I am very pleased to report that SLP Boston is organizing it’s 2nd Ever Investor day, February 13, from 6-9pm EST. This time with a big difference: A team led by Michael Miller, Founder of Socialete is blowing it up, with 18 VCs already committed in tech, cleantech and lifesciences, and 4-5 more on their way. This event is really important for every Fellow anywhere, because we’re beaming in pitches from Chicago, Silicon Valley, New York and San Diego to these VCs.

Who’s incharge
Michael Miller – (running the show), Chris Tsai & Vikas Goyal (lifesciences pitches), Olivier Ceberio & Pedro Santos (cleantech pitches) and Kyle Fugere (tech Pitches). These guys are supported by Ben Reid (Chicago), Ankit Jain (SV), Chip Breitenkamp (San Diego) and Ji Li (New York) to ensure we have a great representation of startups.

Who’s coming:
These are the funds so far – 5AM (Lifesciences), Atlas, Bantam Group (Angel), Battery Ventures, Black Coral Capital (Cleantech), Common Angels (Angel), Covidien Ventures (Lifesciences), Excel Venture Management (Lifesciences), Flagship Ventures, Flybridge Capital, LaunchPad (Seed Fund), Next View Ventures (Seed Fund), Norwich Ventures (Lifesciences) Project 11 (Seed Fund; Techstars MD is Cofounder), Rockport (Cleantech), SROne (Lifesciences – GSK Corporate VC), Terawatt (Cleantech), Third Rock Ventures (Lifesciences) and Venrock.

For those of you around the world, we’ll have one of these in India soon, and hopefully NY and Silicon Valley as well.

Anupendra & the Incredible SLP Investor Day team

SLP Boston is pleased to announce an Investor day on February 13, for our Fellows. Thirty startups in SLP will pitch for money or advice from around the US to investors located in Boston. The investors already confirmed include:5AM (Life sciences), Atlas Ventures, Bantam Group (Angel), Battery Ventures, Black Coral Capital (Cleantech), Common Angels (Angel), Covidien Ventures (Life sciences), Excel Venture Management (Life sciences), Flagship Ventures, Flybridge Capital, LaunchPad (Seed Fund), Next View Ventures (Seed Fund), Norwich Ventures (Life sciences) Project 11 (Seed Fund; Techstars MD is Cofounder), Rockport (Cleantech), SROne (Life sciences – GSK Corporate VC), Terawatt (Cleantech), Third Rock Ventures (Life sciences) and Venrock.

We’re working on a similar event in India. Stay tuned !

Anupendra Sharma

Thanks to TechCocktail for sharing this Flickr photo of Brad Feld under creative commons license. 

Note: There were two segments of a call with Brad Feld. The first part consisted of short pitches from six SLP entrepreneurs located around the world.  The second segment of the call was a talk with Q&A with 100 Fellows from the Startup Leadership Program (SLP) around the world. We’ve provided the writeup from the second segment. 

Pallavi Singh:  Thank you everyone for joining our first global talk with a guest speaker.  We are obviously really excited and honored to have Brad speak with our community.  If you are an entrepreneur, Brad really doesn’t need much of an introduction.  He is known for many things including founding TechStars, which has become the number one startup accelerator in the world.  It was founded back in 2007.  TechStars is a mentorship and development program, which has grown into five cities and has worked with hundred entrepreneurs since its inception.  Brad is also an active investor with Foundry Group and most recently has become involved with a nationwide initiative called Startup America.  Brad recently published a book called Do More Faster, which is a collection of essays written by TechStars mentors.  He is also coming up with a new book, which is about building entrepreneur communities. I believe that’s being published in the next few months.  Now Brad, we’ve given you a couple of ideas about what we would like to hear about, but its really up to you. I am pretty sure anything you talk about its going to be interesting to our community.  So if you want to take the floor.

Brad Feld:  Great thanks for a ton for having me. A couple of housekeeping things on the front end. One is my e-mail is brad@feld.com and I am happy to get e-mails from anybody that’s on this call.  Just make sure you put somewhere in the email “SLP” so I remember the context of it. But if there are things that you want to follow up on or things I can be helpful with, or you just want feedback, feel free to drop me a note.  Regarding the structure – I am going to talk for ten-fifteen minutes and then I am going to spend most of my time going wherever you all want on Q&A.

I found actually pretty effective way for me to do with questions on a call with these many people is if you have questions in addition to the chat dynamic which I am not logged into.  If you tweet out the question and just do @BFeld somewhere in the tweet, I will see it my twitter client and I can just respond to it that way as well.

So I got a little bit of context about this group in advance. Obviously I know a couple of folks that have participated in the past and I just want to explain, before I talk through a couple of these ideas, that the general theme I am going to go after is this notion of “How to become a successful founder, CEO over time” and most notably “If you are first time CEO how to scale that up with the business as the business scales up.”

I would say as a starting point that participating in something like SLP is one of the best things you could do.  When I was running my first company I started it when I was nineteen.  It was a software consulting company very creatively named Feld Technologies.  My father was very proud of the name of the company and it took me until we were about a dozen people and a million-dollar a year company before I found a peer group of other CEO’s that I could spend time with.  And I found that through an organization called Young Entrepreneurs Organization, which at the time in the early 1990’s was about a hundred people.  I think today there are seventy thousand people around the world. What I found was another hundred people or so that were going through or had been through many of the same things I was going through.

So the first and probably most significant piece of advice I could give you is what you are already doing, which is surrounding yourself with your peers and making sure that you have high velocity communication with each other.  I would encourage very open, very direct and a very Socratic kind of feedback approach.  So recognize that when somebody is giving you feedback its not that they are necessarily telling you what to do, but they are giving you a point of view from their perspective and often times asking questions rather than simply saying “Here is what I think is the best way to make progress.”  So step one is congratulations, because you all are well on the path – the right path for helping each other out.

The second which is a big central theme of TechStars and I think an important part of my life is at the same time its just surround yourself with other peers making sure that you actively recruit and continually attract mentors.  We describe Techstars as a mentor group and accelerator.  Each program has fifty to a hundred mentors. Those mentors are often entrepreneurs or investors.  Entrepreneurs at all stage of the lifecycle could be multi-time entrepreneurs, it could be entrepreneurs that had success and failure and are now in between things, or people that are actively running very significant businesses. You often find mentors in other places such as service providers, lawyers, accountants, etc, but the best mentors typically are other entrepreneurs. Most entrepreneurs are very, very willing to help first time entrepreneurs.  And one of the things that I think you can use SLP to do is to encourage a culture of that across all of the people that you come in contact with, and frankly as entrepreneurs yourselves, make a personal commitment that you will be a mentor and continue to help other entrepreneurs along their journey.

One of the things I think that is a real challenge for founders especially as they grow their business, is to recognize where they should be spending their time and what they should be spending their time on.  Early in the business when its an idea and a couple of people, its very chaotic. You are doing whatever you need to do and you are spending your time on everything that you could possibly imagine as you start to scale up the business and build the business. Often times you add people to the team or there might be people on the team that take different responsibilities. As a CEO you have to learn how to essentially scale up and across the business.

One of the things that I have observed is CEOs, especially first time CEOs often in entrepreneurial context lose sight of what they really should be spending their time on.  So I will give you a couple of very specific things.

First of all and probably the most important thing that the CEO should be focused on is not running out of money.  If you run out of money, you have no business, so I always like to say that rule number one of the CEO is to make sure that you have money, whether its funding or revenue from customers or non-traditional sources of financing, which would include credit cardsor a customer prepayments or things like that.  Understand the dynamics between how much you are spending and how much you are generating. Remember that as a CEO that it’s your responsibility that the company never runs out of money.

Second is to make sure that you are spending time getting the right people on the team. This is not just the senior people, but all the people in the company.  There is a very well known two-by-two matrix. I like to joke to my Harvard Business School friends (since I went to MIT) that Harvard Business School has to come out with two by two matrix versus the three by three.  But that two-by-two matrix has on one dimension – the cultural fit of the person and the other dimension, the functional fit of the person. Obviously if the functional fit and the cultural fit are both high (for the person you are hiring), that easy. If the functional fit and the cultural fit are low that’s also easy. You wouldn’t ever hire that person. So in the first case you would, in the second case you would not.

It becomes tricky when the cultural fit is low and the functional fit is high or the functional fit is low and the cultural fit is high.  So imagine you have people that you really, really like, but they don’t fit that well in the role that you are thinking for them – whatever the reason is, whether its their skill set, their experience, their interest level.  And on the flip side as well, is the situation where you have very, very high functional fit and very low cultural fit.  In my experience the CEO should filter out aggressively people that have low cultural fit.  So I would always err on the side of people that have high cultural fit and a lower functional fit. That doesn’t necessarily mean they are no good. Just that a specific role that you are thinking of might not be exactly the fit.  But if somebody is a superstar, but they are totally antithetical to the culture of the company when you are a young business that’s very, very fragile and very dangerous. So be very careful about that. So thing number two is to make sure you get the right people on the team.

I just gave you a very specific frame of reference, a framework for thinking about that.

The third and I see this over and over again there was actually a blog post yesterday. Roger Ehrenberg wrote it. I enter some stuff in the comments regularly and then I put it up on askthevc.com.  If you all don’t know askthevc.com, its one of the blogs I help maintain. I try to republish links to what I think are the better venture capital posts, each day. I usually do it four or five times a week. In it, there was a discussion about CEO letting go and the idea that as the business grows, a CEO should let go.

It was one of the things I objected to conceptually and I described it as nonsense.

I don’t ever think a CEO or Founder CEO should let go of a product.  I think a founder CEO needs to be obsessed about products all the time. The best founders I have ever worked with were CEOs that were able to scale with their businesses over a long period of time.  We know CEOs who stayed obsessed about products.  I will give you some examples that are very notable ones.  Steve Jobs being one, Jeff Bezos at Amazon being another, now Larry Page at Google being another.  But there are many, many, many other examples of success cases and I found when the entrepreneur drifts away from being obsessed about the product often times the heart of the company starts to diminish.

So I go back to those three things, number one make sure you always have money in the bank, never run out of money.  Number two make sure you have the right people on the team and number three be obsessed about the product that your company is creating.

Question: How trainable is the startup CEO

Brad Feld:  My reaction to that is I don’t have any idea.  Some CEOs are very trainable. Others aren’t.  But it is actually quite important to ask the question – where the training coming from.  So if you are being trained by a venture capitalist, I think that’s a mistake.  Most venture capitalists were not startup CEOs.  The ones that were could be great CEOs, but you should really make sure you understand what kind of training you are getting from whoever that person is.  If the training is coming from a mentor and that mentor was a startup CEO or is a successful startup CEO, that’s probably really good training.  So my view is that its not so much how trainable the entrepreneur is, but rather who the entrepreneur surrounds him or herself with. I think if we cycle back to the notion of mentors finding great mentors that can really help you sort through the different problems and challenges that you are going to encounter along the way which will be many, constantly be available for you to give advice and give feedback is the most powerful way to get CEO training.

Question: Have any advice for startup CEOs on how to motivate teams. 

Brad Feld:  I have a very deeply belief that you can’t actually motivate anyone.  I don’t believe that the construct of motivating a team or motivating a person makes any sense.  All someone as a leader can do or manager can do is create a context in which people are motivated.  You might say that it’s a subtle distinction, but I think the very powerful one.  If you are trying to motivate somebody, you are trying to create some sort of behavior directly.  If you are creating a context in which people are motivated, you are very focused on things that are under your control namely the context and you are able to then evaluate whether or not that context causes people to be motivated.  And as a startup CEO or founder, you want to make sure that the people on your team are people who are capable of being motivated by themselves and being motivated by the context rather than having to be motivated by another person.  So hopefully I have given you a few things to think about in the abstract.  I know I haven’t given very specific examples and I am happy to do that in the Q&A.  But I want to make sure I take this wherever you all want.  So let me look at the twitter stream and see, lets come up.  Any questions so far as I am reading through this.

Question (Ajay Kapoor, Founder/CEO of Fresh Foundry, New York):  How do you think about attracting mentors.  What context can we create for them?

Brad Feld:  Attracting mentors tends to be very company specific and cultural specific in terms of geography. I will give you an example there.  So in Boulder. Colorado the entrepreneurial community here has worked very hard to establish a culture of something I call “give before you get”. So pretty much every entrepreneurs in Boulder recognizes that they should be giving without a sense of what they are going to get on the other end of that and as a result you have entrepreneurs of all skill sets and all experience basis contributing to the entrepreneurial community and the entrepreneurs who are looking for mentors are, its very easy for them to pick off people that they think would be helpful to them and start to engage with them.  Recognize that walking up to somebody and saying would you be a mentor is not a particularly effective way to get somebody to be a mentor.  In fact if you send me an e-mail after this call and said hey Brad that was really helpful thanks a lot for spending time with me, I would love it if you would be a mentor of mine, my reaction is I have no idea what that means, I don’t know who you are, I don’t why that would be helpful to you.  Instead start by giving before you get, engage in the relationship.  If you send me an e-mail saying “Hey Brad, super helpful, interesting talk, here is some stuff I am working on and I see that you have a company over here that I think I could be helpful with” that’s probably going to get my interest more or “Brad I see that I you are struggling with this particular problem our software addresses that problem” or “hey Brad I heard that you like beer and we are working on this beer thing.  How about if I get you signed up over here to do these things.”

So you sort of start by doing something and reaching out to the mentors by giving them something.  It doesn’t have to be financial, it doesn’t have to have meaningful tangible value, but just that mere act of building that kind of culture in the dynamic is very powerful.  Within your communities, the same thing plays.  So again you have, however many companies have gone through this program, every year you have alumni that go through SLP and get to the next stage of whatever their companies are.  If those people are all actively committing to be mentors back to the companies that are currently in the program, that’s a great start. And those mentors then say something like “I’ll help bring at least one of my mentors to bear on at least one of the companies and SLP” so start to build a culture around it.”  It starts to build over time.

The last thing I would say is there are lots of situations where a person is not a good mentor for you.  They don’t have the right experience, they don’t have the time, they don’t have the focus, and they don’t have the emotional engagement with you or your team.  They are working on something that might be in conflict.  So recognize it, it’s not a generic phenomena.  You are actually looking for not just mentors, but you are looking for the best possible mentors you could find.

Question (Krishna Ramachandran, CEO Ubersense, Boston), What’s the biggest motivational, biggest motivation and contextual challenge you faced in running Feld Technologies.

Brad Feld: Feld Technologies was a business I ran for seven years.  We started it with ten bucks in 1987 because that’s all we had.  We never raised any money. We built a profitable company because we had to be profitable and in 1993 when we sold it, it was about a twenty person, two million dollar a year business that was making about a half million dollars year profit.  A financially successful business.  By about year five I was utterly and totally bored of the business.  I got up every morning and did the same things over and over and over again – different sets of clients, but the same basic business problem that we were addressing.

I just didn’t feel like I was learning a lot in year five and year six and I was just bored.  That was a very interesting point in time because we didn’t really have an exit plan. We didn’t really have a view as to what we were going to do. At twenty people and two million in revenue we thought about growing to forty people.  We knew that if we grew to forty people (we were a software consulting business) we could probably do four million in revenue.

But when we actually looked at what we would have to do to grow to that level, we realized the profit that we generate would probably still only be a half a million dollars. So we doubled the size of the business, it would quadruple the headaches because the headaches were going to grow faster than the number of people we had.  And we would still end up making the same amount of money.  So we made a conscious decision at that point and time not to grow the business and instead to focus on making sure that we were learning stuff on a continual basis. What ended up happening was we got approached to be acquired. And that was very interesting to us because it was something we had never done before and put us into another trajectory.  But that moment and time when I realized that was over, rather than jumping into something else or branching out another direction I stepped back and thought hard about why I was bored and then was deliberate on the path I went down. I think it was a pretty important moment.

Question (Moses Hohman, CEO, Human Practice, Chicago): How does selling in an early stage startup different from selling at a more established company?  Are there good resources for learning specific of early stage selling the products of the company?

Brad Feld:  Okay so I think that there is depending on the type of business you have there tends to be very good resources for selling early in the company

If you have a company that has a consumer facing type service, I would strongly encourage everybody to get a copy of lean startup, The Lean Startup from Eric Ries, if you haven’t already. Read it because in The Lean Startup, Eric talks a lot about the process of testing and measuring everything you do. There is a part of that, that’s very applicable to sort of a whole business, but very, very specifically around the notion of crafting a product and selling in a way that creates pull from the marketplace where you have built something that land specifically on the market.  I would say that in the consumer facing type companies the evangelism of the founders is critically important.  So if you have founders who are out in front of the market and making a lot of noise it attracts people to try the products and services of a company, its very, very powerful and if you don’t, if you just sort of toss it out there and hope people will come it usually doesn’t happen very well.

If you are selling a business to business focus, the product evangelism of the CEO and the founder is still very important.  Look at companies, for example like SendGrid from our portfolio. The company does a transactional e-mail with any of your services; sends out e-mail of any sort whether they are notifications or friend requests or any sort of interaction with the user rather than write all the code for that, you should just use SendGrid products.  The founders of SendGrid have been basically everywhere evangelizing their service.

A company who we were not investors, and I think that does a brilliant job of that as well as is Twilio, where the founders were out in front of a product and in the market very aggressively.

So recognizing much of the early stage activity is much more evangelism and making sure you have an easy way for customers to buy. But that the founders are the ones who are out there actively promoting the service rather than trying to delegate that to the sales guy.

As the businesses get bigger you start to have a phenomena where you build out a sales organization. You start to have more traditional sales dynamics, but at inception this is part of the linkage of the founder and the founding CEO to products.  The best way to learn about your product in a lot of ways is to try to sell your product. Then if people aren’t buying you will learn pretty quickly why and if they are buying again you will learn pretty quickly why and you will build positive feedback with that.

Question: What ways have you seen non-technical and technical co-founders come together and start businesses? 

Brad Feld: So I think this is a profoundly important construct. Its something that we have really experimented with and learned from TechStars.  I have a very strong belief that the best configuration for a founding team is somewhere between two and a four founders and at least fifty percent of those founders should be product leaning.  It doesn’t mean they have to be coders or technical.  But they have to be focused all the time on the products.  If you have two founders, one product leaning and one not, that’s fine. Or two product and zero is fine. Obviously with four founders ,  two and two and a three and a one is fine.  You really want to have a heavy emphasis on those product or technical founders at the beginning.

Being a solo founder is really hard. It happens and there are successful cases of solo founders.  But its lonely, It’s a very difficult place to get feedback, The burden of the business is on your shoulder. Pften you are in a position where you can amplify your strengths or mitigate your weaknesses with the partner.  Having more than four partners in a lot of ways is just as challenging.  Just too many people trying to do too many things at the beginning and so that sort of two to four ratio makes a lot of sense.

I get the question awful a lot “As a non-technical founder, how do I find a technical co-founder” or “We are looking for a technical co-founder” or “I am a technical person and I want a business co-founder.”

My response that is just go hunting where all the nerds hang out. Whatever your community is, it is going to have a convening place for that and frankly if there is not a convening place for that, go create one.

In Boulder, for example we have a monthly new tech meet up, That monthly new tech meet up is now four or five hundred people. Half of them are regulars, but half of them are people that are coming for the first time or coming periodically.  It’s a great place just to get plugged in. You are not necessarily going to find your co-founder there, but you are going to get plugged into the entrepreneurial vibe of the community.  Another thing that exists around the world now – we have one in Boulder, is something called Open Coffee Club. It’s a little more intimate setting with usually its ten to fifty people.  The same kind of thing, just get plugged into the entrepreneurial community and see where it takes you.

It’s very, very, very important as you are getting to know someone, that you do things together.  I have seen away too many partnerships with the two co-founders or the three co-founders just decide to start a company and that’s the first thing they actually do together.  They don’t actually get any sort of trial experience working on something. The “working on something” could be a very simple project, it could be a startup weekend event where you are working on a idea together and just seeing what you like. It could be something that has nothing to do with the business idea, but its something that’s community-oriented. If you have an Ignite in your area do an Ignite presentation together.  But actually trying to do something together and seeing if it works, is often a really critical first step.

Question (Mel Gordon, Founder, TapHunter, San Diego)

What do I look for in a founding team?  So I just talked about the product team dynamic, but let me tell you the thing that I am most attracted to in a founding team. This is obsession and passion for the product.  When we evaluate companies to potential invest in at Foundry Group, we have a set of themes that we use to filter what we are doin. If you fit within this theme of ours, then we spend more time with you. If you don’t, then we just say very politely this doesn’t fit within our themes.  But if you fit within – well what you are working on fits within our teams we them spend all of our time on people and products and the linkage between the people and the product.  Its not that you have to have experience with the product that you are working on, but your intensity and focus and passion for that product is absolutely and completely key.

There is a great chapter in Do More Faster for those of you that haven’t read it. Which says, if you can, you should quit if you can or something like that. Its written by a woman named Laura Fitton.  And her idea is if you can quit your idea, it’s not a good enough idea.  It’s not the idea for you. The first thing in the morning when you wakeup is you should be thinking about your idea.  And whatever that product that you want to create, you should be thinking about it all the time. Once you start thinking about some other idea, that first idea is probably not the one that you should be, that you are going to work on.

Question: Is there any framework to evaluate where a startup CEO should spend her time?

Brad Feld: I don’t have one. I find that people work very differently and trying to be prescriptive about how someone should work I think is shortsighted because there are a lot of different styles.  I happen to have a style that has a very heavily tempo based for those of you that know my work style.

Let me just repeat it briefly.  I work extremely hard from Monday to Friday. I get up at five o’clock in the morning most days.  From five to nine is time for just me.  I spend time in front of my computer, I catch up an e-mail, I write a couple of blog posts, I read my daily information, what I call my daily information diet, whatever I am going to read for the day.

I am a marathon runner. I go for a run, spend a little time with my wife if we are in the same place.  And then from nine to about six everyday, I am very scheduled.  I schedule all phone calls. I don’t take any phone calls during the day, I don’t make any phone calls during the day if its not scheduled. Occasionally something urgent will come up and we will have to see to that.  But most everything is scheduled. For example, I have been on this call for forty five minutes and my phone hasn’t rung. The whole day will go by and my phone probably doesn’t ring.  From six to ten or so most nights, I have something that’s going on that’s a work related event, whether it’s a dinner with the company or a talk or something.  And if I don’t, I usually spend it with my wife Amy or friends.  That’s Monday to Friday.

On the weekends, I try not to travel so I would be home for the weekends, although often times Amy and I are somewhere else for the weekend. So if we go somewhere I don’t really consider that travelling because I am travelling with her.  And I probably put in another four hours of real work each day in front of the computer, sometimes more. But I don’t do any calls. I don’t schedule anything for the weekend so I just have these two days of completely flexible time to go for a long run, go to a movie, have dinner, hang out with Amy whatever.  So if you look at that week after week its pretty tightly scheduled and I have very much predictability about what each week will be.

Within that, every quarter, I go and disconnect entirely for a week.  No phone, no e-mail. I have some other things sort of in that rhythm, but that’s my rhythm.  That rhythm works great for me. It would be awful for lots of other people and in fact I bet there are at least half of you on this phone call that listen to that and just want to bomb it because it sounds like just a horrible experience.

There is this sort of idea that there is a certain way to do things. I don’t think there is.  Instead focus on the outcomes. Don’t run out of money. Make sure you got the right people on the team, be obsessed with your product and then focus your time. Just squeeze out all the distractions so that when you are most fresh, when you have got the most energy whether that’s late at night or early in the morning whatever your time is, make sure you are spending your time working on those events.

Question: (Ping Wang, Founder Ansir. SLP San Diego)  What made TechStars succeed above other incubators or accelerators.  Is it the model, the people. Who would you recommend apply?

Brad Feld:  I think we have had success with TechStars for a couple of reasons.  First I attributed all to the people that have been involved at two levels.  One I as I think David Cohen who runs it, is just spectacular.  If any of you have a chance to spend time with David or work with David it’s a magical experience. He is just that good.  Part of what he has done is he has attracted this incredible base of mentors in this really extraordinary set of partners – mainly the other Managing Directors – Katie Rae in Boston, David Tisch in New York, Andy Sack in Seattle and Nicole Glaros here in Boulder who essentially amplify him and work incredibly closely with the companies and really take them on as their own and are also extraordinary entrepreneurs in their own right.  So you end up in a situation where you have got leadership that’s just A-plus and get better with every program every year.  They are learning machines, they are constantly exploring and trying to understand what’s going on.

The mentors are very integrated into the program, so the program is not about the managing directors, not about anybody’s individual personality, but its really about the mentors and the companies working together and there is this intense facilitation dynamic between the two.  I think we also defined very clearly early on what success was. Success was a company that went into TechStars and three months later came out and was able to raise a solid seed round financing which is defined by us to somewhere between a quarter of a million and a couple of million dollars.  So we had a very specific success metric that we are focused on.  It wasn’t that the companies themselves would be acquired early or that they would have a certain amounts of customer adoption or anything like that, but that they would be in a place where real investors, angels and VCs would fund them.

And then last is I think we have been incredibly open about what we have done with TechStars.  The books like Do More Faster is one way of doing it. The results are open source so if you go to techstars.com/results we have open source of the results and everybody knows exactly how every company has done coming through and coming out of the program.  And we try to build real community around the whole thing. Its that philosophy I think that has really driven it.

The last piece that we did learn pretty early on, was that we were picking people to go through TechStars, not ideas.  And I think the first year or two we were too focused on ideas and not focused enough on people. So we had about seventy percent success rate in the first couple of years.  Once we realized that we needed to focus on people, the idea was much more of a filter. I think our success rates has gone up to about ninety percent at this point.

In terms of companies that should apply, its very interesting. It moves around a lot. So there was a perception with some accelerators that they are aimed at the young demographic or first time entrepreneur demographic or a company that hasn’t raised any money yet.  And our experience with TechStars is that it’s a much broader set than that.  So we have many companies that go through TechStars that have raised some money, some as much as a million dollars before they get into the program.  We have other cases where the entrepreneurs are on their second or third company.  We have some cases where the entrepreneurs are older and I would say the median age within TechStars is probably around thirty now rather than being skewed towards the early twenties.

It’s a pretty diverse set and I would say the person or the company that should apply is one that’s really interested in getting engaged with the broader community of companies in a very active way for three months, being surrounded by mentors that are going to be very relevant and very involved in their businesses, with the goal of coming out of the program and raising a seed round.

Question: (Punit Shah, Founder & CEO, Zazu, @punit279): What are the operational boundaries for technical and business founders especially the CEO should remain connected with product. 

So I think this moves around a lot. There are no specific answers. It is something that is tricky to negotiate.  I am actually going through this with a company right now that I am on the board of. The company is growing to about a hundred people from the founder and one other person.  The founder is the CEO and he has a full executive team including the VP of engineering. There is a lot of tension right now because the founder has reinserted himself in the product development process.  The company is doing quite well, but it’s missing on a couple of dimensions that the founder was very frustrated with. He couldn’t seem to get what happened at least from his point of reference, and so he drove back into the product development process. He realized that the engineering organization was excellent at building products but it was really lacking in the vision around the product. I don’t think anybody ever likes to hear that, but his view is that there was a case for him to be more engaged.  So the boundaries tend to be fluid.

I would say that if you have a team that’s only technical co-founders that the designating one of those technical co-founders to be the CEO and to deal with all the non-product shit is pretty important.  If you have a CEO who is non-product leaning CEO that’s okay, but that person still needs to be obsessed about the product.  But isn’t necessarily involved in building the product.  An example the company like that would be that I am an investor in Boston called Yesware where the two co-founders are Mathew who is the CEO, sales guy and Cashman who is the CTO, is the technical guy.  And Mathew is the obsessed about the product because he is the customer.  He is the one using it, but he really delegates the Cashman, the management and the build in the creation up front.

Question: Vipin Goyal, Founder & CEO, SideTour) What’s the best way to evaluate cultural fit in interview process that usually provides limited data points?

Brad Feld; Do things that get you more data points.  I think that the mistake that a lot of entrepreneurs, especially first time entrepreneurs make, is that  they are not rigorous enough on their recruiting process. Because if they over interview, then the person might get frustrated or bored. Or for some reason they might not be able to land them.  I actually think that entrepreneurs should be slow to hire, but be even more aggressive about the interview process.

Make the interview process have a lot of social dynamics in it.  When you add one person to a four or five person team, you really impact in the overall team dynamics.  So having that person once you get them past the first interview, have a company dinner, go out to dinner or go bowling together or do something together that everybody in the company enjoys that is social. Or do something at somebody’s house with significant others and see how that person interacts. Or if it’s a person who by definition is not going to respond positively to that kind of social dynamic, go do something one on one with them. E.g. A person who is an athlete and a runner, whoever in the company is a runner should go running with them.  Just get to know them sort of at a deeper level than just the work interview dynamic and don’t be afraid to do that over a period of time with some intensity.  If you find somebody that’s great that you really want, but you are not a hundred percent sure they fit culturally, dive on the top of that really exercise that aggressively in a short period of time.

Question; (Soumya Das, Founder Quikast, Bangalore)  For a Freemium internet consumer product, how do you get the critical mass of user base to make it viral.  Like Tout tried to get a video tweet from NBA basketball star Shaquille O’Neal, what are the kind of industry secrets there?

Brad Feld:  Well I think it’s a long list of gimmicks. You really need to two things. I talked about this earlier – a) one if signups, but the other is b) daily active users.  If you get a whole bunch of signups that’s nice because now at least people will at least come to your site for some reason.  But if you don’t actually create a situation where people are daily active users those signups are a waste.  So measuring those dynamic is important if you got a million signups and the day, two days after you have a million signups you have a thousand daily active users then you blew that situation where you were able to attract the million people.  There are, if you go down the list of gimmicks things like getting somebody well known to tweet out sort of the whole construct of social proof, the audience that you are going after trying to drive interest level from that audience is really useful.  But I think that the classical vital mechanic of having what you are doing be so interesting that your users will tell their friends to use it – that’s that most powerful.  So in a lot of ways, between having this gigantic flash of interest verses the steady build systematically day after day, week after week, I will take the steady build of active users a hundred percent of time.

Within that, there are really a couple of various specific things you need to do.

One is you need to actually authenticate your users.  Make sure that when somebody comes to your site they sign up. The sign up can be as simple as using Facebook Connect and capturing their e-mail addresses in the result of using Facebook Connect or can be a lightweight signing process.  It doesn’t matter, but just make sure that they sign up. There is a reason for them to engage with you longer term and just looking at your site and trying something.  Then once they are actively using your service or your product, give them ways within your product to message to their friends that your product is being used.  A great example of this for those of you that want to see just a beautiful user interface is Path and the download, if you haven’t downloaded the path on your iPhone download, it’s a beautiful application and it does an excellent job within the application of notifying you and other friends of yours that are on Facebook are now also on Path.  So that sort of dynamic where you are trying to get people either directly or indirectly to message their friends or notice their friends in some ways which will cause that to happen.

The last is – don’t be bashful about getting people to promote what you are doing within their own medium. So for example if somebody is a very active user of your service and it’s a business service, make sure that you are not bashful about saying to them “Hey look, I will give you a month of free service if you sign up ten new users.”  Dropbox for example did a great job of that. If you signed up a certain number of users, you got extra storage for free versus having to pay it. So it created that situation where existing users would tell their friends “hey use this” and the benefit to the user telling their friends “hey use this” was you got more storage space for yourself.

Pallavi Singh:  Also Brad, do you think we have time for one more question before you go?

Brad Feld:  Go for one more.

Question: (Anupendra Sharma, Founder, Startup Leadership Program): If the CEO obsesses over the product, how do you hire a product head and deal with possible conflict down the road.  Is this something you have seen before, and is there anyway you can do to ensure that this conflict doesn’t happen ?

Brad Feld:  I have seen it many times and I don’t think you want to ensure that it doesn’t happen, I think you want to encourage it.  I think a strong CEO and a strong product head whether that’s a VP of engineering or CTO or some other title, working on the product and being obsessed with the product at the vision level is great.  And I think the conflict is actually useful because it forces you to be more clear about what you are doing and why you are doing it.  I think if you view that conflict as a positive constructive force in the context of the company that’s a good thing.  I think the mistake some entrepreneurial CEOs make is they view that kind of conflict is bad and the fact that the product head is fighting with them over vision causes them to not be happy with that person or vise versa the product head feels diminished and says well the CEO wants it this way so I will just do it this way screw it whatever he wants or she wants I will just do it.  I think you can have very healthy conflict that drives you to a better outcome and I think that that is a – it can be a very powerful positive of course.

Pallavi Singh:  Well thanks so much Brad, it was great to have you talk too less.  I am sure you will continue to meet SLP fellows either through TechStars or Foundry or just in the entrepreneurial community in general.  We really appreciate your time hope to have you again next year and possibly even be involved with SLP when we reach out to Boulder.

Brad Feld: Awesome, call at any time and you all have my e-mail address again its brad@feld.com and give a shot.

Pallavi Singh:  All right thanks so much, Brad !

Closing note: The talk was organized and moderated by Pallavi Singh, SLP Boston 2012 Fellow, who is also the Founder & CEO of the BeaconIP.  This was the first ever global talk given to SLP and constitutes a historic moment for the organization. SLP is very grateful to Brad for making this happen.

BusinessInsider released a list of its favorite startups for 2011. We’re glad to see three fellows – Shaun So, Kelsey Recht and Vipin Goyal amongst those listed. Here’s some information on all three.

Cubby, founded by Shaun So (SLP NY 2012) offers a service that picks up your bags anywhere in New York for $10 and stores the bags for $7-12 per day. Shaun has been a bike messenger in New York, the U.S. Defense Department as an Intelligence Officer, and a policy analyst. He worked in Afghanistan and has over nine years of experience as a counter-terrorism and intelligence professional. His cofounder has worked in the real estate development industry. Between the two of them, they’ve got all the qualifications to make sure your bags are stored in a timely manner.Click here for Cubby

InstEvent was founded by Kelsey Recht (SLP NY 2012). Kelsey runs a website and a company that takes over all the headaches for arranging parties of any kind in the city. She describes it as a cross between AirBNB and Seamless. Prior to InstEvent she worked at Sears Holdings where she invested in retail start-ups and worked on business development and operations. Kelsey has a Kellogg MBA and a BA from Williams College. Click here for InstEvent

SideTour was started by Vipin Goyal (SLP NY 2011) currently founder & CEO , and is a venture-backed company that was in Techstars.  SideTour was born out of Vipin’s travels after Joost, where he was inspired to start a company that offers small unique experiences and tours around New York. Vipin worked in business development and strategy at Joost, MTV and McKinsey. He is a Harvard undergrad and a HBS MBA. Click here for SideTour

By: Zoe Peden

Fundraising – first rounds

First up was Jamie Murray Wells who explained that his company, Glasses Direct was funded on student loan and an early example of MVP and enough to show that the business model worked. He commented that working from a small amount of money really encourages you to focus

In the initial stages of looking for investment he was hesitate to take on too much friends and family investment so was very selective that it was capital they could afford to lose.

After friends and family he looked at angel industry in 2 sectors in 2005
1. professional angel networks

2. strategic angels – people you need to help with the business

He approached the latter and asked for advice rather than to invest. Angel networks are very underrated.

Venture capital stage

By the time Jamie knew he needed £3.5 m in series A funding he’d met most of the VCs around by networking at all the tech events in London.

He used advisors as it was his first time through fundraising and wanted to make sure he had the best structure in place. Business raised about £26M so far.

Jamie’s points to remember

1. In terms of how much to ask for, what does the business need to make the business stand on its own two legs. Enough to give the business a chance to prove itself. What is the minimum I can raise. That the PnL can sustain or a fundraising milestone.

2. In terms of giving away equity, don’t get too sentimental

3. Make rounds very competitive, many people take easy option and take what they can get.

4. Be careful getting locked into a seed funding too early.

Financials with Kingston-Smith

Richard Heap and James Kesner took us through the top sales mistakes they see when a company is trying to sell itself:

1. Weak 2nd tier management

2. No diligence on other side, too much own involvement.

3. Be in control of the process

They also gave us the structure of a good financial model
1. Fully integrated monthly model
2. Many deals fall down on forecasts – need to turn my quarterly into monthly for next 12 months
3. Cashflows and balance sheets
4. Opening position needs to be clear as does the time period

Common mistakes that they see:

· Make sure all your spreadsheets linked up!

· Better to go lower and overperform so do not fall at first hurdle and not hit first quarter

· Make sure got plan B what if scenarios

· What do we need, what do we need it for and what are you going to get out of it

Term sheets with Giles Hawkins from Orrick

Giles told us that a term sheet is basically an agreement to agree and its important to have it as full as you can. At the end of day investors are money managers who optimize the upside and protect the downside.

Giles recommended that you must have some provision in terms of option pool and if you see full ratchet in a term sheet strike it out!

One of the most emotional areas of the term sheet is founder vesting. If you leave within a certain time period lose most of your shares. This is the most negotiated term with VCs. Put time and attention to look at what triggers any loss. Try to have more than one deal on the table to avoid the worst.

Founder Vesting is normally over 4 years. 1st year lose everything. 2nd year 25%, 3rd year 25% etc . Recommend do it from beginning so can say in second round already vested for 2 years.

This blogpost is intended to share the experiences of a Fellow who joined SLP, started a company and raised a Series A round of financing.

The Setting
In 2006 I entered the Genetics Ph.D. program at Tufts University in Boston with two objectives: to understand science at the world-class level and to start my own company. Tufts would help me over the next four and a half years accomplish the first goal – culminating in my Ph.D. dissertation on Gene Therapy Strategies for Retinitis Pigmentosa – but with no formal business training or idea for a business, I was flying blind into entrepreneurism.

In Boston I quickly became aware of the start-up and venture capital arena, which was vastly different than the science world that I was accustomed to. I learned of a program for entrepreneurs that would
ultimately change my life and help me realize my second goal of starting my own company – The Startup Leadership Program (SLP).

The Startup Leadership Program in Boston By the time I wrote my application for the Startup Leadership Program class of 2008/9, I had already begun to formulate an idea for a business that would incorporate my passion for science and my desire to be an entrepreneur. I had met another Ph.D. candidate at Tufts, Brigham Hyde, who shared these passions and was equally motivated to realize these aspirations.

SLP was a game changer for my company Relay Technology Management, Inc. When I entered SLP, we had identified the unmet need in the marketplace to increase the efficiency of early-stage drug development, but had developed a business model that was limited by human capital and was neither scalable nor fundable. SLP immersed me with other entrepreneurs in Boston who were at various stages of the startup experience – some had companies that were already operating and were looking for outside investment, some were just getting going, other SLP fellows were enthralled with the idea of starting a company,
but were not yet sure what business to pursue.

The diversity of entrepreneurs in the SLP program, ranging from mobile to cleantech, to life science to computer science play an integral role in expanding our identification of a need in a marketplace to a
technologically-driven product company.

Beyond the “hard skills” workshops which taught the fundamentals of finance, accounting, and angel/venture investing, there were “soft skills” workshops that refined sales techniques, pitching to investors, and general leadership principles.

The Transformation
By the end of the 9-month program, SLP had transformed me from an aspiring entrepreneur to a focused and disciplined leader. Just as importantly, SLP had helped Relay become a technology product company
that was attractive to investors.

Relay has gone on to be award winning finalists in the MassChallenge $1M global startup competition with guidance from several mentors that I was originally introduced to in SLP including Venture Capitalists
Richard Dale and Anupendra Sharma. Relay was also, the first SLP startup to receive a “Helping Innovators Thrive” award for free legal services at Edwards Angell Palmer & Dodge which gave us tens of thousands of dollars worth of free legal advice thanks to Richard Kimball who supports SLP, and Relay was fortunate enough to be a part of DogPatchLabs in Cambridge run by Gus Weber and Polaris Ventures.

The SLP Network
The network that SLP provided was invaluable. I received mentorship from life science entrepreneurs who had successfully grown and exited companies, and had the opportunity to speak with Desh Deshpande – who
gave a passionate speech to SLP that I will never forget. The SLP network also benefited Relay. We were introduced to one successful life sciences publishing entrepreneur through SLP. I asked him to join our board, and he was critical as he made the introduction to a large multinational on our behalf that would eventually lead to our Series A financing and strategic partnership. The importance of a solid advisory board cannot be understated. As an entrepreneur your advisory board can validate your company to
investors, make introductions to potential clients, and offer invaluable advice from people who have talked the talk and walked the walk. One key lesson I learned at SLP was the importance to “close
the loop” with every email and introduction. I learned the importance of always thanking individuals for their time, resources and introductions, even if nothing results immediately.

To say that SLP played a role in my personal growth as an entrepreneur and leader is an understatement. SLP did much more for me (and my company) than I can ever give back – nonetheless you will feel compelled to give back to the program that helped make you and your company a success. Guy Kawasaki says it best, “you have to be a Mensch” –to give back as a part of the process. SLP is an amazing experience and can help entrepreneurs at any stage learn from the best and realize their dreams. An organization that gives you more than you can ever return, but will teach you lessons that will help you change the world.

____

Dave Greenwald, Ph.D. is a 2009 SLP Fellow and co-founder and CEO of Relay Technology Management, Inc. You can follow Dave on twitter at
@drdg007 and read his blog at davegreenwald.com.

Today we had a class focusing on the finer points of putting together a team and bringing in the right talent. The session started with a talk from Craig Driscoll from Highland Capital Partners, who discussed the top 10 things to take into account during this process. Great presentation so I followed up and will be meeting with him tomorrow to get some more specifics what to look for at our specific point in development. Specifically how to identify the right talent that will also work for equity since we are as still bootstrapped.

After Craig we went over a case put together by our fearless leader, Anu Sharma. It was interesting, but not much to report here as most of you will be going over the same case. After Anu, we heard from three former SLP fellows about the trials and travails of putting together a founding team. This was a great segment moderated by Mr Jared Chung, but we were all sworn to secrecy, so can’t go into too many specifics. Basically, make sure you have the four D’s addressed beforehand and know what each founder wants to do with the company (long term growth or quick flip). The four D’s in case you were wondering are Death, Divorce, Dissolution and Decisions. These are all clauses that need to be laid out in the founder’s agreement to prevent ugly disputes and wasted time later on if something happens.

The last two talks were a little more on the HR side of things, with a Robert Young from Edwards Wildman and Lauren Celano from Propel Careers. Robert discussed the legal ramifications of hiring individuals and how not to screw yourself. Lauren went over some of the more basic nitty gritty of how to ensure that everyone is happy. Due to time constraints (as usual), these talks were cut short before all questions could be addressed and the two speakers were kind enough to take some time out of their evening to join us for the customary after-meeting drinks at Top of the Hub, which I haven’t been to since my Junior Prom. Took me back a few years!

John Moore III