The ideal team look for integrity energy and intelligence marten mickos

The ideal team: look for integrity, energy and intelligence

Today’s guest post is from Marten Mickos.

The most unlikely teams may soar to the most amazing success. For that reason, it’s not easy to define the ideal startup team. Here is what can be seen over and over again in successful teams:

  1. Each member of a winning team puts the success of the enterprise above the success of themselves.
  2. They have shared values and divergent opinions. They learn and adapt as a team.
  3. Everyone is passionate about customers. Each member of the team is focused on making the company’s customers successful.
  4. The entire team loves strategy development. Everyone engages in discussions about vision, purpose, strategy and also short-term goals.
    From the passion for customers (#3) and the passion for strategy (#4) comes the ability to develop the value proposition, the product and market fit and a useful business model – things a startup must get right in order to start scaling.
  5. At least some but rarely all are strong leaders with an ability to hire, inspire and retain great talent.
  6. Everyone and everything is action oriented. Stuff gets done. Everyone in the team knows that the five points above are worth nothing unless accompanied by execution. The execution is quick and precise.

FishArrow-e1444933564399-1024x655

When you are building a team, look for integrity, energy and intelligence, in that order. Those three characteristics are the foundation of success. Only people with high integrity will put the success of the enterprise above the success of themselves. Only people with high integrity can make teams with divergent opinions productive. Without energy things happen too slowly, and quality deteriorates. Worse, low energy is a predicament that negatively affects the surrounding team. Treat the word “intelligence” here in the broadest meaning: presence of useful skills combined with an ability to quickly learn more.

Within the scope of integrity, energy and intelligence, hire for strength. This means that you should look for people with the particular strengths that the team needs, and then make those strengths productive. You can always work around the weaknesses, and you must do so as everyone has weaknesses. Don’t try to hire “well-rounded” people with few weaknesses, because then you will get few strengths. Look for strength. Look for that unique talent that will make a huge difference for your company, and be prepared to then manage around everything else. But although you will tolerate weaknesses, never tolerate deviation from the core values of the organization. A weakness in a particular skill is a tactical problem that can be solved. A weakness that shows up as a deviation from the organization’s core values is not fixable. Do not hire people who do not subscribe to the values of the organization.

Be aware of the “non-vital positives”. Most people have a set of strengths and accomplishments that look and are good, but are not vital for success. Having attended a top-rated university or worked for a famous company is such an example. Nothing wrong with that, but in itself it proves little. Being well spoken is another. It’s a useful skill, but it’s not among the top 10 requirements. Knowing the same people or being member of the same club is another example. Nothing wrong with it, but it is not a defining characteristic. You should just hire for the specific strengths that you know the company needs.

Finding the right mix of culture and values is difficult. On the one hand, there must be shared values in the team. On the other hand, diversity and divergence in opinions is absolutely vital for sustained success. Don’t hire people who are like you or think like you. Hire people who are unlike you, but who share the few core values that you have stated as the cultural foundation of the company.

Hiring the people is just the first step in building a world-class team. After hiring, you start making the strength you hired productive. The best guidance on this can be found in Peter Drucker’s book the Effective Executive, in the Making Strength Productive chapter:

“The effective executive makes strength productive. He knows that one cannot build on weakness. To achieve results, one has to use all the available strengths—the strengths of associates, the strengths of the superior, and one’s own strengths. These strengths are the true opportunities. To make strength productive is the unique purpose of organization. It cannot, of course, overcome the weaknesses with which each of us is abundantly endowed. But it can make them irrelevant. Its task is to use the strength of each man as a building block for joint performance.”

As you build the ideal team, don’t lose sight of building yourself. No one is ready – ever. We have to keep managing and developing ourselves. We may think that we cause change in the organization by changing others. It is true that we can influence others. But the real source of change is within ourselves. If you want to make a change in the team or the broader organization, start with yourself. Set the bar high for your own development and improvement. But also be patient with the outcome and remember to appreciate and support yourself as you evolve. Focus on your own strengths, and ask your team to help you manage around your weaknesses.

An ideal team is a rare occurrence. When it happens, it is the crowning of all your efforts as the leader. When a good team becomes a great team, the whole company rises to a new level of performance. Everyone knows that you can accomplish anything together. It is a feeling of enormity.

This post was originally published at School of Herring.


MartenMickosMarten Mickos | @martenmickos

Marten Mickos is a Silicon Valley entrepreneur and business leader. The knowledge he shares has been gathered first-hand through his various experiences of utter failure and smashing success. As the CEO of MySQL he pioneered open source software and built a company worth a billion dollars. At Eucalyptus he recovered strongly from near-fatal hardship. As SVP at Sun Microsystems and Hewlett-Packard he has experienced leadership at the largest scale. He is a Silicon Valley Finn passionate about leadership and disruptive businesses in an open and distributed world.

 

Oracle and BootstrapLabs Insider

Oracle Inspiration Tour 2015: a morning with BootstrapLabs

As part of Oracle OpenWorld 2015 this week, Oracle France organized a 5 day “inspiration” tour of San Francisco/Silicon Valley for about 30 French corporate executives. After visiting some of our friends at LinkedIn, Lending Club, and Uber, the group spent Tuesday morning with BootstrapLabs at our San Francisco offices.

Ben_Oracle_InspSettled in with coffee and pastries, the group met with Ben Levy, BootstrapLabs co-founder, who spoke of his journey as an entrepreneur, our work at BootstrapLabs, and the economic impact of venture capital, and the unique role that Silicon Valley plays in terms of innovation, disruption and growth.

Ben2_Oracle_Insp

 

 

 

 

 

 

Oracle_inspThe executives from Alcatel-Lucent, Kering, Lafarge, Ubisoft, Société General, and other top French firms, had plenty of questions about how the changes we see here in Silicon Valley will affect the large corporations they run, with concerns about mobile apps, SaaS, financial systems and customer relations leading the way. Ben shared some facts and figures, as well as concrete examples of why collaborating, innovating and adapting to the changes that we see firsthand here in Silicon Valley are crucial to global companies.

 

As the event concluded with presentations from five startups that are working in the areas of transit, retail, collaboration, marketing, and sales, our visitors left to continue their tour and gather more inspiration.

Oworld2015

AngelList The Worlds First On Demand VC-as-a-Service Platform

AngelList: The World’s First On Demand VC-as-a-Service Platform

beGobal Panel with Kevin Laws1

[Disclaimer: BootstrapLabs is an investor in AngelList and we have two syndicates, BootstrapLabs Syndicate and BootstrapLabs A+ Syndicate with Gil Penchina]

Last week I had the good fortune to find myself interviewing Kevin Laws, the COO of AngelList just a few days after they had launched a series of announcements that sent tremors through the entire startup and venture investment ecosystems:

  • Launched CSC Upshot: a new $400M seed fund dedicated mostly to early stage startups and syndicated deals on AngelList; which comes in addition to the existing Maiden Lane’s $25M fund launched in April 2014
  • Opened-up its backend infrastructure to offer “SPV as a Service” for angels and VCs interested in capturing pro-rata and/or additional carry on their best deals, across stages
  • Pushed its iOS App for its “joblist” marketplace

First of all, let’s briefly cover what came out of my fireside chat:

BL_KL_beGlobal_2015

  • AngelList is trying hard to stay in love with the problem they set out to solve when they first launched: “How do we help founders (globally) focus on what matters most, which is building their company and products, and spend less time fundraising?” You can sense that they have made this problem a core value at AngelList.
  • We argued that cross-border angel investing would not be possible without online platforms like AngelList, bringing both sides together (founders and angels), yet maybe more importantly without a trust & expertise based syndication model that aligns everyone’s interest, removes significant friction in the decision process (“emotional friction”) and ultimately building technology and processes to close the transactions (“physical friction”). Among the new stats shared by Kevin during our talk, he said that 10% of the capital invested online on AngelList was from outside Silicon Valley, while only 3% of completed fundraising online was for companies outside of the US. The new fund will definitely give a huge boost to the foreign capital percentage number above, unless they classify it as a US fund, event though it is backed 100% by Chinese capital.
  • Kevin placed the number of startups on AngelList at approximately 300,000 with  30,000 or 10% of them being in fundraising mode at any one time. In one sense, the odds of being “discovered” on AngelList are much better than they were in the Apple Store as of June 2015. There were over 1.5M apps, but the syndication of your round by a well known angel investor in Silicon Valley remains your best shot to stand out (kind of your equivalent to being featured by “Apple” in the store). The interesting bit for me was that this was still holding true for foreign companies trying to fundraise on AngelList. Kevin used the example of Descomplica, a Brazilian online education startup that raised $5M in February 2014 from Social+Capital, and used a syndicate led by my friend Lee Jacobs, a local angel investor with ties to Brazil, to ignite the fundraising on AngelList. Lee was also the very first to do a syndicate on AngelList so he gets pioneers’ points in my book :). Kevin also makes a very important point on the video below…you can invest anywhere but you might not be able to get your money back everywhere! Let us not forget that over 80% of technology M&A deals happen in Silicon Valley (buyer or seller is located there) and the last time I checked, corporate sales were responsible for 95% of the return of capital for VCs.

You can find a “meerkat” version of the interview here for now and I will upload a professional version from beGlobal as soon as it becomes available.

Now on with my two cents on their recent announcements:

CSC UPSHOT FUND

Some dubbed it the world’s largest seed fund and it sure is an impressive amount, but read the fine print. You realize that the investment thesis is broader…you are talking about investing in top startups (based on their metrics and syndicate leads) not just in Silicon Valley, but globally with the ability to do pro-rata and access later stage opportunities too (which are now facilitated even further due to their new SPV product). As I mentioned on stage, it takes a “Chinese billionaire” to have the humility to say “I do not have access to Silicon Valley deal flow, nor may I have the skills to vet it, but I sure can get some of the smartest people in the business to discover, vet, and syndicate some of their best deals for me, as well as secure access to follow-on funding via pro-rata rights and SPVs.” I am convinced that many institutions and family offices that invest in venture have been asking themselves why they did not think of it before, how maybe they just needed a lead to follow.

 

FREE ONLINE SPVs FOR ANGELS & VCs SYNDICATING LATER STAGE ROUNDS

This part did not grab the headlines, but this is probably the submerged part of the iceberg in my own opinion. By opening up its backend infrastructure and making these online SPVs free for Angels and VCs ($10K admin fee is spread among the LPs and AngelList does not charge any carry), AngelList is getting 3 very significant benefits:

  • they are getting all the LP contacts
  • they are accelerating the growth of their funds under management, and  
  • last but not least, they are capturing performance and return data at the source

This is by far the most significant announcement AngelList made that day for the future of AngelList.


“JOBLIST” iOS APP

If fundraising is among the top pain point of founders, recruiting talent is probably way up there as well, so it is only natural that AngelList spends a significant amount of time and capital improving its job marketplace product. It will also over time become a very strong competitive advantage and barrier to entry as “startup” skills and know-how are in very high demand across the world. There is also a very natural and synergistic relationship between fundraising and hiring since most $ startups raise goes to hiring more talent!

At BootstrapLabs we ask all our portfolio companies to create and maintain an up to date AngelList profile as a way of communicating with their stakeholders, including future employees.

Thank you to Kevin and the team at beGlobal for providing me with the opportunity!

So long and happy investing.

 

Presentation used by AngelList for their PR announcement

 

About Ben Levy


Twitter | LinkedIn

BL ProfileBen is the co-founder of BootstrapLabs, a Venture Investment Company that invests capital, experience, and skills into disruptive software companies from around the world, and helps their founders relocate to Silicon Valley to build BIG. Born in France and living in Silicon Valley for the past 17 years, Ben is a repeat entrepreneur who launched, built, and exited two startups in the financial technology space, one to Mergent, and another one to SecondMarket, who was recently acquired by NASDAQ.

He has also helped founders raise over $300M of capital from Venture Capitalists and Private Equity Investors and closed $5B worth of technology M&A transactions as an investment banker earlier in his career. He is a frequent speaker on innovation, investing, technology, entrepreneurship and globalization.


 

nicolai_lund

BootstrapLabs at Innovation Skåne – Advice for Swedish entrepreneurs

nicolai_lund

Lund, Sweden | Wednesday 21 October 2015

In a room full of entrepreneurs, BootstrapLabs founder Nicolai Wadström shared his thoughts on Silicon Valley unicorns, and the speculation of tech bubbles and overvalued startups. He reminded his audience to focus on value, and the fundamentals of the companies being touted as Unicorns.

Read more

image1

Event with Connect Angel Network in Malmo at Minc: Unicorn Factory/Leveraging Silicon Valley

ConnectNicolai Wadstrom, Founder and CEO of BootstrapLabs will share with Swedish entrepreneurs, local angels and the Connect Angel Network and Minc community his journey with BootstrapLabs.

mincAttendees will also receive valuable insights and learn how companies like Prezi scale from a small office in Budapest to a 300+ people company in Silicon Valley.

A guaranteed dose of inspiration will be provided to all the attendees!

Prezi Presentation from the Event

PICTURES FROM THE EVENT

image1

image2

SPEAKER

Nicolai Wadstrom Founder & CEOBootstrapLabsNicolai Wadstrom, Founder & CEO of BootstrapLabs

Twitter | Linkedin

Nicolai Wadstrom, a serial entrepreneur turned parallell entrepreneur as the founder of BootstrapLabs, a Global Venture Capital firm based in Silicon Valley. Nicolai advises all portfolio startups in their day to day operations, connecting founders with industry experts, advisors and investors to increase their likelihood of success, assisting with product design and development, positioning, go-to-market strategy and implementation, partnerships and fundraising.

Multiple time Startup CEO, CTO. Raised capital from Angels, Private Equity, Investment Banks and VC’s. Angel investor and adviser to Internet, Software, Mobile and Digital Media startups in Europe and Silicon Valley, including BootstrapLabs portfolio companies such as Prezi, Zerply, Audiodraft and Witsbits. Nicolai has been writing code since he was 10 years old, and still speaks Java fluently. He is very focused on product and technology development within the Big Data, Analytics, Internet, Mobile and Software/Cloud sectors. Nicolai is a frequent guest speaker, mentor and judge at Universities and Conferences in the US and Europe.

Asian Brand Strategy - Revised and Updated - Martin Roll - 6

Are You Ready To Build Your Start-Up Brand Early?

Today’s guest post is from Martin Roll.

I am often asked when entrepreneurs, start-ups and younger companies should start to build their brands. The implicit impression by those asking is that branding and brands are for later, not in the early stages. I could not disagree more. The earlier you start it, the better chances of scaling and globalizing your brands. People don’t buy products and services, they buy brands.

Building and sustaining brands are not a luxury for entrepreneurs and start-ups, it has become necessity in order to compete in a globalized world where brands play an important role in building strong market positions and driving value.

The emergence of global Asian brands and the bold aspirations by Asian leaders should serve as great inspiration for entrepreneurs and start-ups as illustrated in the following.

The rise of Asian global brands: From “nice to have” to “need to have”

An increasing number of Asian brands are becoming successful well beyond Asia. But with two-thirds of the global population, growing economies, a rapidly growing middle class with an increasing disposable income, Asia still boasts only a handful of powerful global brands which is a cause for concern, and a great untapped opportunity.  But given the size and volume of Asian business today, it is evident that Asia could build many more prominent brands and capture more financial value from better trade power, price premiums, customer loyalty and other important metrics.

Building and sustaining brands are not a luxury for Asian firms any longer, it is a necessity in order to compete in a globalized world where brands play an important role in driving value.

Therefore, in an updated and revised edition of the bestselling book Asian Brand Strategy, I have provided a comprehensive framework for understanding Asian branding strategies and Asian brands, based on new research and supported throughout by a wealth of new case studies from several Asian countries.

Asian Brand Strategy provides insights, knowledge, and perspectives on Asian brands and branding as a strategic tool, and provides a comprehensive framework for understanding Asian branding strategies and Asian brands, including success stories and challenges for future growth and strengths.

Asian Brand Strategy includes theoretical frameworks and models and up-to-date case studies on Asian brands, and I believe it is a must-read for Asian and Western business leaders as well as anyone interested in the most exciting region of the world.

Will Asian companies challenge the global brands?

Several indications show rapid progression in the right direction for a selection of Asian companies where branding as a strategic tool has become more recognized and accepted in their boardrooms. This is also driven by the increasing attention on branding and its value-driving capability among stakeholders, media and opinion makers across Asia.

Asian companies can have great intentions and aspirations to move up the value-chain through branding to capture the financial and competitive benefits, but to achieve these objectives successfully, Asian companies must follow a comprehensive brand strategy framework supported by a systematic process throughout the organization.

Successful implementation of these processes will help Asian boardrooms to better compete in the global marketplace, and in achieving sustainable revenue and cash flow streams for the future.

In my book, I use the Asian Brand Leadership model to illustrate the paradigm shift that Asian brands need to undertake in order to unleash their potential:

First, mindsets and practices need to change in Asian boardrooms. Asian Brand Strategy invites a complete shift in the way that Asian boardrooms think of branding:

  1. From a tactical view to a long-term, strategic perspective
  2. From brands viewed primarily as advertising and promotion to brands as strategic assets
  3. From fragmented marketing activities to totally aligned branding activities linked to business strategy
  4. From a vision of branding as the sole responsibility of marketing managers to branding as the most essential function of the firm led by the CEO, CMO and board room

Second, this new perspective must be grounded in in-depth understanding of consumer behavior patterns. Asia is not a homogeneous entity. More importantly, Asian countries are more and more traversed by cultural flows permeating the region: cinema, music and fashion trends that at present extend beyond national borders to capture the imagination of millions. Branding and brands do not operate in a vacuum; they are closely linked to developments in society, to people and cultures.

Third, managers wanting to succeed in Asia need to abandon the oriental Asia of the past. Asian consumers are all vying for an Asian type of modernity that has nothing to do with colonial imagery.

Fourth, to create iconic brands, Asian managers will have to become trendsetters. The perspective developed in Asian Brand Strategy is that, in order to be successful, Asian brands need to capture the spirit of the region, and lead the way by creating that spirit.

Finally, this shift can be achieved only if everybody in the company is convinced of the power of branding. This, in turn, can only happen through accountability and systematic monitoring of branding investments and performance. Organizations that utilize data-driven decision-making are more productive and profitable than their competitors.


Martin Roll - Business & Brand Strategist - Martin Roll Company - verticalMartin Roll | @MartinRoll

Martin Roll delivers the combined value of an experienced global business strategist, senior advisor and facilitator to Fortune 500 companies, Asian firms, family-owned businesses and start-ups on how to build and manage strong, global brands as well as leadership of high-performing, marketing-oriented businesses. He is very experienced in engaging and advising clients at all management levels from business owners and C-suite leaders to functional staff across multiple industries and cultures. Author of Asian Brand Strategy.

How to Milk a Unicorn... No Really, How

How to Milk a Unicorn… No Really, How?

Victoria Silchenko recently posted an article on LinkedIn, Confession of Venture Capitalists: How to milk a Unicorn where she interviewed some high profile VCs and Private Capital experts on the recent “private IPO” trend. Great topic, catchy title and excited that BootstrapLabs will be joining the discussion live at her upcoming Global Alternative Funding Forum on November 6th in Los Angeles. Don’t miss it!

Having lived in Silicon-Valley for over 16 years as an entrepreneur, investment banker and tech investor, I have had the privilege to work with David Weild, count Will Bunker among my friends and co-investors, and have met with both Tim Draper and Andrew Romans.  And I cannot help but wonder what the impact of these billion dollar companies going for Private IPOs will be on the liquidity cycle of Venture Capitalists.

I will skip some of the basic premise nicely outlined (or should I say revealed) by David Weild on his research paper, Why are IPOs in the ICU? and outline some of the basic benefits provided by standard IPOs:

  • Public visibility with main street on a global scale,
  • Increased trust with partners and providers,
  • Promise of cheaper and faster access to capital to grow the business, make acquisitions and attract talent,
  • Ability to offer liquidity to existing investors that had supported the company until then (average startup age at IPO is 7+ yrs lately, and trending up) as well as employees. These liquidity events do not happen at the IPO stage but usually during a Follow-On (FO) offering, as main investors and management teams are considered insiders and are under lock-up agreements for 180 days post IPO (and subject to trading limitations thereafter).
  • Promise of rapid stock price appreciation driven by company’s growth and positive wall street analyst coverage

Now, let’s take a look at the benefits provided by “Private” IPOs:

  • Unicorns are enjoying tons of (free) publicity, which could certainly qualify as the equivalent to going “public” from a notoriety stand point,
  • While a lot less public (financial and operational) information exists about these Unicorns due to their private status, it is fair to assume that partners and customers alike are more inclined to provide them with the same level of trust, credibility and most favored nation terms as if they were publicly listed companies,
  • In the current market, one could easily argue that you can raise faster, cheaper and even more capital in the private market if you are a Unicorn vs. a company filing for an S-1; and the best part of it is not being subjected to daily Wall Street scrutiny as Twitter has painfully experienced in recent months,
  • This one gets interesting. There is little information out there but these large “Private” IPO rounds often include some – at least partial – liquidity for the founders, early investors and sometimes employees. The average Unicorns’ age is about 9+ years according to Beau Laskey at SVB , which is longer than the life of most VC funds. As such, it should come as no surprise that VCs, especially the ones that came in early, would seek liquidity in those later stage mega rounds.

Unicorn are not overnight successes. As the saying goes in Silicon Valley, Overnight Success takes 10 years! 

 

BootstrapLabs-SVB-investment

BootstrapLabs-SVB-investment

 

  • Valuations are sky-rocketing in the private market once a company reaches Unicorn status…and one has to wonder if it is due to sheer speed of execution and the breath-taking growth rate experienced by these startups, or a demand driven phenomenon where every deep pocket investor wants to ride this rising giant sooner rather than later, and deploy a large chunk of capital into it for a 1.5-3x return. These returns sound really good, especially when you are able to deploy over $100M at a time after some of the major risks appear to have been removed. In comparison, public market returns have eroded and it is getting harder and harder to find alpha at scale.

Unicorn Valuation Surge in the Private Market:
This is a one year old chart: Uber is now worth $10Bn more! 

Valuation Surge

 

Are Later Stage Investors Valuation Insensitive Due to their Preference?

Andrew Romans had an interesting point in Victoria’s article in that the last money in gets liquidation preference (and sometimes anti-dilution protection in the event of a down round). That would basically make those investors valuation/price insensitive as they would get their money out first in case of trouble and that the valuation of these companies would likely not fall below their investment amounts to begin with. But in case of Qualified IPOs, these liquidation preference would go away and even if the opening price is higher than the last round of funding valuation,  nothing would prevent the stock from tumbling down. See this good post on IPO down rounds.

 

Are Insiders Allowed to Lock-in Profits Quietly?

Another risky dynamic at play here is the liquidity provided to insiders as part of these later rounds. In a public setting, if an insider sells his shares he would need to disclose it to the public; but in those mega rounds of financing,  only major investors are posted on the transaction structure, leaving out of the loop a lot of people inside and obviously outside of the company. Wouldn’t you think that knowing that the founder(s) of your company have locked in some of their gains would be important news?

 

Potential M&A Suitors Evaporating by the Minute

While M&A still represents between 90 and 95% of the return on capital for VCs, the list of potential acquirers for Unicorns is shrinking by the minute as their valuations are significantly higher then those of the very incumbents they seek to disrupt. As an example, Group Accor ($9Bn market cap.) can no longer buy AirBnB ($25Bn).

1B Exit ChartBn Exit vs Valauation

Ultimately the Losers are Public Institutional and Retail Investors

Maybe a good way to look at what is happening is by drawing a chart with valuation against time, with a typical Unicorn curve, pre- and post- IPO.

private vs public

In that context, it is pretty clear that a lot of the growth and value that was once captured by public investors (including you and I as retail investors), is now being captured by the late stage growth and cross-over investors, while increasing the risk/return profile of Unicorns in the public market once their valuation has been “maxed out” in the private market.

VC firms are flushed with $75Bn of dry powder
so you can bet they will want to party on!

VC Overhang

I remember ringing the bell at the NYSE in 2009 with my startup InsideVenture, for the launch of our new product, dubbed “HPPO” for Hybrid Public Private Offering. At the time, VC-backed IPOs and Wall Street in general had ground to a halt after Bear Stearns and Lehman went down. We talked about ways to fix the IPO market and “orderly transition” of the cap table with top VCs such as Ray Rothrock from Venrock and Scott Sandell from NEA.

Ringing the Bell in 2009 at the NYSE for our Product Launch:
HPPO – Hybrid Private Public Offering

NYSE_HPPO

With new regulations such as Reg A+, allowing private companies to crowdfund up to $50M and trade their shares on secondary markets, it looks like the future might be just that, a world where public investors are finding their way back into ventures, earlier in the growth curve!

As Bill Gross told us last Thursday, “Timing is everything”…we were just 7 years too early!

DreamForce & BootstrapLabs Event in SF

There are about 150,000 extra people in San Francisco this week. Once again it is time for DreamForce, Salesforce’s annual conference for customers, vendors, and developers.  Billed as “the premier event in the tech community” and San Francisco’s largest tech event, DreamForce attracts people from around the world.

On Monday, we hosted a Silicon Valley Insider program for a large group of French business people who were here for DreamForce. Representing companies such as Accor Hotels, Pernod Ricard, SNCF,  and AXA, these senior managers and executives wanted to get behind the scenes introduction to Silicon Valley before heading off to the exhibits, workshops and after-hours parties.

Ben_DF1 - 1

BootstrapLabs’ co-founder, Ben Levy, started the morning with a presentation titled “Silicon Valley: Unicorn Factory”. Ben covered topics such as disruption and innovation, explaining why what happens here in Silicon Valley is not yet replicable anywhere else in the world, and why creative entrepreneurs are still motivated and obligated to come join this vibrant and exciting ecosystem. At BootstrapLabs we have been talking about many of the important trends we are seeing – IOT, FinTech, and the Future of Work – and Ben shared some interesting facts and stats, stressing the importance of execution.

Ben_DF2 - 1        Doz_DF - 1

The event for our French visitors continued with some short presentations from startup companies working in location tracking technology (Navisens), on demand marketing software (Doz) and supply chain security solutions (Vantage Point Analytics). We concluded with a presentation on data science, and the need for more trained data-scientists to manage, understand and derive business metrics from all the “big data” that is being created daily. As they heading back into the crowds of DreamForce, the attendees of our program left with a better understanding of the technology, startups, and investors that come together to make Silicon Valley happen.

dreamforce_bus

tumblr_inline_nug2s9bNYK1rmqlis_1280

5 skills founders better verify before deciding to add a core team member

Today’s guest post is from Tommaso Di Bartolo.

Startup is an amazing crazy ride. Unlike corporate business, every moment in startup makes you remember you live because of the thrilling paths and the amount of emotions you experience. The most compelling phase in a startup is the period of time before the product finds its product-market-fit. The time where you think you know what problem you are solving – but the market is not reacting the way you thought and the value you offer still hasn’t been proven out. This occurs usually in the third phase – out of four – of a startup life cycle. It’s the phase where the vision is being squeezed, where getting funded is hard if there isn’t enough traction, where releasing a sexy product is challenging if the right people aren’t on board, and the time where adding the “right core team members” is tough. But what does “the right” people mean in this case? What are the key attributes, skills or even qualifications the handful of key people you’ll call core team members will have?

Once upon a time, there were 3 friends that met at Stanford: a computer science engineer, a design guy and a business grad. During lunch time on a spring afternoon they, all together, came up with an idea, the prototype of which they released short after. They easily got traction and therefore funding from TOP Tier investors on Sand Hill Road. With the money they hired a stunning team, invested in developing a great working product which scaled globally and were acquired only 36 months later for a $1B …

… and then we all woke up … good morning!!!

The startup ride is a very turbulent one and “luckily” not for everybody – otherwise we would have even more competition ;-). Often we read about “overnight” successes – but it only was overnight for those who were not part of the journey… as stories like the one above don’t exist! Nor are most of the startups representing an “A-Team” that have already done it before. More often, early stage startup teams are a bunch of inexperienced hustlers, hackers and hipsters driven by the sentence to “change the world”, and more than 50% of them split up within the first 12 months… that’s where the shit hits the fan. Now, only teams who’ll write the most painful stories actually really make an impact. But what is it they do differently?

Startup Mindset goes over Education

While upcoming entrepreneurs have guidelines on how to build a lean startup or how to build a demand engine for products – there’s a lack of blueprints for how / what to consider to put the right people together, and therefore we underestimate the importance of how much business relies on relationships and their communication. And that behind every “tongue”… there is a mindset that is responsible for letting us do things the way we do… or simply don’t do. Mindset is often the make or break deal, especially in the early days. In other words, the people’s strength of mindset is what at the end makes a startup succeed or die. It’s what makes startup teams keep fighting and finding ways, or give up.

After 15 years of entrepreneurial experiences on three continents and four startups, I’ve learned the hard way that core team members’ soft skills were more important than their educational background. While I’m not saying that education doesn’t matter, make sure specific characteristics within core team players exist, especially during the initial delicate phase where things are not settled.

The biggest “bug” in an early stage startup is a “mismatched mindset” – Tommaso db

Watch out for genes – not qualifications

There’s a difference between the way you recruit a CFO for when you are scaling business and between “handpicking” a Senior Backend Engineer for an early stage startup. For the CFO you mainly consider qualifications, experiences and assure yourself with reference checks. For the Senior Backend Engineer the story is quite different. In an early stage startup it might be the case that you do have an MVP – but still not enough traction to prove assumptions and enchant with business success. Or – like in many early stage startups – you don’t have deep pockets and sweat equity is the compensation model to go to.

Even though on one hand your funds might be low and the pressure to move ahead with product development is high, you better make sure the person you decide to add as a core team member qualifies mindset-wise – before you match educational skills. This helps you avoid investing time and creating expectations with a candidate that sooner or later might leave if their mindset simply doesn’t fit. Don’t let circumstances hurry you on everything you are doing or pressure your decisions.

Don’t delude yourself because of an educational background or due to lack of options  – but seek for genes that are crazy enough to go through the real side of your daily business.

…continue reading “5 skills founders better verify before deciding to add a core team member” on Tommaso’s blog WhatItTakes


tommasoTommaso Di Bartolo | @todiba

Expert in Residence, BootstrapLabs and CEO at swaaag.

Tommaso is a serial-entrepreneur with 2 exits, an advisor & an angel investor. He lives with his family in Silicon Valley.

Learn how to be a successful Angel Investor

Learn how to be a successful Angel Investor!

Learn how to be a successful Angel Investor

The venture world is changing profoundly and over the next few months we will see a huge increase in “big” seed stage (Pre Series A) deals.

As Ben Levy, co-founder of BootstrapLabs, mentioned in his recent blog post “Seed is the New Series A”, we will over time see more and more seed stage investors creating syndicates and inviting fellow angels to co-invest in their deals.

The number of angel deals, crowdfunding platforms and micro VCs is growing dramatically.

Number of active Micro-VCs

Number of active Micro-VCs

*the majority of these funds of this size are closed without any traditional institutional LP backing. Source: CBInsights; graphic BootstrapLabs.

Learning the ins and outs, strategies, and best practices needed to be a successful angel investor is not easy, but here are a few steps you can follow in order to get started in this exciting new world of “private is the new public”.

Angel investing is often considered by many people to be like a poker game, but with the new market structure and the emerging models of crowdfunding, I believe that Angel investing is becoming more of a team game than a solo gambling endeavor.

One of the most important steps for an Angel Investor is gaining access to quality investment opportunities and spreading their risk by diversifying investments (into a minimum of 10/15 deals if you are active and closer to 30 if you are passive). To invest in 10 good deals you should meet and evaluate at least 100 startups, and this is not easy thing if you are doing angel investments on the side!

You should probably not make 10 investments at once or in a short time span by the way…each deal you invest in will teach you something, and you definitely want your later deals to benefit from your early ones.

This is also why joining a syndicate on a crowdfunding platform or investing alongside or in a Venture Capital fund is recommended. Participating in deals with experienced and expert investors will reduce your risk and save you the time of doing due diligence.

In any case, if you have not already done so, the first thing you need to do to become an angel investor is to verify your Accredited Investor status for a variety of reasons, not the least of which is to make sure the startups do not get into hot water with the SEC for selling private securities to “naive” investors.

To be an Accredited Investor you need to be eligible with one of the following criterias:

  • Individuals with annual income over $200K (individually) or $300K (household) over the last 2 years and an expectation of the same this year
  • Individuals with net assets over $1 million, excluding their primary residence (unless more is owed on the mortgage than the residence is worth)
  • An institution with over $5 million in assets, such as a venture fund or a trust
  • An entity made up entirely of accredited investors

For more information read the SEC documentation.

What Angel Investing means?

Angel investing is buying equity (or convertible securities that can be converted into equity) in a startup company at the earliest stage of a company’s lifecycle. These investments are high risk but also potentially the most profitable since investors benefit from lower valuation and their relatively small check still buys a decent amount of ownership. On that note, angel investors should not aim to “own” or “control” a business if they want to ensure the long term success of their investment. If you should feel you have to do this for the company to succeed, you might be better off investing in another company altogether.

Why is access to good deals limited today?

Because good deals are mostly funded by people who do angel investing as a full time job, and includes a few friends in their trusted network, the financing round will be filled very quickly and will be closed before anyone else even knows about it.

Today, competition is very high in this space and the majority of good startups are participating in accelerator programs and/or having their deals syndicated on platforms like AngelList by expert seed stage angel investors and even Micro-VCs.

Why do startups need Angel Investors?

To pay for their initial expenses and to provide capital to build the first version of their product. Also for many startups, finding an Angel Investor is a good way to prove that their endeavor is or will be valuable. Validation by expert and successful Angel Investors is considered by other angels or seed stage VCs as almost a requirement these days to rise above the noise level.

From a startup’s perspective, it is very important to have respected and value-add Angel Investors on their cap table at the beginning of their journey, especially when the time to raise another round arises, and it will always be sooner than a founder would like to admit.

What does the typical Angel Investment Strategy look like?

As described above, one of the most important steps to becoming a successful Angel Investor is having access to good deal flow. Angel Investing is a high risk investment and you have to invest in at least 10 deals (would recommend even more with small checks) over time in order to diversify your risk.

While the typical Angel Investment is between $5K to $25K; the return of a successful Angel investment can be up to 500x but you will also face the very real fact that 50% of the investments you make will have a low or even zero return, as many startups fail.

To reduce your risk and increase your chance of investing in the next unicorn at an early stage (500x return) as a new Angel Investor, the best thing to do is to participate in deals with other trusted investors or invest a bigger check into a VC to start building your network and knowledge in this space!

Learn more about BootstrapLabs Syndicate here


I will publish more articles regarding this topic soon, so if there is anything you would like to add or ask, please contact me @luigicongedo !

Also I would like to recommend this NY Times article to learn how the world of angel investing has changed in Silicon Valley in the last decade.