Do More Faster: TechStars Lessons to Accelerate Your Startup

293 Pages·2011·35.6 MB·English

by  Brad Feld

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techstars
lessonsto
accelerate
your
startup
david cohen brad feld
$29.95 USA I $35.95 CAN
ITISACOLD, HARD FACTofbusiness lifethatmost
startupsfail.Evenmanyofthose entrepreneurs
who ultimatelysucceed have stories ofpersonal
challenges, unsuccessful companies, and difficul
ties along the way. Thefounders ofTechStars, a
mentorship-drivenstartup accelerator, haveworked
with entrepreneurs and companies overthe past
twenty-five years, and have seen a numberofthe
same issues come up again and again.
InDoMoreFaster,the founders ofTechStarsidentify
the keyissuesthatfirst-time entrepreneursencounter,
and offerproven advice fromsuccessful entrepre
neurswho have worked withthe TechStars program.
The authors organize the most critical issues into
seventhemes: IdeaandVision, People, Execution,
Product, Fundraising, Legal and Structure, and
Work and LifeBalance. Manyofthe examples
are personal experiencesfromthe entrepreneurs
themselves, integrated intoa cohesive narrative—
while atthe sametime ableto stand ontheir own.
Throughoutthe book,they debunk numerous myths
aboutstartups and reveal some surprisingtruths.
Theyexplain, for instance,thatthe core ofa startup
isnot always aworld-changing and earth-shattering
idea—infact, itis oftenthe casethatsuccessful
startups started out doing something else.They
also underscorethe efficiencyofexecution: great
entrepreneurs know how to synthesize data, make
a decision aboutthe path they are going down, and
execute.Andthey offer some alternativesto tradi
tional ways ofraising money,while stressingthat
you shouldn'tstartwiththe assumption thatyou
needto raise money.
[ continued on back flap 1
Do More Faster
TECHSTARS LESSONSTO ACCELERATE
YOUR STARTUP
David Cohen and Brad Feld
WILEY
JohnWiley& Sons, Inc.
Copyright© 2011byDavidCohenandBradFeld.Allrightsreserved.
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LibraryofCongressCatatoging-in-PublicationData:
Cohen,DavidG.
Domorefaster: techStarslessonstoaccelerateyourstartup /
DavidCohenandBradFeld.
p. cm.
Includesindex.
ISBN978-0-470-92983-4 (cloth); ISBN978-0-470-94877-4 (ebk);
ISBN978-0-470-94878-1 (ebk); ISBN978-0470-94879-8 (ebk)
1.Newbusinessenterprises-Management. 2.Entrepreneurship.
I.Feld,Brad. II. Title.
HD62.5.C635 2011
658.1'l-dc22
2010033309
PrintedintheUnitedStatesofAmerica.
10 9876543
Toourwives—AmyBatchelorandjil Cohen—with
happy amazementthatthey loveus.
Contents
Foreword ix
Preface xiii
AboutTechStars xv
Theme 1:Idea andVision 1
TrustMe, YourIdea IsWorthless 3
StartWith YourPassion 7
Lookfor the Pain 11
GetFeedback Early 15
Usage IsLike Oxygenfor Ideas 19
Forgetthe KitchenSink 23
Find That OneThingTheyLove 27
Don'tPlan.Prototype! 29
You NeverNeedAnotherOriginal Idea 35
Get ItOutThere 37
AvoidTunnel Vision 41
Focus 45
IterateAgain 49
FailFast 53
Pullthe PlugWhen You KnowIt'sTime 57
Theme 2:People 61
Don'tGoItAlone 63
Avoid Co-Founder Conflict 67
HirePeople Betterthan You 71
vi Contents
Hire Slowly, Fire Quickly 75
IfYou CanQuit,You Should 79
Build a BalancedTeam 83
StartupsSeekFriends 87
Engage GreatMentors 91
DefineYour Culture 95
Two Strikes and YouAre Out 101
Karma Matters 105
BeOpento Randomness 109
Theme3:Execution 113
Do More Faster 115
AssumethatYou'reWrong 119
MakeDecisionsQuickly 123
It's JustData 127
Use YourHead, thenTrustYourGut 129
Progress EqualsValidated Learning 133
The Plural of Anecdote Is NotData 137
Don'tSuckatE-Mail 141
UseWhat's Free 145
BeTiny UntilYou Shouldn'tBe 147
Don'tCelebrate the WrongThings 151
BeSpecific 157
Learnfrom Your Failures 159
QualityoverQuantity 161
Have a BiasToward Action 165
Do orDo Not,There IsNoTry 169
Theme 4: Product 171
Don'tWaitUntil YouAre Proud of Your
Product 173
Find YourWhitespace 177
Focus on WhatMatters 181
Obsess overMetrics 183
Avoid Distractions 185
KnowYour Customer 189
Bewarethe Big Companies 193
ThrowThingsAway 197
Pivot 201
Contents vii
Theme 5:Fundraising 203
You Don'tHaveto RaiseMoney 205
There'sMorethan OneWaytoRaise Money 209
Don'tForgetabout Bootstrapping 213
Beware ofAngel InvestorsWhoAren't 215
Seed InvestorsCareaboutThreeThings 219
Practice Like You Play 223
IfYou Want Money,AskforAdvice 227
Show, Don'tTell 231
Turnthe KnifeafterYouStick Itin 233
Don'tOveroptimizeonValuations 235
GetHelpwithYourTermSheet 237
Focus on the FirstOne-Third 241
Theme6:LegalandStructure 243
Formthe CompanyEarly 245
Choosethe RightCompanyStructure 249
Defaultto Delaware 253
LawyersDon'tHaveto BeExpensive 257
Vesting IsGoodforYou 261
Your Brother-in-Law IsProbably Notthe Right
Corporate Lawyer 265
To83(b)or Notto 83(b),There IsNoQuestion 269
Theme7:Work-Life Balance 273
DiscoverWork-Life Balance 275
PracticeYourPassion 279
FollowYourHeart 283
TurnWorkintoPlay 287
GetOutfrom behindYourComputer 291
Stay Healthy 295
GetAwayfrom ItAll 299
The Evolution of TechStars 303
WhatMotivated Me to StartTechStars? 305
WhyTechStars Started inBoulder 309
HowTechStars Cameto Boston 313
How TechStars Cameto Seattle 317
SoYou WanttoStartTechStarsinYourCity? 321
viii Contents
Appendix:TheTechStars Companies 323
Aboutthe Authors 329
Acknowledgments 331
Index 333
Foreword
hileentrepreneurscomein allshapesandsizes,theyallshare
the drive to do things that have never been done before, the belief
that they can accomplish anything they put their minds to, and the
need to get everything done as fast as they can. For a first time
entrepreneur, this can be daunting, but TechStars is like a turbo
rocketboosterfor the beginningofthejourney.
Zynga is my fourth company. When I started it, there were only
a fewventure capitalists who I wanted to work with, and Brad Feld
was one ofthem. The last fewyears have been a wild ride. We talk
aboutdoingthingsat "ZyngaSpeed"sowhenBradaskedme towrite
aforeword for a booktidedDoMoreFaster, Iwashumbled and eager
to have the opportunityto share some thoughts, as this isa concept
thatisclose to my heart.
If you aren't familiar with Zynga, weare the makers ofpopular
socialgamessuchasFarmVille,FrontierVille,andMafiaWars. When
Brad's firm FoundryGroup invested in Zyngain the fall of2007,we
were a team of10people. Today, threeyearslater,weare afamilyof
more than 1,200 people. To get there, wecertainly had to do more
faster.
Before starting my first company in the mid-1990s, I worked at
severalwell-regardedcompanies.However,Iwassomewhatofamisfit.
I challenged the status quo and didn't necessarilyfollowprotocol.
I was a bit naive and rogue in my desire to deliver the smartest
andmoststrategic resultswithout being concernedwithprocedures.
Thatwasn't necessarilythe bestway to ensure a career in corporate
America,soIdecidedIwasbettersuitedtobean entrepreneurwhere
I could do things myway.
AtthedawnofthecommercialInternet,Ico-foundedFreeloader
with Sunil Paul. Asfirst-time entrepreneurs, we learned as wewent
alongandmade plentyofmistakesalong the way. What welacked in
experience,wemadeupfor indrive,andbeforeweknewit,wewere at
the helm ofahotnewInternetcompanyfundedbyFlatiron Partners
IX