Category: startups

Forming an Advisory Board that’s not horrible

In my last monthly company update for Hitlist, I asked for advice on how to form an advisory board. Here’s a distillation of the feedback I got.

WHEN TO FORM AN ADVISORY BOARD

  1. Not too early. “Advisory boards are super helpful (and cheap) if done right, and an expensive (in equity) waste of time if done wrong.” – Josh Elwell, a partner at ValueStream Labs, a FinTech accelerator. “Asking someone to become a formal advisor in the early stage of your company’s growth might be overkill. You can gain many of the same benefits through lunches or phone calls every couple of months – something most can commit to.” – Kerrie MacPherson, Principal, Financial Services Office at Ernst & Young (h/t to Betsy Mikel of Women 2.0 for pointing me towards her post).
  2. If you’ve raised an angel/seed round without a lead investor. “The problem and the challenge with not having the board after the Seed round is that there is no outside, non-executive perspective on the company. There is no higher level accountability for CEO, there is no regular milestones, and no regular check-ups… great boards help keep the business healthy and help accelerate it” – Alex Iskold, managing director of TechStars New York (h/t to Brittany Laughlin of USV for pointing me towards his post).

WHO TO HAVE ON THE BOARD

Via Chris Thorpe, director of engineering at EMC:

  • Advisory board members are people who can either make introductions to key people (former travel executives, for example) or solve hard problems but you don’t need them full time.
  • Ideally look for people who have been on “real” boards and/or have been CEOs or C_Os of companies that you admire.
  • I see executives hire “big names” to advisory boards and it looks good on your website but if they never read your emails or make intros then it’s just marketing. So you should reference check people.

Via Tim Peek of Peek Disruption:

  • While it’s important to have people in your industry on the board, I also believe that diversity of thought and experience is even more important for a disruptive player like Hitlist. So, I’d look for people in “adjacent” industries — areas of business that share some attributes with the travel industry but also are different or perhaps already experiencing what you hope to create in travel. What other industries have followed a trajectory similar to the one you hope to create in travel? Look for people from there to advise you.
  • Culture. I do think culture is the major differentiator for businesses in this century. In my experience too many startups are solely focused on execution (makes sense – there is a lot to do, not much time, and not many people to do it) and culture grows unnoticed. They end up with cultures that ultimately are unsustainable — I believe this is why so many startups don’t survive or have a deep “sophomore slump” and can’t come up with an effective 2.0 product or strategy once they are off the ground. So, what businesses have cultures which are successful and which you want to emulate — get those folks on your board.
  • A leadership advisor specifically for you. Someone you believe can take your leadership to the next level, support you in finding solutions to tough questions, and help you keep your head above the rising tide of daily business to focus on the big questions and direction.

Again from Josh Elwell:

  • Try to get at least one person who is “friends” with lots of people you want to know (investors, partners, customers, etc). Warm introductions are valuable, but that person pushing on “friends” from behind the scenes is even better at getting things done quickly.
  • Try to get at least one person with a “big” exit who fully understands the strategic process of getting a business sold (the second part is critical, because lots of entrepreneurs were lucky, not strategic). I get the best advice from people like that because they think about the end goal and how little decisions made now can help later.
  • Those might be the same person.
  • Relevant industry experience is nice, but I find that people with it aren’t as helpful as I had initially expected if they don’t have 1 and 2 (apart from just using their names for credibility).
  • I have an advisor who used to be a senior level management consultant. He is super helpful with lots of stuff even though he doesn’t have 1, 2 or 3. He always asks the right questions, cleans up all our pitch decks with ease, and is just generally a great person to get rapid feedback on new ideas.

Again from Alex Iskold:

  • Include 2-4 people plus the founders.
  • Recruit one or two of your top angels + other experienced operators/mentors.

HOW TO RUN THE BOARD

  1. Commit to talking to each board member every 4-6 weeks and meeting with the whole board every 2-3 months. People can dial in if necessary, but in person is ideal.
  2. “Don’t be afraid to swap folks out if it turns out to not be a fit.” – Iskold
  3. Set clear expectations for commitment. “Board members will only rise to the level of performance articulated to them and expected of them, so as a board, it is important to clarify expectations with potential new members from the beginning.” – Sarah Najarian and Caroline Page of Robin Hood (h/t to Betsy Mikel of Women 2.0 for pointing me to their post)

More from Thorpe:

  • Grant up to 2 years for your advisory board’s stock grants (typically 10–25 basis points, in my experience, depending on their contribution and experience), but then have it renew by mutual agreement every quarter and vesting happens quarterly. If someone isn’t helping you or they get busy, then you simply don’t renew them for the next quarter.
  • Building the right culture around your board is paramount and it’s one of the things that’s really hard to do when you’ve never done it before. In my opinion for a new CEO, it’s ideal to have a friendly “chair” who can help you manage the rest of the board. This is ideally a former CEO who shares your cultural values, is busy with other things, and doesn’t want your job.
  • Practice building your communication skills with them, talking about issues, presenting company strategy, cash flow, income, creating a plan and showing your progress against the plan (and how the plan evolves over time – it’s a startup, not a public Fortune 500 company). Make a habit of calling your board members in advance of your meetings and making sure they understand what’s going to happen and that you have a chance to answer their questions and address their concerns.
  • At some point investors will want to take a board seat or have formal board meetings. That’s why it’s important to have already established strong relationships and board culture that work well for your company, so that your existing board members can keep meetings in line with that culture. Culture helps prevent unproductive habits like board members ordering you about what to do, regularly showing up late, talking directly to your employees, or going “off the ranch” to others outside your company. A good maxim is “eyes on, hands off” (or “fingers out”). And you kind of need to see people in action for a while before you know. Do they support you as CEO in the board meeting and prepare you ahead of time with their issues? Do they seek to support you when bad things happen, or do they surprise you in the middle of a board meeting with a hostile question? Do they work through you, not around you? Do they ask you hard questions that make you defend your decisions and understand your assumptions better, even if you don’t change your mind? Do they respect your deep understanding of the landscape more than their own brilliant insight from 30,000 feet? Etc.
  • Board meetings can turn into a lot of work, so try very hard to limit the amount of work to just the amount needed to keep you accountable and get strategic and tactical advice. I’ve seen a lot of startups spend way too much time preparing detailed analyses and predictions on the basis of data that are too limited or early stage to be of much predictive power. Understand what you can reasonably know and not know, and what you can reasonably predict from that knowledge. Don’t be afraid to say “this is the best we can say given what we know today, and we’ll update it as we learn more.”
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How we got to 200,000 users with no marketing spend

First thing I need to say: there is no single thing that will get your app to 200,000 downloads with no marketing spend. It takes a versatile team, a ton of work, and more than a bit of luck.

But in Hitlist’s year-or-so of existence, we’ve managed to gain over 200,000 ‘free’ users from the most valuable channels of all: word of mouth and earned media. We’ve never paid for an install, we barely touch our social channels, and we haven’t used any conventional ‘growth hacking’ tactics.

However, there’s one thing Hitlist has done that I haven’t seen elsewhere, and it’s been such a huge boost that I wanted to share it and hopefully inspire others to do the same.

What’s our one silver bullet?

Hitlist has a tiny core team, but we’ve been able to leverage hundreds more through a simple device: consistent, concise update emails. I send one a month, called ‘The best update ever from Hitlist‘, to a list that now numbers in the hundreds.

It wouldn’t be an exaggeration to say that the support we’ve gotten from the people on the mailing list has saved us over $100k that we might have spent on marketing, PR, hotels, conference fees, and countless other goods and services that have helped get us to this point. Here’s a small sampling of things that people on our email list have helped us achieve:

  • App Store feature in 40+ countries that resulted in nearly 100k downloads
  • temporary housing in New York, San Francisco, Zagreb, Berlin, and London
  • features in the New York Times, TechCrunch, The Next Web, and… a major Greek blog that drove nearly 10k downloads
  • >$500k in investment

Here’s what I try and include in every update:

  • Last month’s focus, and how you did. As Mark Suster once put so well, investors invest in lines not dots. Your readers are investors, in a sense: they’re dedicating time to reading your email, and you may be hoping that at some point they’ll invest something else (money or expertise or references). Give people a sense of your arc, and show that you consistently deliver on the goals you set for yourself – or if you don’t meet them, explain why and explain why you will next time.
  • This month’s focus, and an ask: let people know where you’re going and if they can help. They’re already reading your email, so chances are they like you and might like to contribute if they can. Give them an opportunity. If you don’t ask, you never know what’s out there. (If you haven’t seen Amanda Palmer’s ‘Art of Asking’ TED talk and have 13:40 minutes, watch it now, or read this great summary from Maria Popova). Make it specific: not ‘we’re looking for marketing help’ but ‘we’re looking for a senior marketer who has experience optimizing social channels for customer acquisition at a consumer-facing startup’ (know anyone?)
  • Something they don’t get elsewhere: you’re asking a lot of your readers, and some of them will understandably be thinking (in Noah Kagan‘s words), what have you done for me lately? Try and include something educational or access to something cool. Remember that not all of your supporters speak ‘tech’, but they’re probably curious about it. Imagine you’re writing all your emails to your great uncle Bob who is an artist. If he wouldn’t understand what you’re talking about when you mention MAUs, then spell it out.
  • Shout-out to a person/product that’s helped you out. If there’s a product that’s saved you lots of time, or a team member who’s been a hero, make sure to give them a hat tip. I’m a huge fan of Click to Tweet, for example.
  • Validation: any outside press, milestones, or accomplishments that can help show your reader that they should care about you and want to be part of your success.
  • Why we’re doing this: the ‘we’ here can refer to your team, or to you and all your readers. Why should they care? Why should they continue to invest any time in you? What are you adding to their life?
  • Something amusing: make yourself personable. Some call it unprofessional, but I like to include a GIF. For example, this illustration of Hitlist’s preferred sorting algorithm.

KEEP IT SHORT: 500 words or less.

This is the formula I’ve developed over a year’s worth of updates (you can see the archive if you like at blog.hitlistapp.com), but I’d love to hear tips and what’s worked for you if you in the comments.

TO RECAP, the core elements of an engaging update:

  1. Last month’s focus and how you did
  2. This month’s focus and an ‘ask’
  3. Something educational or exclusive for your reader
  4. Shout out to a person/product that’s helped you out
  5. Outside validation that you’re worth anyone’s time
  6. Why we’re doing this
  7. Something amusing

If you find this useful, consider sharing it using the conveniently placed buttons around the site.

And as always: check out Hitlist on iOS or Android, please one click tweet about Hitlist, Like us on Facebook, and follow us on Angellist!

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Hitchhiker’s Guide to Travel Startups

You’re thinking of starting a travel startup. Congratulations! You’re joining the most competitive, saturated market in the startup universe, or as Y Combinator partner Garry Tan terms it, “the most common bad startup idea.” According to PhoCusWright, 750 travel startups have collectively raised $4.8bn in the last eight years (’05-’13, so that doesn’t even count AirBnb and Uber’s massive raises this year). But hundreds more have failed to raise funding and/or gain traction.

Don’t let that discourage you. There’s a reason we all keep trying to disrupt this multi trillion dollar industry: planning, booking, and making the most of travel could be improved in so many ways. The tools to try and create something new have never been so accessible. Gigantic funding and and a strong existing brand can actually stifle innovation.

T-Rex tries to chart exponential growth
T-Rex tries to chart exponential growth

Here’s a list of resources I’ve found valuable in the course of building my own travel startup, Hitlist, which might help you get further faster. I’ve tried to make this as comprehensive as possible, but it’s naturally informed by my own experience. Therefore the information below is most relevant to US-based startups working on technological innovation (as opposed to building a brand/lifestyle business). I’d LOVE feedback/edits – leave them in the comments or you can contact me on twitter @gillianim.

RESEARCH/RESOURCES:

  • PhoCusWright is the default industry body for research and analysis. Subscriptions and buying individual reports are out of most startups’ budget ranges, but there are useful tidbits online. See if you can make friends at more established companies that can share reports with you until you’re grown up enough to pay for your own.
  • Tnooz has long been the rag of choice for intra-industry gossip, analysis, and breaking news. With a distinguished list of contributors and an active community (as seen through the comments on most articles), it’s worth a daily read.
  • Skift plays in the same space as Tnooz, but is a few years younger (and has some ex-Tnooz writers on staff). They generally don’t feature outside writers but do have sponsored content. The newsletter is excellent and they’re entering the conference game with their own ‘Future of Travel Forum‘ in October.
  • ThinkwithGoogle, eMarketer, MarketWatch, and HUGE have also put out some interesting travel industry research.

INVESTORS:

  • David Ambrose of Steadfast VC has put together a fantastic list of angel investors and VC funds that have invested in travel companies in the last few years.
  • Skift crowned Erik Blachford, Sam Shank, Hugh Crean, Brad Gerstner, and Rich Barton ‘The Five Angel Investors who rule the world of travel.‘
  • In the VC space, General Catalyst and Thayer Ventures are well known for their focus on travel. Sequoia deserves special mention for, characteristically, getting into almost every major success in recent years (ITA, Kayak, AirBnb). Accel and Insight have also made a number of notable investments in the space.

Side note: as far as I can tell, the only woman represented on any of these lists – and the only woman I know of who has led any part of that $4.8bn invested in travel – is Sonali De Ryckr at Accel in London. Granted there are fewer women in venture capital in general, but they also seem to be disproportionately uninterested in travel investments.

CONFERENCES/EVENTS: this is not meant to be comprehensive – these are the conferences that fellow travel founders have found most value for money. H/t to David Litwak of Mozio, Alex Bainbridge of TourCMS, and Paige Brown of Dashbell for their insights.

  • PhoCusWright (various US locations, November, from $3499). The research company remains the indisputable king of the travel conference game. Its annual conference, held somewhere in the US, has historically attracted the who’s who of the travel ecosystem. The price tag is steep and so it’s important to go only if you have a clear agenda on what you’re hoping to get as your ROI from the three day event. There’s a smaller European edition in Dublin in May.
  • ITB (Berlin, March, 60 euro). Bring your walking shoes if you plan to go to this massive trade show. It’s very similar to World Travel Market, in London in November, but for some reason seems to attract more notable industry people. Expect lots of exhibition halls with every facet of the industry (from baggage handling systems to Disney tours) represented. A great opportunity to learn and network at any of the hundreds of coffee/cocktail hours. Hot tip: the LGBT pavilion has the happiest happy hours.
  • The inaugural Skift Global Forum (October, New York, ~$1200, with a much appreciated discount to $440 for startups) was a sell out smashing success: one commenter called it the ‘TED of Travel’. More intimate than the other conferences, and packed with good people to know.
  • Web In Travel (Singapore, late October, from $2000) the premier travel conference in Asia.
  • GBTA (various locations, July). The Global Business Travel Alliance holds a number of satellite conferences around the world but the annual Convention in July is the most effective for networking and BD.
  • Airline Information (various locations, main conference in December in New Orleans this year, from $599) geared towards airline ancillary revenue, cobranded credit cards and loyalty
  • HITEC (various US locations, June, from $645) geared towards the hotel and hospitality technology industry
  • WTM (London, November). Slightly smaller version of ITB (see above).
  • Many of the major companies (Amadeus, Concur, Datalex, Sabre, etc) throw their own conferences which can be high value.

COMPETITIONS/PITCH EVENTS:

  • Hackathons can be an amazing way to connect with other people intent on building the next big thing in travel. Tnooz sponsors a few throughout the year, and Mashable and Emirates Airlines have also done travel-related events in the past
  • PhoCusWright’s Travel Innovation Summit offers an opportunity to present to the who’s who at the conference in November – but at a cost of $15k ($6k if you get a scholarship)
  • BTN Innovate has an ‘innovator’s lab‘ where ten startups get to present
  • the Airline Information conferences have a ‘Lion’s Den’ which sounds like Shark Tank with less obnoxious judges
  • Web In Travel has a startup competition – would love more details from anyone who’s done it in the past

MEETUP GROUPS: 

  • Travel Massive (various locations) is the most established meetup of travel industry folks. It’s a little different in every city (they’re active in more than a dozen, listed here) but tends to be heavier on bloggers/travel agents than on people involved in the technical side of the industry.
  • Travel 2.0 (New York, Boston) puts on educational and networking events specifically for aspiring or current travel founders.
  • Young Travel Professionals and Millennials in Travel are both networking groups that throw events in a number of different cities (mostly NYC & LA).

INCUBATORS/ACCELERATORS: if this is your first startup, you may want to consider one of these 3 to 6 month programs that typically provide seed funding, office space, mentorship, and an opportunity to present your company to investors at a ‘demo day’ in exchange for a nominal amount of equity (5-10%). The right accelerator can push your startup to achieve in 3 months what might take others 3 years.

  • Y Combinator (Silicon Valley, 3 months, 2x/year) has a rich legacy in travel startups. AirBnb is the obvious standout success, but Hipmunk, Flightfox, Airhelp, FlightCar, etc have also worn orange.
  • Startup Chile (Santiago, Chile, 6 months, 2x/year) loves to fund travel startups, but typically doesn’t provide much value add. Unless you count a subsidized six months in Chile as a value add. On the upside, they don’t take any equity in the company.
  • TechStars (various locations, 3 months, one starts nearly every month) has a decent legacy in travel. FlexTrip (Boulder), DealAngel (Boulder), Wander (NYC), have all been acquired. Dashbell (Boston) and others have raised subsequent rounds.
  • RunUp Labs (Bloomington, Indiana, 3 months, 1x/year) the ‘first dedicated travel startup accelerator’ just had its first demo day on August 1st. Unclear where they’ll be going from here.
  • Traveltech Lab (London, no set term) offers free office space and opens January 2015. We’re excited to hear more about it – applications are open now.

BOOKING APIs: if you want to allow users to view live pricing on your site/in your app, you’ll want to either build or connect to an API that can provide live pricing and availability information. These can turn into revenue streams for your app in two ways: either you will act as a travel agency yourself, earning a commission off every ticket booked through your app, or you will send your traffic to a booking partner in exchange for a lower referral commission. Becoming a travel agency is much more involved: you will need to provide merchant services (customer service, insurance, etc). Depending on how well funded you are or how agile you want to be, it might make sense to refer to partners at least until you prove your business model.

Flights

  • Skyscanner has a robust, well documented API that is offered for free to select partners. You can try emailing them but networking your way to an introduction will be more useful.
  • Orbitz / Cheaptickets (same parent company) offer an affiliate API, but I’m not sure what kind of commission they provide.
  • Expedia, Priceline, Travelocity, and Kayak have all offered flight APIs in the past, but most won’t anymore unless you have a very strong ‘in’
  • Sabre, Travelport, Amadeus, and ITA all offer paid APIs, but you will need to provide end booking services or link to another partner if you want to make a commission.

Hotels

Tours and Activities

  • Viator has a white label program, widgets, and direct API for selling their tour & activity inventory on your site
  • TourCMS also offers an API for tours and activities, but you will have to make commercial agreements and set specific commissions with your booking partners
  • Excursiopedia has an XML API, “smart” widgets and simple deeplinks for content websites to distribute their inventory of >30k tours & activities with a simple flat commission of 6%
  • Festicket has an API for – you guessed it! – festival tickets

Others

  • Rome2Rio has a number of very useful APIs for everything from geolocating to the nearest airport to navigating from, well, Rome to Rio.
  • CarTrawler.com for car rentals
  • Mozio offers an API for airport transfers
  • Airports/airlines: the official Airline Coding Directory is sold by IATA for $519, but OurAirports and OpenFlights offer free alternatives
  • Wcities offers a reasonably priced API for basic city information
  • Sabre has a number of APIs and caches of old data for analysis

MAJOR COMPANIES TO KNOW: by market cap (source: Skift)

This Quora post of the largest travel startup exits goes into more detail on the movements of big companies in this space.

  • Priceline ($65bn)
  • Las Vegas Sands ($60bn)
  • Disney ($47.1bn)
  • Galaxy Entertainment ($36bn)
  • Delta ($33bn)
  • American Airlines Group ($29.4bn)
  • Carnival Corp ($28.3bn)
  • Hilton Worldwide ($25.1bn)
  • Wynn Resorts ($21.3bn)
  • Southwest Airlines ($20.5bn)
  • Marriott ($19.3bn)
  • Amadeus ($19.1bn)
  • United Continental ($18bn)
  • Host Hotels & Resorts ($17.4bn)
  • Starwood Hotels ($15.2bn)

NOTABLE TRAVEL STARTUPS: Diego Saez-Gil of WeHostels has compiled a great Quora post with the major exits in the travel space in the last decade or so. Some of the biggest travel startups (defined loosely as those that haven’t yet reached an ‘exit’ – either by IPO or acquisition) are listed below – I’ve tried to highlight all the ones that have raised over $10m, and also some notable up-and-comers. Douglas Quinby at PhoCusWright also issues a ‘State of Travel Startups’ report every year which is packed with interesting insights.

VOCABULARY: if you’re not already in this industry, it’s important to know the distinction between the basic tiers of the travel booking/distribution system, as follows:

  • OTA = online travel agency (Expedia, Priceline, Orbitz, Travelocity) – online retailer of travel products
  • Metasearch engine (Kayak, Skyscanner) – aggregator of OTA content, drives warm leads to OTAs and direct to airline websites in exchange for a referral fee. The important distinction from an OTA is that you do not make your end booking on a metasearch engine. Metasearch engines make lower margins than OTAs but usually make up for it in volume.
  • GDS = Global Distribution System (Sabre, Amadeus, Travelport, ITA) – centralized repositories of fare and availability data for flights, hotel rooms, car rentals, etc. GDSs sell this information to OTAs and, increasingly, metasearch engines (Amadeus in particular has made strides in developing search as a service).

IF YOU THINK THIS IS USEFUL please share it with your friends. And remember, as this GIF illustrates, if you can roll with the punches and move fast, you may be able to make the competition fall on its face.

The power of startups

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Weekend Project: Playover

This past weekend, I teamed up with the amazing Tadhg Pearson, Brian Shaler (also known as doge_js), and Kyle Kahveci to put together a hack for Mashable’s Travel Hackathon sponsored by Emirates Airline and hack/Reduce.With only seven hours, there wasn’t much time for polish, but we pulled together Playover, an app that helps you intentionally search for trips with 6+ hour layovers. Why, you ask? Because layovers suck, but they don’t have to. Oftentimes you’re flying through great cities like Paris, Munich, London, Istanbul, or New York. Rather than moping in the airport, or planning a separate vacation to Paris, why not just schedule a long layover to at least get a taste of the city?

We didn’t have time to knit the back end and front end together as we’d wished, but the core of the app is live if anyone wants to play around with it at playover.herokuapp.com.
Tadhg mastered the back end, Brian was responsible for the front end, Kyle did design, and I attempted to bring together the necessary APIs and ensured that no TV crews got in the way of the gentlemen doing their work.
We took second place but are all winners because, you know, we learned a ton. And supposedly Mashable is sending us sweatshirts.
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Finding and Hiring Talent at an Early Stage Startup

I was recently asked what I consider the hardest part of founding a startup. The answer, of course, is that it’s all hard: finding the right idea, prioritizing, executing, and evaluating when or if to change course.

But if I had to choose the hardest piece of all, it’s finding the right people to work with. It’s tempting to shelter your baby startup from all outside influences. As long as you and your cofounder(s) are the only ones working on it, you’re in control. Ceding some of that control to new hires can be terrifying, especially if you don’t know them well. But if you really want your baby to grow up and be a self-sustaining or, ideally, world-changing business, you need to allow others to help shape its development.

So the following are some tips which I hope might be helpful as you embark on your search for employees 1, 2, 3 and… well, that’s as far as I’ve gotten, so when I know more I’ll try and report on that.

Finding People Worth Hiring

– AngelList is probably the best job board to find startup-minded talent, but there’s a lot of noise to sift through. I use AngelList the same way many people use Tinder: I ‘like’ anyone that looks vaguely interesting, and if they ‘like’ me back I delve into their profile and see if they’re actually worth pursuing.

– Use your trusted networks. People often overlook things like their facebook timeline, their college’s job board, their floor hockey league email circular, etc. It’s like they’re ashamed they’re hiring. There is nothing wrong with being in a position to hire talent. Shout it from the rooftops. Put it in your email signature line. You never know when your mom’s friend from church has a son who happens to be sick of his job at Zynga and wants to move back east. And connections, even loose ones, help ensure that you don’t get stuck with a psychopath (more on that later).

– Be visible in the community. Present your startup at meetups and conferences, or try and get press. If you can’t get on a panel somewhere, organize your own event. If you can’t get press, publish a blog post or an infographic others might pick up. Answer questions on Quora. Be active on social networks, especially Twitter. If you were a talented startup-person, would you rather work for a respected, contributing member of the tech community or an MBA who has never built a business before?

– Poach! The people you really want to hire probably aren’t on the market: they’re already doing good work at a successful company. But their souls might yearn to be at an early stage start up. Help them achieve inner peace. Look for startups that have really taken off in the last 2-3 years, and identify the people that have been there from the early days. They obviously had and probably still have interest in working at a smaller company. Also, just as importantly, they’ve vested into most if not all of their equity (assuming standard 4-year vesting), so have less reason to stay in their current job. Woo them. You have something in your arsenal that is, to the right person, more attractive than money: the opportunity to build something new and innovative, or at least have fun trying. 

The Interview Process


– Letting the interviewee talk, rather than badgering him or her with questions, can surface the most interesting responses. Without being too awkward about it, try and leave enough time after an interviewee gives an initial answer so that he or she can add more. Example of a conversation I had once:

Me: what do you consider a good work-life balance?
Him: I think if you’re really concentrating, you can pack a really good day’s work into about four hours. And if you’re producing good work you’re going to be concentrating so hard that it’s difficult to perform well for more than four hours. So I really try and optimize my time, and of course I’m on call for more than four hours a day, but that’s probably what’s sustainable to consistently put out really good code.
(at this point I’m thinking that he’s probably right and this is pretty reasonable, but I wait just in case he wants to say more)
He continues: also at the end of the day I’m really quite lazy. I like my free time. I basically want to work the minimum amount possible. Fortunately as a coder I can usually get things done pretty quickly and no one really knows how long they should take so I can kind of set my own hours.
Me: …….

Needless to say, I’m not sure why this guy thought that was going to make me want to hire him. But I’m glad I waited and got the full picture.

– for a startup it’s important to ask the question: ‘If the company hit hard times, what would you do?’ If they say ‘I have student debt and/or a family to support and couldn’t take a reduced salary’, or something along those lines, they shouldn’t be disqualified. Nevertheless, it’s important information to know, and better to have that kind of conversation up front rather than when you’re against the ropes. Startups are so sexy these days, and lots of people interview for jobs at startups without really appreciating what that means: low pay, low job security, little to no benefits, all for the sake of an upside that is 90% not going to pan out.

– always hire people smarter than you, as long as they respect you and aren’t earning such a high salary that they’ve got no skin in the game.

Closing the Deal

– So, psychopaths. They exist, and they can ruin your company. Do your due diligence. Try and find some connection in the network of the person you’re hiring. I don’t actually like asking candidates to volunteer a reference, as I’ve always found that to be a pain when I was interviewing for jobs. I usually inform a potential hire that I’m going to try and reach out to people in my network who might have worked with him or her (it’s important to mention this so he doesn’t feel violated if he hears you’ve been snooping, but he should also understand that this is completely reasonable thing to do). I search LinkedIn for the previous company, see if I have any first or second-degree connections there, and reach out. Blind hires probably have a greater likelihood of working out than your average blind date, but that’s not saying much.

– when hiring I’ve always started people on a 60 to 90 day contract at a fair price (usually above what ends up being their salary, to compensate them for the fact that they’re not yet getting equity or in a long-term position), then negotiated ongoing salary/equity a month or two into their contract. Locking in a salary or equity number before youve worked with the person for at least a few weeks is like raising a seed round at a valuation rather than a convertible note: okay if necessary but preferable to postpone the valuation till you have more data.

– have hires (if you follow the above they’re contractors to start) sign a standard contract and agreement off Docracy if you’re too early stage to afford a lawyer. If you have less than $100k in the bank you are too early stage to afford a lawyer. I like Gunderson Dettmer’s standard consulting agreement.

– Read Founder’s Dilemmas by Noam Wasserman. So much wisdom.

In Conclusion

If we can learn one thing from Facebook’s acquisition of WhatsApp, it might be this: that no matter how smart or dedicated you are, you probably need at least 54 other people to build a $19bn company in four years. Don’t let yourself become an overprotective, smothering parent to your baby startup. It takes a village to raise one of these things right. 
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The Complete Guide to NY Tech – ABRIDGED!

A few months ago, Steve Schlafman of RRE Ventures put together an exhaustive overview of the NYC tech landscape. It’s great, but at over 100 slides, it’s a lot to wade through, especially if most of the names are new to you.

So here’s a hopefully more digestible version, loosely modeled after Rob Go’s excellent ‘Hitchhiker’s Guide to the Boston Tech Community‘.

New York has always been a center of innovation. But when it comes to the kind of internet-enabled, venture capital-fueled innovation we call ‘tech’, the Big Apple was long considered a bit of a backwater, the kind of place a good programmer would only move if his/her significant other was trying to be an actor. Less than ten years ago, people were more likely to consider Boston or Chicago America’s second tech city.

How things have changed. New York is now the world’s fastest-growing tech hub. We can’t compete with Silicon Valley for sheer scale yet. But Foursquare, AppNexus, Tumblr, Meetup, Makerbot, Shutterstock and Buzzfeed have shown the world that NY tech is more than just fashion and finance (though Gilt, Warby Parker, and Kickstarter are also great). If you don’t believe me, read Venrock partner Nick Beim’s fantastic, data-packed analysis of ‘The Rise and Future of NY Tech’.

If you’re new to town or new to tech, here are some places to kickstart your journey into the NYC innovation community.

Mailing lists/events listings

– NYC Startup Digest
– Gary’s Guide: probably the most comprehensive, but it can be hard to figure out what’s really worth going to. On the upside, often has free goodies/discount codes
– This week in NYC Innovation: well curated by VC Charlie O’Donnell
– Bonnie Halper’s ‘SOSList’
– Kate Kendall’s ‘The Fetch’

Coworking spaces (many also have good mailing lists)

– WeWork (multiple locations): slick, professionally run, and affordable
– AlleyNYC (37th and 7th): high traffic, good roster of events
– Fueled Collective (SoHo): founders of the successful app development shop rented out a floor of Foursquare’s space and tricked it out like the set of a GQ shoot. Magnet for clever people who all seem too cool to really be in tech
– Projective Space (SoHo): minimalist decor, solid events, mostly dudes
– Wix Lounge (Chelsea): free! So often crowded. But free
– New Work City (Chinatown)
– Secret Clubhouse (Williamsburg): the hipster coworking space
– a more comprehensive list courtesy of Mark Birch here
– and the Complete Guide to Coworking from AlleyWatch

Meetups:

– NY Tech Meetup: with close to a thousand attendees, it’s a madhouse and you’re not likely to run into a Big Dog (successful/famous founder or investor) in the audience like you used to in the old days. However, the presentations are usually high quality and it’s worth checking out at least once
– Ultralight Startups, Entrepreneurs’ Roundtable: monthly event with 4 or 5 startups pitching a panel of VCs and getting feedback. Instructive.
– PandoMonthly, Startup Grind: fireside chat-style talks with notable startup founders
– House of Genius: amazing invite-only event (you can apply) where anonymous panelists give feedback to two growing companies
– Amusemi: ‘dining club for entrepreneurs, designers, and friends’
– NYC.js: smaller than the NYC Javascript meetup, but higher quality events. They aggressively screen for recruiters, so come only if you’re genuinely interested in learning about the tech
– generally, just comb through the mailing lists and search Meetup.com for things related to your specific domain (edtech, health, maps, design)
– as a general rule, things being hosted by General Assembly and at AppNexus tend to be quite good

If you’re starting a company

– Startup Weekend ($125), Lean Startup Machine: 54 hours to build a business. Pitch your idea, if it’s selected form a team, and present how far you’ve gotten two days later. Mentors—investors, experienced founders, etc — coach teams on best practices and award a winner
– Test Tube ($5): usability testing speed dating-style: spend five minutes with someone trying out your app and then do the same with theirs. Repeat ~6 times. Great way to get a real sense of your products’ appeal. You can go with just an idea and it’s a great way to get feedback from strangers, which is much more valuable than feedback from friends
– Strategy Hack ($650): one day workshop to hone your marketing strategy
– NYC Economic Development Corporation (NYCEDC): lots of government resources dedicated to helping small businesses grow, notably Take the HELM ($250k grants)
– accelerators: TechStars, AngelPad, DreamIt, and Entrepreneurs’ Roundtable: in exchange for 6-10% of your company, receive $20-40k investment, work out of a shared office space, and gain access to a community of mentors who help you accelerate your startup’s development. Competitive admission. More comprehensive overview from AlleyWatch.
– or try and pitch at Ultralight or Entrepreneurs’ Roundtable (free, see above)

If you might like to work at a startup

– General Assembly‘s job boards (on the wall at 902 Broadway, 4th Floor… how retro)
– HireArt
– The Muse
– Christina Cacioppo’s job board
– Made in NY job map
– Jobs at Union Square Ventures-backed startups: http://www.usv.com/jobs

Educational resources – the last few years have seen an explosion in Tech Education. Some might argue that successful entrepreneurs learn by doing, not paying $12k for a coding course. But the paid schools below have built up impressive alumni networks and also help with job placement, which may justify the price depending on your own networking prowess.

– General Assembly: everything from $20 evening classes to twelve week $11.5k web development immersives
– Flatiron School: twelve weeks, $12k, and arguably the best coding education you can get outside of a good university. Competitive admission.
– Startup Institute: $5250 for an 8 week course with a ‘core curriculum’ and optional specialization in different startup-centric tracks (web development, UX design, etc)
– Codeacademy: it’s free. Online. Started by NYers. Bloomberg apparently uses it, bless his heart
– Dash: a sexier but less developed competitor to Codeacademy, also free online. Made by the General Assembly folks

Conferences/events*

– TechCrunch Disrupt (early May): the tech blog’s second conference gets an appearance from most of the current Hot People in Tech. Can be useful to try and rub shoulders, but don’t pay full price for a ticket
– Maker Faire (late September): take Medieval Times and replace the jousting with robot jousting. Really!
– NY Tech Day (late April): quite obviously not the World’s Largest Tech Event, as they bill themselves. Still a decent overview of who’s making what
– Capital On Stage (November): one day conference where venture capitalists ‘pitch’ to entrepreneurs
– Google search ‘NYC Hackathon’ (what is a hackathon?) as these are constantly changing
*these events are often pricey, but there are always hacks to get in for free or a reduced rate – participate in the Disrupt hackathon, for example, and you get two free tickets to the $1995-a-ticket conference

Scenesters – not the ‘best’ entrepreneurs and investors, but the people that go most out of their way to be accessible and welcoming to new startup-minded people + the ones that consistently generate good social media content. Sorted by descending sum of Twitter followers, more or less.

– Arianna Huffington: no explanation needed
– Gary Vaynerchuk: prolific angel investor, just launched a seed fund
– Mayor Emeritus Mike Bloomberg: presided over NY’s transition to tech powerhouse, continues to be a champion of the community
– Jenna Wortham: NY Times tech reporter
– Anil Dash: NY tech old guard. Serial founder, prolific tweeter. blog
– Fred Wilson: Godfather of Union Square Ventures. blog
– Baratunde Thurston: seems to be a staple at tech events though it’s unclear why exactly
– Chris Dixon: VC@ Andreesen Horowitz. blog
– Joel Spolsky: founder of Stack Overflow, but best known for Joel on Software, his coder culture-defining blog since 2000. Blogging for 14 years!!
– Alexis Ohanian: Reddit founder, Y Combinator’s east coast ambassador, angel investor, book writer
– Kate Kendall: Melbourne transplant, media maven, founder of The Fetch
– Esther Dyson: prolific angel investor
– Rachel Sklar: founder of the Li.st, an email list for females in tech, ‘Change the Ratio‘ champion
– Jonah Peretti: founder & CEO Buzzfeed
– Jason Saltzman: founder & CEO, AlleyNYC
– Bre Pettis: CEO Makerbot. blog
– David Tisch: scion of the family with their name on half the buildings in NY. Formerly found of TechStars NY, now investor at Box Group
– Charlie O’Donnell: formerly of First Round Capital and Union Square Ventures, now leading his own $10m fund, Brooklyn Bridge Ventures, which has had early successes in Tinybop and Canary. Often arranges lunches & dinners for the NY entrepreneurial community
– Cindy Gallop: advertising exec turned founder of friendly porn site mlnp.tv. Force of nature
– Trevor Owens: runs Lean Startup Machin
– Andy Weissman: Union Square Ventures. blog
– Howard Morgan: First Round Capital. Most active 60+ year old tweeter in tech?
– Ben Lerer: Lerer Ventures, Thrillist founder
– Christina Cacioppo: formerly USV, now building something?
– Phin Barnes: First Round Capital. blog
– Courtney Boyd Meyers: The Next Web, Wired, Daily Beast writer
– Kathryn Minshew: founder of the Muse, WSJ contributor, poster woman for Women in Tech
– Alyson Shontell: Business Insider
– Erin Griffith: formerly PandoDaily, now Fortune
– Joanne Wilson: ‘The Gotham Gal’ angel investor, blog
– Kelly Hoey: founder Women Innovate Mobile accelerator
– Steve Schlafman: formerly Lerer Ventures, now RRE
– Shai Goldman: Managing Director at SVB, formerly heading up the NY branch of 500 Startups, Dave McClure’s global empire
– Matt Brimer: one of the founders of General Assembly, prolific party-hoster
– Rameet Chawla: co-founder of Fueled, insanely well dressed
– Ryan Matzner: co-founder of Fueled, insanely well dressed. Yes, both of them.
– Frank Denbow: curator of NY Startup Digest and founder of NY Startup Weekend, staple at hackathons. Knows everyone
– Murat Aktihanoglu: founder Entrepreneurs’ Roundtable Accelerator
– Chris Velazco: formerly @TechCrunch, now associate editor at Endgadget
– Mark Birch: serial founder, blogger, man about town. blog
– Niamh Hughes: former community director @General Assembly, now at Shutterstock; Sandbox network ambassador for NY
– Tom Limongello: columnist @PandoDaily, abortive creator of fail whale pillows
– David Teten – ff Venture Capital, HBS Alumni Angels, frequent judge at startup competitions
– Christina Wallace – director of NY Startup Institute, super connector

Getting investment

– SVB’s Shai Goldman has helpfully compiled a spreadsheet of funds raised in the last two years, which are by definition the most likely to be actively making investments today
– 15 NY-based Angel Groups for Your Startup to Consider from AlleyWatch

Big NY Startups

– Meetup
– Foursquare
– Thrillist
– Etsy
– AppNexus
– Fab
– Tumblr
– Stack Exchange
– Shapeways
– Return Path
– Kickstarter
– Buzzfeed
– RapGenius
– Warby Parker
– Gilt
– Artsy
– Squarespace
– Vice Media
– Sailthru
– Refinery29

Concluding Notes

– General Assembly runs a great free 1-hour ‘orientation’ class every few weeks that gives a good overview of things and people to know
– Is this comprehensive? Hell no. That’s the point. Still, please let me know of any glaring omissions or falsities in the comments, mail g at hitlistapp.com or via the social network of your choice.

Sources: Steve Schalfman’s ‘Guide to NYC tech’; SVB, CB Insights, and Orrick’s ‘Venture Capital Almanac’;  Brittany Laughlin @USV; anecdotes; hard won personal experience

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On Starting Startups

(originally published on Medium)

5 Days to Decide if You’re Ready to Found
A step by step process to evaluate your idea and, more importantly, whether you really want to be an entrepreneur

You have an idea that could grow into a world-changing, money-belching company. So you’re thinking of founding your first startup.

The trouble is that there’s no obvious path to becoming an entrepreneur. In the US we have exams to tell you you’re qualified to dispense prescriptions, trade securities, or educate our schoolchildren. But how do you know you have the skills to start a successful company?

You probably don’t. No one is born knowing how to build a winning startup. But that shouldn’t hold you back from trying. Skills can be learned! If you’re seriously considering taking the leap, here’s a checklist, designed to be carried out in as little as a week, that will help you make an informed decision on whether or not you’re ready to found.

1. Read Founder’s Dilemmas by Noam Wasserman.
Time to complete: ~8 hours

What are the costs and potential benefits of founding your own company? What resources (human, financial, and other) should you be assembling? Founder’s Dilemmas has answers to most of the questions you don’t even know you should be asking. A lot of popular startup books (like the classic ‘Do More Faster’) focus on case studies, which are interesting. But I really appreciated Wasserman’s systematic longitudinal studies of 1000+ startups, and the facts he drew from them. For example: the average founder has worked for 14 years before starting his or her first company, but the standard deviation is 9.8 years. So there really is no ‘right’ age to become an entrepreneur.

2. Read Venture Deals by Brad Feld and Jason Mendelson.
Time to complete: ~4 hours

Chances are you’ll need to raise money at some point. Do you know what options, convertible debt, and carry are? Are you sure? If yes, go buy yourself a popsicle, and then read this book anyway (the rest of you do just the last part).

Convincing someone to give you money is an art, not a science. But for deciding how much equity to give up, what terms to be flexible on, and what kind of person you want to take money from — it doesn’t hurt to learn from the experience of those who have gone before. Plus it will probably help save you a lot of money in lawyer’s fees.

3. Attend a Startup Weekend/Lean Startup Machine weekend workshop.
Time to complete: 48 hours

These happen all over the world — Startup Weekend and LSM are the most well known, but many clones exist. They tend to follow the same pattern: on Friday night, everyone (typically 50-100 people) shows up and pitches ideas. Attendees vote and the top 10 ideas are selected for further development. Even if your idea isn’t chosen, you’re expected to join a group and work on turning one of the 10 concepts into a ‘business’ for the next 48 hours. Mentors—investors, experienced founders, etc — coach teams on best practices. On Sunday afternoon, each team demos, and the mentors choose a winner.

If you find in the course of the weekend that you’re frustrated by the challenges of building a team, fighting for your idea, figuring out how to make something work with less time or other resources than you’d wish, or releasing something that isn’t perfect… that might be an indication that you won’t enjoy doing this for a living.

(Some of these are free, some aren’t; the paid ones may have better mentors and thus, potentially, more useful connections.)

4. Connect with the ‘community’.
Time to complete: minimum 2 meetups, 4 hours total

Most cities will have some form of startup networking scene. These are generally easy to find via meetup.com, an online organization that allows people to create special interest groups and publicize their events.

Show up to anything that looks interesting, eat some pizza, and tell people about what you’re thinking of building. Eventually, as your idea and product refines, you’ll want to target key players rather than the admittedly hit or miss crowd you’ll find at an average meetup. But at the beginning you should just get feedback from as many people as possible.

Meetups are also a great way to meet potential teammates. You’re not going to build a billion dollar startup on your own, and even if your idea and abilities are Zuckerbergian you’re not going to have people beating down your door to work with you at the very beginning.

There are almost always some interesting people at every startup-focused event. If you can find them, hey! You might be good at this.

If there aren’t any meetups in your town, you can engage with the startup community online through forums like Quora, Hacker News, and Stack Overflow, to name just a few.

5. Find role models and ask to meet with them.
8 hours to set up and have 4 meetings

Chances are you have some entrepreneurs in your network of family, friends, and former colleagues or classmates who will be happy to listen to your idea and provide some initial feedback.

If you’re interested in a specific industry, don’t be afraid to seek out the leaders in your field. I’ve cold emailed CEOs of some of the biggest companies in my industry and every single one has replied (though not all agreed to meet the first time). Entrepreneurs tend to be generous with their time and advice. We’ve been where you are now, and we’re happy to do some shepherding just as we were once shepherded. That being said, you’ll do yourself and them a favor by learning a bit about the startup landscape before you reach out. Read Founder’s Dilemmas first and then make the most of your meeting by coming in with specific questions.

You don’t need to follow this list. I’m in no way an authority on what it takes to build a successful company (we’ve still got a long way to go at TripCommon). But if you’re thinking of investing a substantial portion of your life in a startup, a bit of due diligence can’t hurt.

Ultimately, no one’s going to be able to tell you when you’re ready to found your company. You need to be passionate. You should be able to convince at least a few other people that your idea is worth building. But beyond that, it’s anyone’s guess whether you have what it takes to succeed. The only way to find out is to try. Good luck!

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