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Startup Lesson from Max Levchin

Over on Quora, Max Levchin provided a great response when asked about his greatest lessons in entrpreneurship:

Among Max Levchin‘s lessons learned as a young entrepreneur, which are the greatest?

It’s usually better to have a cofounder than go it alone.

Being an entrepreneur is not about being in love with an idea, it’s about being in love with running a company.

Having a highly homogeneous (background, education, values, preferences, etc) very early team is better than not — cuts down on time-wasting arguments.

You can have successful teams where people hate but deeply respect each other; the opposite (love but not respect among team members) is a recipe for disaster.

If there is any doubt about hiring a candidate for your first 5-6 positions, there is no doubt — do not.

You cannot hire a cofounder.

Do not allow senior managers to develop long-term grudges against each other. You will have to arbitrate those later, a huge time sink.

All compensation information eventually becomes public, and usually eventually == very quickly.

In many cases “working from home” is not really working.

Most often, when someone wants to leave your company, you should let them. Chasing them with offerings of money and power messes up the incentives of others.

Intra-office romance is usually (but not always) bad news.

Figure out one thing each of your investors is genuinely really good at, and insist they help you with that. Among other things it will save you from their help in other areas.

Consider on occasion whether the adjective “relentless” applies to your team. If not, you probably need to step it up.

Leadership by example is the most effective type. If you expect the troops to crank through nights and weekends, better be there yourself, even if you aren’t actually involved in the task at hand. It’s a little irrational, but it inspires people.

One usually raises money on great story or great results. Raise before, or right after launching. Don’t plan to raise a few weeks after launch.

Having a large and complicated cap table is rarely a good idea. Few committed angels is better than $5k from everyone and their brother.

Board meeting should never be product strategy debates. Double true that for product tactics.

Have a cardboard box at board meetings where attendees must deposit their mobile devices at the start for the entire duration of the meeting. At the very least suggest that idea.

Serve food at board meetings.

If you have a cofounder, give them a board seat. If you can, keep one more for yourself, and leave it empty. You’ll need it later.

Cofounders (under usual circumstances) should have same amount of equity.

Raising money between May 20th and August 10th, and Nov 10th through January 15th is somewhat harder than during any other time of the year — many VCs vacation during those times.

Never, ever agree to participating preferred.

Redemption rights are actually OK (it seems to be an East Coast thing), if placed a bunch of years out. Startups shouldn’t be in a limbo for that long anyway.

If you are going for a big raise at a huge valuation, consider the resulting pref overhang (and its impact on future employee motivation) very carefully.

You are not designing for yourself, and shouldn’t be. Most people using the Web don’t understand (most of) what makes it work and don’t want to. Design for those people — there are many more of them than you

8 companies launch at 2011 Brandery Demo Day

Yesterday we launched our eight 2011 graduates at Demo Day.  In front of a crowd of over 350 investors, the companies did an amazing job and we could not be more proud.  The 2011 graduates included:

  • Choremonster
  • Keepio
  • Leap
  • Receept
  • RentShare
  • Roadtrippers
  • Spaciety
  • StyleZen

We received a great write-up from Tech Cocktail while Laura Baverman from the Cincinnati Enquirer provided live updates throughout at Enter Change.

Mentor Advice for Startups

“Be committed to your strategy but don’t fall in love with it. Go steady but don’t get married. You have to maintain the passion but retain enough objectivity to know when something isn’t working and a new direction is needed. Most startups go through several strategic shifts before they find the right formula.”

Michael S. Vanderwoude, Vice President and General Manager of Cincinnati Bell

Mentor Advice for Startups

“Always stay in learning and listing mode – Too many companies pitch to me and press forward with a sales pitch without pausing to listen to questions and heeding advice.”

“As Socrates said, “He who is wise admits he knows nothing,” and we all are learning together in this brave new world.  If you do not seem to be listening and open to feedback or pivoting, then you may never succeed.”

Bob Gilbreath, Chief Marketing Strategist at Bridge Worldwide

Mentor Advice for Startups

“Get your product/service right. Make it great/different by focusing heavily on the end-user. Start with a profitable business model – don’t scale without one.”

-Michael Stich, Chief Operating Office of Rockfish Interactive

Mentor Advice for Startups

“Focus on building a business and not a business plan. Develop a product that interests customers and investors will follow.”

-Joe Medved, Chairman Emeritus of the New England Venture Network (NEVN)

 

Startup Interview: ChoreMonster

Choremonster is a suite of web and mobile applications that allow parents and kids to actually enjoy doing their daily chores.  By completing a chore, a child gains points, which they can save up for real life rewards, such as an Xbox, an hour of television or even a canoe trip.  Choremonster is reshaping how families think about their chores and responsibilities. By creating two individual apps, one for the parent and one for the child, Choremonster allows children to track their chores on their own and choose when and how they will complete them, teaching them better habits that will last a lifetime.  Chris Bergman, the founder of ChoreMonster, answered a few questions we had for him about the company and why he chose the Brandery.

What inspired you to start ChoreMonster?

“Paul loves to create monsters. As a kid, I hated doing chores. I wanted to create an application that adds value to families and gives parents a tool to utilize positive reinforcement over punishment. Paul and I love creating unique and engaging experiences. After a few quick conversations, Choremonster was born.”
 

Which presentation or mentor has contributed to ChoreMonster’s startup strategy development so far?

“There have been so many amazing people! The Brandery founders themselves, JB, Dave and Rob, have been a monumental help. Hearing Blake Mizeraney’s story of Heroku was very encouraging. As far as mentors, the advice of Thad Langford, Joe Dinunzio, Rob Heimann and Susanne Tosilini has been invaluable. 
Also, everyone at Cincytech, Mike, Justin, Carolyn, Bob, Raul, has been helpful beyond expectations.”
 

How did you find out about the Brandery?

“Hah! I was having lunch with JB Kropp one day, telling him about Choremonster. Kropp then dared me to apply for the Brandery and here I am.”
 

Why did you decide to come to the Brandery?

“It’s the opportunity of the lifetime and it’s in our backyard. The Brandery has already opened doors that I never thought possible. It was a chance to make some amazing things happen.”
 

What is the best piece of advice for starting your own company you have received?

“Even in literature and art, no man who bothers about originality will ever be original: whereas if you simply try to tell the truth (without caring twopence how often it has been told before) you will, nine times out of ten, become original without ever having noticed it.” – C.S. Lewis

Mentor Advice for Startups

Understand what your three top priorities are and have an unrelenting focus on those things. Chasing money, people, or features that either can’t be caught, or require considerable effort to catch, are a waste of time during your first year. Write down your top three priorities, read over them every single day, and say “no” to everything else.

Also, problems are solved while relaxing so take some time to do things you enjoy outside of your startup. It’s amazing how solutions will find you when you’re away from the business and challenge.

Kenny Tomlin, Founder & CEO of Rockfish Interactive

Startup Interview: Wellthy

Wellthy is a social competition for employees that makes getting healthy fun.  They turn corporate wellness, which traditionally has very low participation, into a fun and motivating social-game.  We sat down with James Dickerson, the founder of Wellthy, to learn a little more about his company and his experience at the Brandery.

What inspired you to start Wellthy?
“I’ve always had a passion for health.  My previous job opened up my eyes to the problems that having unhealthy employees can create, and I knew that there had to be a better way.”

Which presentation or mentor has contributed to Wellthy’s startup strategy development so far?
“It’s tough to say since there are so many great mentors and talks, but I really love to hear from the entrepreneurs who have done it before and have faced the challenges we face every day.  Geoff Allen from Ziplist gave a great presentation and mentors like Tarek Kamil as well as Logan Lahive from Lightbank have really helped us along the way.”

How did you find out about the Brandery?
"I’m from Cincinnati so I heard about it last year when the 1st class was going on.  I set my sights on it and said, ‘I want to be a part of that program.’ "

Why did you decide to come to the Brandery?
“It’s one of the top ten programs in the country and it’s right here in Cincinnati.  The mentors and connections are great.”

What is the best piece of advice for starting your own company you have received?
“You’re never going to get it 100% right, especially the first time.  What separates the winning entrepreneurs from the losers is the fact that some will never give up no matter what.”

Mentor Advice for Startups

“Get the founding team right.  Build the right team culture, and assume lots of iterations.”

 -Pete Blackshaw, Executive Vice-President of Nielsen Online Digital Strategic Services

Startup Interview: Receept

Kevin Pfefferle, age 30, created Receept as an alternative to collecting receipts.  Rather than routinely collecting paper receipts, Kevin makes it simple by combining web and mobile devices with the ability to store receipts from any device.  This will not only be helpful to the consumers, but also with customer bases for merchants by tracking brand loyalty.

This interview gives us a little more information about Kevin, his company, and how the Brandery has helped him.

What inspired you to start Receept?

“I would say it was a personal frustration.  You can see how the banking industry has made great electronic advancements, but there was a lack of advancement with paper receipts.   Keeping track of all of those receipts by holding them in your wallet or purse was just very frustrating, and I wanted to change that.”

Which presentation or mentor has contributed to Receept’s startup strategy development so far?

“The first I would say is Eric Bishop, who came from Procter & Gamble and now works for Rockfish.  He approached the idea for electronic receipts from a brand marketer’s perspective and made me think more about how Reecept can help measure and track brand loyalty.

Lucas Watson, who is also formerly from P&G and now works for Google, is another mentor who gave me great advice. He had really focused insight into what I was doing right and wrong, as well as where I should most focus my energy.  His perspective was really invaluable for the way I think about the future of Receept.

Finally, Dave (Knox, co-founder of the Brandery) has played a really huge role in connecting me with a wide variety of mentors and partners who have played integral roles in Receept’s current direction.”

How did find out about the Brandery?

“Well, I’m from Columbus, so I was pretty well aware of the startup world in Ohio.  When TechStars made their network announcement, I found that the Brandery was the closest to home.

I wanted to be a part of an accelerator that was considered high quality within the startup world, and it worked out perfectly that the Brandery was nearby. I have a daughter at home (in Columbus), so location was a very big factor in deciding on joining the Brandery because the commute would be fairly easy.  On top of that, I had heard several recommendations from well-respected individuals in the startup world to check out the Brandery.”

What is the best piece of advice for starting your own company you have received?

“‘Just do it.’  When I was working on Receept, it got to the point where it’s really time to stop talking about what I was going to do and just simply do it.”