Good Founders Have Unapologetic Confidence + Tenacity: YC Female Founders Conference

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I attended the Y Combinator Female Founders Conference yesterday, the first event of its kind for the incubator. It was an oversubscribed, standing-room only event that took place in Mountain View and arguably it signals a change that caught me off guard.

It wasn’t that it was controversial. It was incontrovertible. Women are no longer an immaterial minority but rather a growing asset to the startup landscape. Everyone (man or woman) should understand the implications.

  • Although the audience was women, the conference was not focused women-centric issues. The theme was creating successful startups — speakers gave business-focused talks about solving real problems, monetization, and culture. They represented quality companies like Homejoy, Eventbrite, and VMware. There were some discussions around children and how being a woman can affect your success. But these were chapters in the novel of a conference where the thesis was about how to be a successful founder, not how to manage the negative implications of being a female one.
  • When asked the number of women in the audience who were founders, the majority raised their hand. The majority also raised their hand in response to how many were engineers. I was shocked it was so high.
  • The attitude was electric and positive. I’ve never seen such an enthusiastic audience. When Jessica expressed in a particularly vulnerable moment that she was nervous about the talk, someone shouted, “It’s AMAZING!” You don’t get that kind of support from most conference attendees.

BOTTOM LINE: It is clear to me that whether or not you choose to support the tide, the presence of female founders and women has already changed discourse in tech. We represent an untapped resource that is now pouring into the startup labor force and thought leadership. This is going to have massive implications for innovation and financing as we start to see an emphasis on understanding work-life balance, a renewed focus on traction vs. gender, and new discussions around internal culture.

All YC had to do was to set up an event but nothing in particular to wrangle or embolden the community (though I support Jessica in making this an annual event!). The community of women in tech is strong.

We are already here. And we are executing like crazy.

Below are my favorite pieces of advice from the speakers and you can watch the video here:

Jessica Livingston, Founder of Y Combinator

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34.5% of YC female founders have significant others for cofounders – This was a powerful statement (an anecdotal stat from her knowledge of YC founders, she admits), because it signals a changing forecast of the future composition of founding teams. She points out that while men in tech tend to start companies with other men who are their friends/peers from school, women often don’t have that personal network of engineers. An increasingly powerful source of technical talent for women is in their family and significant others.

Running YC is like running a startup – It’s funny to imagine YC as a startup because, as an entrepreneur, incubator programs like YC and 500 Startups are the low-acceptance, high-caliber programs that sometimes feel institutional. Frankly, we forget that YC was started in 2005 by 3 founders, and Jessica was one of them. She talked about being the non-technical co-founder and doing the Ops grunt work that many early-stage non-tech founders do — like delivering AC units to one YC’s first batches in the sweltering Massachusetts summer. She’s as scrappy as any of us, and it leant her credibility in my book.

You can combine work and life — it’s possible, but difficult – The slide she shared above is her “work-life balance” photo. She gave a nod to other speakers Julia Hartz (Eventbrite) and Diane Greene (VMWare), who had kids in the early stages of their startups. Jessica dove into the topic with hesitation, admitting that she was afraid to be controversial. I’m glad she shouldered the discussion and spoke candidly.

She claimed that when you have children, you don’t want to spend 12 hours working — you want to spend time with your kids. It really flagged an important topic for me when I approach that decision. I want to run companies the rest of my life, and now many women in tech do. We needs to be thoughtful about how we create that balance and who we picks as our partners to do it.

Adora Cheung, Founder of HomeJoy

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The first 1,000 days of Homejoy were the “Dark Ages” – No employees, lots of credit card debt, and $100 of revenue monthly: this is what the beginning looked like. NO ups, only downs. I’ve had the pleasure of talking to Adora one-on-one, and it’s refreshing to see her just as candid on stage.

They went through 13 separate pivots — a therapist marketplace, a celebrity gossip website, a “soul-sucking” content SEO play, etc. It wasn’t until her frustration with her co-founder’s dirty apartment forced them to find a cleaner, and she stumbled on the building blocks for Homejoy. But it didn’t just blow up from there. She then got a job as a cleaner herself after getting rejected for 2 weeks of interviews for the process, commuted from South Bay to the city on the daily, worked 8 hour days cleaning, coded in the evenings, then slept in her car to avoid the morning commute.

Now she’s raised over $40M in funding, does millions in monthly revenue, and has 1,000+ cleaners on the platform.

The clear takeaway is TO ENDURE. I loved her authenticity, and she had the audience in stitches with the hilarious portrayal of her scurrying around SF as a cleaner, trying to avoid people she knew.

Jessica Mah, Founder of inDinero

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Don’t run a company you can’t be happy with – Jessica’s story of starting inDinero begins with such momentum (hot financing, hot press, hot tub in office), that we were all on the edge of our seat. All the vanity metrics were growing, press was coming in like crazy, and the team was pumped on being the next Intuit.

It wasn’t until her mentor and professor, Steve Blank, came to visit that he advised her, “Don’t be afraid to pivot.” Jessica took a hard look at the market size and their ability to make a product that their customers care about and are willing to pay for. And the numbers just didn’t add up.

Jessica shared on-stage a 6AM e-mail she sent to her parents after a sleepless night. She said she felt like Bernie Madoff on the outside and needed to make serious changes to fix what was broken on the inside. We all laughed at the angst, but it was also incredibly moving. She had the courage not to live with her cognitive dissonance and instead make a difficult choice to let everyone go and re-think the entire operation.

Don’t be cocky, be unapologetically confident (and avoid office hot tubs) – Ironically, that office hot tub was the symbol of ego during her talk. She explains a transformation of her team focusing on vanity to focusing on customers. An office that goes from hot tub to humility.

A female VC shared with Jessica how investors were put off by her “strong personality.” At that point, Jessica shows a slide with her co-founder and her happily arm in arm. It’s a reminder that no matter what people say, you have to focus on what’s important — your team, your values.

She ends saying that she’s no longer cocky. But she is unapologetically confident. This is one of the most important traits any founder can have. And Jessica rocks it.

Julia Hartz, Founder of Eventbrite

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She is married to her co-founder and never knew anything else – The first question I’m sure most people ask Julia is how she maintains “work-life balance” when she’s married to her co-founder. She addresses the answer up-front by explaining how she started Eventbrite with Kevin when they were engaged, and she literally doesn’t know their married relationship in any other context. That doesn’t mean she wasn’t thoughtful about keeping their personal relationship strong, but that transition wasn’t as abrupt because it was de facto.

I draw a strong parallel because I did 2 startups in college, the second one that I got into 500 Startups for and now do today. When people ask me about this elusive balance, I tell them I literally have no other way of living my life. I think it’s a scrappy attitude many founders share.

Measure the satisfaction of your internal team – Julia is intensely focused on culture — I saw her speak on an Orrick panel about it, and that’s where I first learned the unique name for her staff: “Britelings” (gives me sort of a CandyLand, bubbly feel). She uses the Net Promoter Score, which is traditionally used to track customer satisfaction, to track Briteling happiness in the company. It’s a fantastic idea for quantifying culture, and she does this on a monthly basis.

Fundraising Panel

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If you wait until you feel “ready” to fundraise, you’ll never fundraise [Jamie Wong, Vayable] –  This is the #1 reason I see founders stumble in the fundraising process. As Jamie points out, you never actually wake up and say, “Today is the day I’m ready to fundraise!” She emphasizes getting in and getting out. Plan it in advance, make it a quick process, and get back to business.

Fundraising is painful and personal, it’s normal [Danielle Morrill, Mattermark] – Danielle shared her frustration in an interesting way. She explained how she wanted to be able to “turn herself inside out” to show investors what she saw of the future — if she could do that, then of course they would invest. Instead, it’s frustrating to rely on a deck tell the story. When you fail to communicate, it’s highly personal for a founder. We tend to internalize these failures and hold onto it until after the financing is over.

When I first raised money, I felt that same sense of isolation. I echo Danielle’s sentiment of being able to talk to other founders about it — even when you don’t want to bother your co-founders for a hug (which, I think, is totally acceptable).

Eli Sharef, Founder of HireArt

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Have confidence (especially as a woman) – This is a piece of advice I wouldn’t expect to hear from in a normal founder discussion. It’s simply assumed.

Eli shared her authentic story of when she thought HireArt would fail. Post-YC, all her batchmates had raised money and she hadn’t raised a penny. Sitting in her car, she got the email from Sequoia rejecting her and cried. She felt the heavy responsibility for her team and the failure of her “experiment.” Her co-founders told her to keep going — after having 70 meetings, go out and have 70 more. And eventually she did find the right investor who believed in her. And it took swagger and confidence to do it.

Kathryn Minshew, Founder of The Muse

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She was turned down by 11 accelerators before getting into YC – After so many rejections, Kathryn thought she was done — but an advisor told her to take one last shot and apply to YC. At this point, Kathryn and her team had been turned down by every single investor in NYC (investors told them “women in theirs 20s is a small market”). The interesting thing is her mindset even when they had been rejected 11 times and were looking at getting into one of the hardest incubator programs in the country — that no matter what, they were going to keep going.

They got into YC, have now raised over $2M in financing, and have grown a community that measures in the millions.

Diane Greene, Founder and former CEO of VMWare

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The humblest one in the room is often the most successful – I find it telling that she led with a humble story of starting a women’s hockey team. The team ended up using the old uniforms with the male hockey team and joining with women from Dartmouth to start. She then dove into a brief tale of her being a windsurfer.  I dug around and found that she, in fact, organized the first Windsurfing World Championship in 1974 and she was in fact a champion windsurfer.

Her great humility is evident in her speaking style — she leaned against the podium and was conversational. But she’s clearly one of the most successful. She led VMWare as the CEO for 10 years and it’s now a company that does over $4B in revenue.

Elizabeth Iorns, Founder of Science Exchange

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The most frequent question you’ll get asked is “Why did you start this?” – Elizabeth takes a unique spin on why it’s important to solve a real and personal problem — she frames it in terms of the #1 question you get asked as a founder. You get asked the founding story by potential hires, investors, customers, press all the time, and your most compelling answer is the genuine one.

There’s still a great deal of work to be done. Women only represent 17% of all computer science graduates and only 3% of tech startups are formed by women (Kauffman Foundation). Grassroots efforts like Pyladies, Girls Who CodeBlack Girls Code, and even this conference are all indicators of the movement that we’re already in the midst of.

I am thrilled for this to be an ongoing event. Thank you, Jessica Livingston, for having the courage to pull off an event as graceful and thoughtful as this one.

For all the women out there, keep persisting and walking with confidence.

If you went to the conference, I’d love to hear your commentary on if the dialogue was useful to you!

The Case for an Internet-Free Home

I’ve spent the last 7 weeks living without internet at home, and it’s opened me up to a world of deliberate intent and distraction-free creativity.  When I initially told people about the choice, I got a lot of raised eyebrows and pats on the back. I didn’t think it was so revolutionary, but I’ve gotten enough questions about this quirkly lifestyle choice that I’m writing about it here. 

Why I did it

Frankly, the idea didn’t start with deliberate intent. I spent the first 2 weeks back and forth with AT&T, who massively fudged up multiple appointments and calls. By that point, I actually enjoyed the solitude my lack of internet provided me that I dropped the effort. If it became unbearable, I could always flip the switch, right?

What I now have the space to do 

Suddenly I have time for unplugged interests: reading voraciously and writing frequently. Building meaningful relationships without electronic intrusions. Building a bike from scratch (in process).

Instead of being passively sucked into watching music videos of twerkin’ in San Francisco (don’t get me wrong, that stuff is hilarious), I now make deliberate choices about how I spend my free time — this includes internet usage.

If I want to go online on weekends, I make the time and intent to go to a coffee shop. Deliberately pointing yourself in a direction and committing to it is an enormously valuable skill in life. It enforces daily rigor and discipline. This point may not appeal to everyone, but I enjoy planning out my day and compartmentalizing when I’m in work mode and when I’m in play mode.

Letting the buzz of the internet melt away has also given me an environment to be more creative about my business. I don’t simply hop online and Quora my startup questions. I don’t try to find “best practices” from my favorite blogs (at least, not in the initial phases of thinking through a problem).

Instead I’m forced to be deeply introspective and root around for an answer that I internally populate. I’ve given myself license to create my own answers and thus be more creative.

Note: I do have a smartphone connected to 3G for playing music, looking up map directions, and answering urgent work emails. I limit my time on it anyways since I don’t have unlimited internet access. 

How to unplug

This can be as extreme as literally unplugging your wireless router (which could get your housemates pretty pissed). Otherwise, here are some tips to moderate your slavish urges to obey the internet gods:

  • Leave your computer at work or in the car. Creating physical space from your hardware also gives you the mental space and makes the act of retrieving it an effort.
  • Turn off push/fetch notifications on your phone. This is one of the single most distracting ways to puncture focus.
  • Set up internet “buzz-free hours” at home, when no laptop surfing is allowed. Spend that time getting a real buzz out at a bar with friends or indoors with wine and an awesome book.

Tweet me your best #liveunplugged tips. I may not respond immediately, but I know you and I have some offline things that are higher priority 😉

*This post was drafted in an internet-free environment with Pilot G-2 gel pen and paper

2 tweets made me go Paleo for my startup

“There were no red bell peppers in the Stone Age!”

“You can only eat raw meat, right?”

“Is butter allowed?”

These are the questions I face as I take on the Paleo diet, from outsiders who know little about this new culinary choice. It’s a little painful and awkward to correct people.

A lot of Chewse customers and potentials have reached out to us about meal options for Paleo, and they are definitely feeling the pain. As a founder, I want to feel that pain too.

Twitter _ Interactions-1

And even MOAR pain:

matt harley (mattharley) on Twitter-1

One of our core beliefs at Chewse is that food is an emblem of identity. That what’s on your plate has become just as important as what’s in your closet or who you hang out with. And nothing has reminded me more of this fact than when I challenge myself to take on Paleo for 30 days — and not simply a new diet, but a new lifestyle.

What the hell is Paleo

Paleo diets encourage you to eat the right fats, anything that moves (animals), and to avoid grains. The basic health principle is that modern foods disrupt our digestive system and lead to killer diseases — foods that we should never have processed for consumption. This includes bread (celiac disease) and processed sugar (diabetes). The two things I love most.

As a diet that’s less than 15 years old and somewhat crowd-sourced, there is no single answer. In my opinion, the diet tries to maximize two feats: living primal and living healthy (which are sometimes mutually exclusive). So when I get questions about why I can’t eat legumes (beans, peas, lentils, peanuts etc.) even though ostensibly they were around in primal/caveman times, I understand why it’s confusing.
Note: Legumes apparently are poisonous in their raw form, due to certain chemicals that need to be processed in order to prevent them doing damage to the human body. Chemistry nerds can read up here.

For a great infographic on the subject, check out Paleohacks. For a cheatsheet, I reference Paleoeffect. And when I want some damn dessert, I salivate over recipes at paleOMG.

Why founders should always feel pain

While I’m still unconvinced of Paleo’s magic, I do prescribe to the underlying principle that founders should spend some quality time feeling the pain of their customers.

I worked with administrative assistants to order company meals while at USC. And the painful 2 hours that I took to order a catering for 30 people was the most valuable 120 minutes I’ve ever experienced.

2 hours of pain brought me through 3 years of my startup.

You know when you see someone get stabbed in a movie and you wince? A little flesh wound can be good for you as a founder (please don’t take that the wrong way!). There’s something utterly visceral about going through what they go through — and that fuels your need to build a product or service that solves it.

Go feel the burn. Your customers will love you for it.

Why Fundraising is Like Rock Climbing

Like a good SF resident, my friend Francis Pedraza took me and my co-founder on a rock climb when we visited from LA.

Good thing: I’m ambitious, I haven’t climbed before, and I have a hunger for adventure.
Unfortunately: I have weak upper body strength, I’m terrified of heights, and I was wearing jeggings.

With the odds against me, did I do the logical thing and bow out gracefully? Hardly. An hour later, I was near the top of this immense rock wall, sweating balls, with Francis patiently belaying me below.

Welcome to fundraising, my friends.

Fundraise as a Rock Climb-1

Here’s the deal: hearing the story about how entrepreneurs raise their round should not be the blueprint for how you bring your round together. There are some basic principles of how your round could come together, and it might make you feel more comfortable to map out. At the end of the day, just accept that as a first-time entrepreneur you can’t strategize how money is going to come together.

Raising Money in 3 Parts

I credit this philosophy with a wonderful entrepreneur who came out of the TechStars accelerator, which teaches that most rounds are raised in 3 parts:

  1. 1st Tranche: The Beginner’s Ledge
    • This looks easy, but tends to be the hardest piece of the raise. Getting that first investor to look around the room, see no one else vouching on your behalf, and then writing you a check in spite of it — that is ridiculously difficult. It looks like an easy ledge to get you to the promised land, but you’ve still got quite an initial sprint to clear it.
    • These investors are typically angels that put in smaller $5k – $25k checks. You let them in to build momentum in the round, even in those checks aren’t substantial.
    • Full Disclosure: It took me 6 months before I landed our first investor. And boy did we land a key one — thank you, 500 Startups! Once we had them on board, we raised an additional $50k that month.
  2. 2nd Tranche: No-Man’s Land
    • This is where you start to transition to bigger checks, better-known angels, and even micro-VCs. The waiting period can often be a little longer, but worth it. These guys and gals are generally more strategic, they focus heavily on the team, but they needed to see social proof of other investors before writing their own check.
    • The rock wall at this point looks sparse. Rocks are either level with your feet (making you feel like your moving sideways instead of upwards) or far out of reach. Hold out for those farther boulders — they will catapult you to the final tranche.
    • We spent months floating in this period. Having Demo Day at 500 Startups helped push some of the bigger players in our round because of the forcing function, which was immensely helpful — we closed 25% of our round in the 48 hours before Demo Day.
  3. 3rd Tranche: Hundreds of Foot Holds
    • Once you get those strategic names in your round and roughly 1/2 to 3/4 of the round committed, things get a ton easier. The fundraising game starts to become more inbound, leads close quicker, and investors that may have passed or been non-responsive before are now returning to set up a call.
    • Boulders and footholds are plentiful at this part of the rockwall. With the right amount of boost, you’ll reach the top in no time.
    • You hold the most leverage at this piece to be choosey with your investors. I’d argue you should always be testing how investors add value to your round.

Have a belayer you trust

There’s a rock climbing technique called “belaying” that requires a second person on the ground, wearing a harness, who controls the slack and friction on the rope to make sure the climber doesn’t fall too far. That support person, the belayer, is your absolute anchor.

As a first-time fundraiser, my lawyer was my belayer (my co-founder was my moral support cheering from the stands). I can’t tell you how many times I asked Gaurav all the questions that I felt too dumb to ask investors. He was calm, patient, and strategic. I trust him, and he has the informed experience that comes with seeing seed-stage deals consistently.

The decisions we came to together put my company in a strong position for success — not only helping me scale this wall, but he’ll definitely be my partner for future climbs. Find a lawyer you trust. I’m happy to refer you to ours 🙂

Don’t innovate on your financing, innovate on your business.

I was tempted to try to try to think of new, creative, quick ways to raise money — to effectively “outsmart” the round. But doing this is not only a complete waste of time, but it could be a red flag to established investors who would be stellar to bring onto your round. I would recommend using the Y-C standard termsheets and not spending more time tricking out your docs.

It might be helpful to set expectations for your round based on what others have done. Our law firm, Silicon Legal Strategy, released a Seed Financing Report this month that would have helped me understand what I was getting into.

Understanding your audience is key, so I would get familiar with the economics of angel investing. You’d be surprised how easily someone can “drop” a $50k check, unless you understand how it fits into their portfolio theory. Don’t let it surprise you when a 30-minute cup of coffee translates into six figures of investment.

“I knew you wouldn’t give up.” 

Francis will probably laugh remembering this story. I was perched near the top of that wall for a while trying to overcome the sheer exhaustion of getting to that point. But some odd mixture of pride and ambition forced me to the top, and I definitely refused to give up (as Francis pointed out when I was finally roped back down, happily panting and exhausted).

Fundraising requires that same tenacity. I hope your journey is shorter than mine.

5 Steps to Making the Most of an Accelerator

I can’t explain the depth of my gratitude to the 500 Startups family of networks and mentors. They’ve housed, loved, overwhelmed, and accelerated the Chewse team, from co-working space to Demo Day:

500 Startups

As an ode to my experience at 500, I’ve prepped a brief guide for any newbies entering an accelerator — I was part of the 500 Startups Winter 2012 Accelerator, but I’ve spoken with founders from TechStars, Y-C, Angelpad, MuckerLab, and others. The expectations from these high-caliber programs are similar enough for me to write generally for. You can read about the different thesis and comparisons between the programs if you sniff around — I’ll let others handle those debates:

500 vs Y-C from Dave McClure’s perspective
Y-C vs TechStars discussion on Quora
Angelpad vs Y-C discussion on Quora

A note about terminology: accelerator vs incubator

The terms “incubator” and “accelerator” have become interchangeable. I only looked into this because 500 Startups very clearly brands its program as an accelerator.

Brad Feld, the founder of TechStars, has the most nuanced explanation. He argues that incubators refer to the program where ideas and teams are incubated in-house. These are often formed in connection with a venture capital firm, but without a formalized program of seminars, mentors, and Demo Day.

Accelerators are an incredibly focused program that are mentor-driven — meaning that you have a limited amount of time (4 months for 500) where a maximized amount of the network and its teachings are opened up to you in a more curriculum-based format. As Feld puts it, “in 90 days you get 2 years worth of really focused effort.”

I would consider any program with an application process, mentor-driven focus, and established timeframe an accelerator — so I’ll be using that term.

Step 1: Figure out a cogent reason for joining the accelerator, then set a goal

You’re staring at the “submit” button on the Angellist application to your dream accelerator, or you’ve received the call from Dave telling you to pack your things and head up to the exciting town of Mountain View to join the next 500 batch (congratulations, get ready for mayhem!)

Sit down with your co-founder/team NOW and come to a consensus on the one thing you want out of the program. That way, you don’t look back at 4 months of “heads-down” work and a piece of equity gone, and wonder what you actually achieved.

Your goals may be to use the capital to hire, to build shit faster, to learn a ton, or just to launch your beta. I’ve had founders tell me that they want to join an accelerator to be with other companies facing similar challenges. The camaraderie sentiment is touching, but an accelerator is an expensive way to hang with other founders at the same stage — if this is truly your goal, I would join a trusted co-working space instead. (Usually) no equity, similar community.

My goal at 500 was to establish a strong, value-add network of founders, startups, and investors to help us in our fundraising efforts. And $1M in capital raise later with an incredible network of 500 founders and mentors, I’m happy to say we’ve met our goal.

Step 2: Get some sleep before the accelerator, you may not get much during it

Tired Tracy @ 500

You’re stuffing your luggage, packing for the journey ahead. Shirt with company logo? Check. Startup stickers? Check. That folder you got for free at that event at Box? Nice. All chargers secured? You’re almost set. How do you really mentally prepare for this foray into the land of startups?

I’ll admit, I got sick 3 times during the 4-month program. The most epic instance was at the SF Demo Day, when I was literally on fire with fever.

Okay, the point here is that I definitely exhausted myself during the program. I have a ton of thoughts on work-life imbalance, but I’ll leave it at this: give yourself permission to rest. What founders don’t share enough is that pitching is exhausting work — 3 pitches in 1 day, and you’re entitled to an early night’s rest. I often found myself feeling guilty for coming back in the afternoon wiped out, and I pushed myself to work just as hard as if I hadn’t been out pitching at all (e-mails don’t rest, why should I?).

But this is certainly a work in process for us all 🙂

Step 3: Build meaningful relationships from Day 1 (especially with past founders)

It’s the first day of your shiny, new accelerator experience — and the room is humming with 100 other entrepreneurs. There’s free food, shirts decked with strange names ending in “-ly,” and a sensation of being utterly overwhelmed.

500 Orientation

Going from a young, budding tech scene in Los Angeles to the entrepreneurial powerhouse of 500’s network (largely in SF, though truly international) was overwhelming. It was like my high school/college transition — I went from a 500-person high school to a 30,000-person university.

That’s why I spoke with 17 founders in the first 3 weeks of the program, trying to figure out how to best leverage being in an accelerator. There’s no manual or guidebook. The teachings you learn are tribal, so hit up the tribe immediately.

And the tribe taught me a ton. Those early relationships have blossomed today in unexpected ways. Some of those founders have served as investor reference checks, employee reference checks, first money in the round (you never know who invests), insiders to the Valley, pitch partners, drinking buddies, and close friends. #500STRONG

Just because you’re attached to a mythical brand like 500, however, doesn’t mean that these relationships form themselves. Again, revert back to those carefree college days and think about how you made friends there. I shocked myself with how I initially forgot to pass my fellow founders/mentors through the same filter that I pass new friends through. Build relationships of value as you do in all spectrums of life. Don’t feel pressured to build a meaningful relationships with everyone — sometimes you just don’t click, and that’s okay.

You’ll also be surprised at who in that network invests. It could be previous founders or mentors. Or the accelerator following on. Or an investor in the accelerator (known as a limited partner or LP) doubling down on you.

You will never have the guaranteed sheen of a new toy as you have when you are in the midst of the program. Once you graduate, you lose a lot of that natural momentum. Take advantage of it immediately.

Step 4: Pitch early, pitch often

I was pitching my startup from Day 1 and spending 90% of my time on it. All for the splendor of epic photos with slightly blurred backgrounds from Demo Day.

500 Startups_Me

You learn quickly that as a founder, you’ll be pitching forever — whether or not you’re fundraising. You have at least 3 different pitches: to investors, to hires, to customers (oh yes, and if you’re a marketplace, to the other side of the market). See why pitching gets so confusing?

Specifically for fundraising, you want to have smart people pummel your pitch early on. Ideally before your first investor coffee, and DEFINITELY BEFORE DEMO DAY. In hindsight, I would sit down with 5 mentors/founders and have them nail me with questions. Make sure you feel at ease, not defensive. Ensure that you look comfortable instead of having the terror of walking to the guillotine.

In my opinion, investors aren’t necessarily looking for a right answer to their line of questioning (if they knew the right business answer, likely they would have started/funded your competitor long ago). They want to see confidence in the founding team and the nuanced  answer demonstrating the great deal of thought into your business.

Besides, don’t you wake up in the morning and go to sleep at night thinking about your startup? If not, reconsider joining an accelerator in the first place.

Start getting practice now for being a good CEO/leader in the future. Practice your pitch with rigor.

Step 5: Demo Day and why graduating from your accelerator is a lot harder than graduating from college

You’re standing in the auditorium where Demo Day is about to go down. Press surrounds the rows of chairs set up facing the stage, and investors are placing their name tags over their crisp, blue shirts. You’ve made it through an intense round of practicing your pitch with your peers, but oddly your palms are still sweaty as you reach for your business cards to hand out like candy.

Demo Day Madness

Demo Day is what I consider graduation from startup school. But instead of you taking the stage with a hangover and gallantly grabbing a diploma before heading to family brunch, Demo Day requires you taking the stage to pitch your lifeblood in front of hundreds of investors. It’s an incredible opportunity for access to a highly-qualified pool of potential investors in your startup. I’ve written in-depth about the heat-seeking weakness missiles and kryptonite cough syrup you consume in preparation for Demo Day pitches. Read it, and consider yourselves warned 🙂

The accelerator’s job is to provide access, press, and momentum surrounding the big day — and it’s your job to close the opportunities.

It has become well-known fact among accelerator alumni that Demo Day will not rain dollar bills (there are other places to go for that). People will tell you not to expect to close money. If you don’t start fundraising early, expect first meetings to come from Demo Day. In my experience, if you start fundraising early, expect to close money at Demo Day.

After seeing us at the first Demo Day, here’s an awesome text I got from an investor before the second Demo Day:

Investor Text

Once I went on-stage and spoke about closing in on 87% of the round, I get this delightful tweet from another investor:

Tweet from Investor

We literally closed 25% of our round in the 48 hours before the first Demo Day (500 Startups has multiple days). We started raising 3 months prior to that, and it was one of the best decisions we made. If you have the necessary traction, I highly recommend starting to fundraise several months before Demo Day. It can certainly shave time off your fundraise later in the process (companies have closed as late as 5-6 months after Demo Day — this puts a huge crimp in your timeline post-accelerator, where you are ideally focused in on company-building).

I’ll write a separate post dedicated to fundraising, where I was initially a complete failure at. Generally, it’s advisable to close 50% of the round before Demo Day. Figure out what milestones you need to get there, work those into your goals, and get cooking.

People are everything

Accelerators aren’t for everyone. And they aren’t free. The view of the “startup promise land” doesn’t even hint at the long journey to get there.

But if I want to hear one thing about why you want to join an accelerator, it’s this:
I want to hear you’re so passionate about your startup, you’re eager to let smart people take a part in building it with you. Continue reading

Preview Day taught me to be human

Preview Day is a private event here at 500 Startups that involves a bonanza of 30-second pitches from portfolio companies (including mine, Chewse). I’ve learned a lot from the preparation process — mainly the importance of being a lot more human and open to fuck-ups.

George Takei does not endorse this pitch.

Learning to be vulnerable for Preview Day
For the past 2 weeks, my 500 Startups batchmates and I launched into preparation for Demo Day – what I think of as “graduation from startup school.” 500 Startups does an incredible job of rounding up the tribe of mentors, LPs, and investors to drop into the space and offer us constructive feedback on our pitches.

Okay, that’s the nice way to put it.

It actually feels like a relentless barrage of heat-seeking missiles aimed at all your weaknesses. It feels like kryptonite condensed into cough syrup that is then less-than-lovingly shoved down your throat.

I embellish slightly, but only to illustrate how much the process wears on you personally as a founder. I heard a mentor tell a founder that he shouldn’t be the person to pitch his own company. I was personally told at one time that I wasn’t telling my best story. Can you imagine how all these criticisms about your pitch end up feeling like reflections of you?

So here’s the secret: As a founder, you must learn to open up instead of closing off.

At many points of the process of pitching and fundraising, you feel like a rag doll volleying between bits of advice. But ultimately, you have to embrace feedback, come to terms with your emotions, and be real. It makes you human. People like to work with humans, investors like to invest in humans, and being relatable is an important piece of building charisma.
Being brave means being human
I was blown away the first time I watched Brené Brown’s TED talk on The Power of Vulnerability — and I’m still learning things each time I watch it.

BIG takeway: Being vulnerable and being courageous are not mutually exclusive. In fact, being vulnerable is incredibly brave.

As entrepreneurs, we are vulnerable to risk, inexperience, and failure. I especially relish the story of the original Zappos founder walking into shoe stores and being laughed at for suggesting that he could sell off the majority of their inventory just by posting it online. Or how the Yelp crew took to the streets to sign people up by hand with a good old-fashioned clipboard. And how it took them 8 years to IPO.

Brown points out that the word “courage” is based on the Latin root cor — which means “heart.” Being courageous is not being the fearless leader who can charge into a room, hide all emotion, and lead stoically. In fact, it’s the person who can embrace the fear of being vulnerable and tell the story of who she is with her whole heart — that’s the brave one.
How an Argentine taught me to dance (of course!!!)
One moment in particular sort of zapped the human back into me. The other founders and I are backstage doing a dress rehearsal for Preview Day at the 500 offices. The views overlooking the South Bay were stunning, the event music bumping, and I’m sitting in the back…looking ready for an earthquake to hit. In all honesty, I looked pretty stern getting my game face on.

Enter Ricardo, the founder of Femeninas. He’s from Argentina, has a classic Latin accent, and he’ll tell you just what he knows about Spanish women (you have to see his pitch to understand). He doesn’t just look calm – his whole face is lit up. He’s certainly nervous, but you can tell he’s damn well going to have fun with it.

He notices my stonewall expression and tries to make me laugh. I’m trying to be the zenith of calm here, the Buddha of the Bay, and he’s trying to break my focus. But his smile was pretty damn infectious. And smiling is definitely worth it.

That’s when I realized I was making a desperate attempt to be stoic and emotionless – that’s not even human, it’s not even me! I woke up, popped up, hopped around. I just gave in. 
The end result? I didn’t just walk on stage for Preview Day, I danced onstage…with 100 investors watching.
Getting heated is hot
It’s okay to get a little nervous, it’s great to show passion, it’s ideal to embrace being human.

I share this story not *just* to be self-deprecating, but hopefully to give you the safety line of humanity to hold onto when things get rough. It’s a safety rope, people, not the third rail.
So the next time I pitch my startup or coach another, expect me to be a little heated, a little passionate, and thoroughly human.
Many thanks in the Preview Day pitch process to my two North Stars: Jeff, my co-founder, and Khailee, 500’s Entrepreneur-in-Residence. These two worked countless hours with me to quell my fears, challenge my assumptions, and offer a solid hug when the time came to go on-stage.


You can hack growth…can you hack happiness?

My community ain’t no hack
(my co-founder and I enjoying dinner with our families)

(I’ve taken the Everest Step a Day Challenge to be a more consistent blogger. It’s fitting that embarking on this journey of personal achievement begins with a post about happiness!)

As I dive into reading Gretchen Rubin’s The Happiness Project, one big theme that strikes a chord with me is the idea that happiness is not the destination. It’s not just the final scene of falling in love — rather, it’s the butterflies from the first date, the thrill of the proposal, and the eventual joy at the altar. The secret to sustainable, long-term happiness is building it incrementally.

Then Rubin quoted William Butler Yeats: “Happiness is neither virtue nor pleasure nor this thing nor that. But simply growth. We are happy when we are growing.”

I later met with Andy Johns, a 500 Mentor and Chief Officer of Growth at Quora (and formerly of Facebook). He dropped some knowledge: the key to user growth is to build it incrementally. If you can grow 3% week-over-week, you’ve got 5x growth in a year. Growth is built on small bits that are measurable and, eventually, create enormous impact.
That got me thinking — is true happiness much like true growth?
  1. They both involve community. 
    The best engines of high growth and high happiness involve community that feeds back into itself.

    One of the stories that weaves itself into the documentary “Happy” is about a Danish co-housing community. Multiple, unrelated families share one roof, they care for the children of others as though they were their own, and they help one another with domestic tasks. Although the prospect sounds crowded at first, the correlations are astonishing. It is the relationships from the community that bring every member happiness — and apparently this happiness of community is a part of Danish culture (they do enjoy the title of Happiest Country on Earth). Here’s a great overview of the documentary.

    Similarly, it is often the best startups that build community around their product, and build platforms for meaningful relationships. Path is the most striking cases of this (though community, arguably, is their product). The social network puts a cap on your friends you can follow: 150 people. That’s Dunbar’s number, with the theory that 150 is the maximum number of meaningful, stable relationships 1 person can sustain at any given time.

    I also love Grasshopper’s rebranding stunt of sending people chocolate grasshoppers and how they tied that into a community of influencers. You give to people, and they give back to you. Growth is certainly recursive.

  2. Beware the false highs.
    It’s not the big press releases (often followed by the infamous “Trough of Sorrow”) that will launch your startup to sustainable growth, although the temporary highs can be fun. And we all know that the short-term highs of heavy alcohol consumption can lead to the saddest of sorrows the morning after.

    “Happy,” the documentary, goes in-depth into the 3 things that people often mistake for happiness: money, status, and image. The scientists who’ve studied the subject put forward 3 real indicators for happiness: personal growth, the desire to help, and meaningful relationships. Note how the first bucket of indicators can be lost with the crash of the stock market; but, if you’ve truly put effort into the second category, these things are far less fleeting.

    We talk a lot about user growth at 500 Startups. Josh Elman came to speak about his experiences at Twitter, while Julie Zhou chatted about growth at Hipmunk. There’s been a new term thrown around called “growth hacking” — love or hate it, there are literally titles like “Growth Hacker” or 500’s very own “Growth-Hacker-In-Residence.”

    While hacking with limited resources is an important part of being a startup, growth hacking is a myopic and paradoxical term. You can certainly hack certain pieces of your business (ie. AirBnB hacking Craigslist listings to grow their rental supply) to kick things off. But to truly build growth, you’ll have to come back to your hack and bake it back into your long-term vision.

  3. It’s elusive, but once you’ve got it, you know it.
    Louis Armstrong (founding father of American jazz) croons, “If you have to ask what jazz is, you’ll never know.”
    Marc Andreessen (founding father of Andreessen Horowitz VC) blogs, “You can always feel when product/market fit isn’t happening.

    Happiness and growth, untracked, are nebulous concepts to “achieve.” The journey aspect is probably a big reason why, but I think there’s a time when you can say you are truly happy at that moment, or that you are hitting satisfied growth benchmarks. Andreessen also argues that startups “can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers.”

    Growth and happiness may be elusive, but if you have it you’ll feel it. 

Can you hack happiness?
In short, no. Happiness certainly isn’t one-off. For those who haven’t read about the “hedonic treadmill,” it describes our tendency to get used to things that once spiked our happiness points. So while those first moments spent with your new iPhone 5 were beyond glorious, you eventually get used to the brilliant piece of technology in your pocket. Louis C.K. has a hilarious stand-up about how we’ve taken something as simple as flying for granted:

So here it is: happiness IS growth. Happiness flourishes when you push outwards and fight the treadmill of settling into complacency.

Happiness cannot exist without growth, and growth cannot feed itself without happiness. 
User growth, personal growth, community growth…it’s all in there. Perhaps it’s time to revisualize our happiness tendencies to go from a treadmill to a staircase — always pushing away from that last milestone, and moving ahead.

I challenge you not to settle into the mindset of small hacks, but create a sustainable environment of growth. Hopefully, that brings us all a little closer to being happy 🙂