendor is doing – for instance in my first startup we did only Bluetooth software. However our customer, one of the largest accessory makers in the world, wanted us to help them with IT support too. Luckily we turned them down even though the risk of losing our core business to their IT vendor loomed. (Of course their IT vendor claimed that they could do Bluetooth software as well – but that’s a whole another story 🙂 Such growth, unless planned as part of a larger strategy, will eventually end up hurting the customer and your business, as you take on things for which you either don’t have competence or distracts you from your core business.

Non-profitable growth In the semiconductor business, we’d always joke about “making it up in volume!As airlines, magazines and mobile phone companies learned the hard way, growing non-profitably, especially when you lose money on each sale is not a good thing. In  fact, the more growth you have the more money you’ll lose (or burn through) and rarely is the outcome pretty. Sure, there are times you have to get your foot in the door, enter a new market, test a new product when you will lose money – but hopefully that’s well planned and the downside is contained. Either it allows more profitable products to be sold or customers to be acquired and cross over from loss to profit making, when some volumes are attained (or fixed costs or amortized).

Growth, when focused and profitable is good. But when neither can easily hurt your startup and possibly kill it too!

Where do you start?

Photo: Lori Greig cc

Photo: Lori Greig cc

You have decided to start your own business, that’s great! What now? Where do you begin? The good news is that you have already begun — taken the first step, so to speak, with your decision. Now, it’s merely a matter of finding customers, figuring out what they want, providing it to them, preferably better, faster and more economically than other folks and start counting the cash! Before you run out to do all that, it’s good to have a plan and it’s even better to see what others have done; those who have been successful and even those who have failed once or more. By building on the lessons they have already learnt on how to start, run and grow a business, you begin on the shoulders of those who have gone before — both giants and mortals!

Read and listen to others’ stories

Unless you have a grandmother who likes to tell stories or, as in my case, a father ready to regale you with tales of business, reading is the best place to start. Even if you are a vociferous reader, you will soon discover that reading is a luxury once your business gets rolling.

If you are amongst those who never found reading a pleasurable activity or just did not do a whole lot of it, this might be the right time to get a good shot at it. Reading about or, in these days of audio books and podcasts, listening to stories of other entrepreneurs will serve not only to inspire you, but help you avoid mistakes, small and big. Every person has their favourite list of must-read books, as do I (see box). Like most good advice in life, these books are timeless and can be read in whole or part at any time. Each time you go back to them, you’ll find another nugget of insight and they will grow with you as you grow as an entrepreneur.

Get yourself a mentor or two

When the good bard said, “Uneasy lies the head that wears a crown,” he knew a thing or two. Once you start a business, there will be many a night and day when you will not merely be uneasy, but feel alone. Having a mentor and sometimes more than one mentor can help you get through not only those dark days, but many a time help you avoid them by appropriate forethought and preventive action. Most start-ups, even those that are well-funded, have a formal board of advisors who can help the entrepreneur discuss ideas or options, gain introductions and get advice on topics relating to the business.

Regardless of the nature of the business you intend to start, having a mentor or an advisor is a smart thing. Besides the experience and contacts they may bring, just the fact that they are not as intimately involved with the daily trials and tribulations of the business makes them that much more objective and, therefore, valuable. In different times in your business, you will find that you need different kinds of mentors – the only real criteria for selecting the right mentor are your trust, comfort and judgment.

Write down a plan

While there are entire books devoted to creating business plans, I am not a big believer in three ring binders and 20 pages of spreadsheets showing discounted cash flows. In fact, I am not sure I know what discounted cash flows are. However, writing down a plan in simple English is always a good idea. Just set down your aspirations for the business and capture the five Ws and the H — what, why, when, where, who and how.

Your business, if it is anything like 90 per cent of other new businesses, is certain to go through significant changes, many in its first year of existence. This, however, is not a reason to not have a plan. Six months or a year into your business, when you revisit the plan, you can update it, edit it and, if required, throw it away and begin a new one. “Start your business at the beginning — not the business plan or paperwork or an office, but your idea, reduced to its core essence,” says Paul Hawken, successful serial entrepreneur and author, in his book Growing a Business. Reducing your business to its core essence is non-trivial and the best way I have found to do it is to write it down. Writing things down, you will discover, is one way to make them come true!

All the reading, listening and writing is only preparation for the real thing. So, after having read a little, listened some and drafting a plan, go out and get started!

A helpful reading list

Growing a Business by Paul Hawken: The first person conversational tone of the book speaks from the heart and is as applicable today as when it was written more than a decade ago. What the CEO Wants You to Know by Ram Charan: The author’s Indian origins and his experiences with the family shoe store make this book easy to relate to.

The Effective Executive by Peter F. Drucker: Forty years after its first publication, this book, like good wine, has aged well. If you are going to read only one book, this should be it.

Selling the Wheel by Jeff Cox and Howard Stevens: Most entrepreneurs are surprised when they build something and the world does not beat a path to their door on its own. This novel is the gentlest way to get acquainted with selling.

The HP Way How Bill Hewlett and I Built Our Company by David Packard: The archetypal ‘two guys in a garage’ story is not only a ripping good read, but filled with useful nuggets about values, people, business and technology.

This article originally appeared in the Start-up Logic column in The Hindu BusinessLine.