Startup exits—or “liquidity events” as they call them in the biz—are great. And when the exits are multiples of the amount of capital a company has raised, they’re great for both the founders and the investment community. But sometimes the impact of those exits and their impact on the Portland startup community can be a little more nuanced. So I thought I’d share some thoughts on why the recent Cozy and Radar exits are important to our community.
Sometimes, startups forget to stop, assess, and share the lessons they’ve learned. But when they do? It’s pure gold. And incredibly helpful guidance for other startups and entrepreneurs and would-be entrepreneurs.
That’s why I’m really glad that Matt Hixson took a few minutes to share his insights on his startup. Read More
[Editor: Thanks to Paul deGrandis, Vice President of Engineering at Tutorspree, for sharing his wisdom in this guest post. Interested in more insights? He’s speaking on Tuesday night.]
I have been working in tech startups since the age of fifteen and the first “.com” bubble. I have had the pleasure of working with some of the smartest and most influential people in software, building up some of the most successful companies, and helping others move their ideas and dreams forward. Read More
I’ve spent the last few days in Austin, TX, at SXSW Interactive, the annual gathering of some of the best and brightest Web types sharing their experience and ideas.
But it’s not all about the presentations. Truly, it’s all about proximity. Because every presenter, every leading thinker, and every attendee have plenty of time to talk with one another over meals or over a beer.
Suffice it to say, if you’re looking to get the chance to chat with the folks who are influencing the Web, this is a target rich environment.
This year, I went to SXSW with the intention of learning more about other entrepreneurial communities. To uncover ways that other metropolitan areas were trying to make their communities stronger in order to capitalize on the talent of creative developers.
I managed to make some great connections and learn a thing or two. Here’s what I took away from the conversations.
Portland is not a special snowflake
It’s no secret that I think we’ve got a phenomenal Web, mobile, and open source community. I think the mix we’ve got is special. And there’s little doubt that I think we have the single most amazing technology community anywhere.
But I also admit that I may be a little biased.
Still, for all the love I have for Portland, we’re not unique in our struggles to foster an entrepreneurial community that helps the brilliant people of the Silicon Forest earn a living doing something that they love.
There are communities all over the US trying to make this work. Some of them are taking steps similar to Portland. Some of them are coming up with new ways to deal with the solution. Folks from Asheville, NC, are finding ways to fund projects with government dollars. Boulder is running a series of Ignites that are continuing to draw the community together time and time again. People in Houston and Kansas City are using coworking spaces to get members of the community working together and sharing ideas. DC is using things like Tech Cocktail to help facilitate connections—and the tech scene is getting the opportunity to advise the local government on issues. And the guys at Silicon Prairie News are pulling in some amazing speakers for Big Omaha, an event that will help solidify their entrepreneurial community.
I’m hoping to spend more time with these folks over the coming months, visiting their communities, learning more about what they’re doing, and sharing more about what Portland is doing.
It looks like the trip to Seattle Lunch 2.0 was just the first of many diplomatic missions.
Funding for Portland projects must come from investors in Portland
Another conversation that repeated itself throughout the conference was the discussion about how to fund an entrepreneurial environment. And time and time again it came back to one simple point: for funding to work, it has to be local.
Now this works one of two ways. You either make your locality where the money is—by moving to the Valley for example—or you find local money to fund your project, local angels to invest in startups, and local funds to support larger investments.
Obviously, I’m leaning toward the latter. (And that’s what makes tonight’s Nedspace event especially well timed.)
Portland has a great deal in common with China
You heard me right. Yes, yes. It surprised me, too.
I didn’t intentionally go to the conference to learn about the entrepreneurial environment in China. But as I began to learn more and more about it, I realized that the Portland startup scene had a great deal in common with the Chinese startup environment.
They’re building phenomenal products in China that none of us know about. They’re pushing technology in ways that rival or eclipse our ability to deploy it. China is perceived to have a wealth of development talent that outside companies want to tap. They’re attracting more and more entrepreneurs who see China as a land of opportunity. And the Chinese want to do business—but they want to do it on their terms.
Sounds pretty familiar to me.
Portland can succeed in Portland’s own way
Finally, the overarching theme of the conference sounded eerily similar to something I’ve tried to champion in Portland: Work hard at doing what you love and you will succeed.
No matter if it’s Zappos shipping happiness or Gary Vaynerchuk hustling wine or a bunch of volunteers putting together an open source conference or the Bac’n guys selling premium pig parts. It doesn’t matter. Doing what you love—and working your ass off to do it—will lead to success.
And I don’t know anyone who works harder at doing what they love than the folks in the Portland startup scene.
Thanks, again, SXSW for making me think even more about Portland
So that’s what I got out of SXSW, this year. No doubt the 60+ Portland types who were there each got something completely different out of it.
But that’s the magic of SXSW. And that’s the primary reason I’ll keep going back to SXSW as many times as I can.
So I go all the way down to Texas to think about Portland some more. But that’s just how I am. Did I make some incorrect intuitive leaps? Do you disagree? I’d love to hear your thoughts.
[HTML1]You just launched your new startup. You’re caught up in the excitement and energy of it all and happy to see your baby in the world… Here’s the catch, the deadliest: You can’t change or adapt your site because you hired an agency to build it.
Please know that I’m not picking on Agencies here… I’m picking on the entrepreneurs that hire agencies to build their startups. We have some of the best agencies in the world here, but you should NOT hire them to build your startup. (I mean no offense to any agencies that are reading this, but for startups to work with you they risk the future success of their business.)
Agencies Build Great Websites
Startups are not just websites. With a website for a small business you can get away with building it out and then other than keeping the content fresh and minor tweaks here and there, not mess with it much for a year or so. With a startup, you’re going to change, modify or add something major within the first few days, sometimes even hours of your site’s life. In some cases between the original site map and spec phase and the actual launch of the site, you’ll change something major.
No Ability to Change or Adapt
With any agency built site you’ll be able to update most of the content, maybe even add some sub content pages in your CMS area… But the startup world is extremely fast and chaotic. In order to survive a startup needs to be constantly evaluating their service, the market and the latest industry trends. When you exist in a market where a company can pop up overnight and completely shake things up, you need to be ready to adapt.
It is important to keep in mind that you can’t possibly create an exact plan for the first 18 or even 6 months of your startup. 50% of what you do will simply be wrong. You need the flexibility to constantly be testing out ideas, trying new things and you need the financial freedom to do a lot of the wrong stuff. If you’re paying an agency to be wrong 50% of the time, you’ll run out of money very quickly.
Agencies Are Not Cheap
I’ve worked in the agency world and I know that there are a lot of overhead costs to keep a small company afloat… I also know that you get what you pay for and getting great work from an agency means having to spend some money. But for the same price a startup would pay an agency to build their site, they can hire a solid designer and a talented programmer for an entire year. With your own developer you can test out ideas and be ready to respond quickly to problems and opportunities.
Lack of Speed Kills
Bids, Quotes, Objective Summaries, Wireframes, Etc. Speed kills when driving drunk. but it is what keeps your startup alive. The web world has the attention span of a goldfish and to stay on top of their rapidly shifting focus, you need to stay tuned in to what your users need / want.
None of the Founders Can Actually Develop the Website.
It should be a huge red flag for the founders and their early investors when none of the founders can develop the site. This isn’t to say that a startup without any developer founders can’t succeed, but it will take a bigger financial investment and be a bit slower to get it off the ground.
When you don’t hire an agency, you have to know what you’re doing… you don’t have to know how to program your site… but you should know why you built it in PHP rather than ASP, why a certain framework is best for you or why you should custom build, etc. It is hugely important that somebody on the early team can build the site… or you immediately hire on a developer. If you simply can’t learn enough about what you’re trying to start to manage some technical contractors than find a partner who understands the technical part… If you just can’t learn it, then don’t start your site.
A Real World Scenario
Fantasy Land: You love sushi. You live on the stuff… You can rattle off all kinds of different rolls and fish delicacies… so you want to start a fishing company. You know how it generally works. Get a boat, hire a good crew, find some good fishing spots and viola! you’re rolling in the tuna.
Reality Land: You know nothing about how the fishing business actually works. You aren’t fluent in the terms… “Your sharemen are saying your prime berth is no good, so you’re talking to a banker about any naked mans that can point you in the right direction.” What kind of boat is right for what kind of fishing… long-lining, crabbing, etc.? How do you evaluate the skills of a good captain & crew? What is the appropriate equipment you need to buy to be effective? How do you know when you’re spending too much on something or not spending enough?
A Cure for Agencyitis
So what if you’re one of the entrepreneurs who has already hired an agency… or are a non-technical founder not sure how to go about learning what you need to learn to hire the right developer?
I didn’t want this to just be a harsh critique and not offer solutions, but the answer to the above question is a long answer and this post has already exceeded most people’s internet attention span. So I’m going to write a part 2 of this post with a hopefully helpful and in depth answer. Look for it here, or the coming soon www.InternetAstronauts.com – A Bootstrap Startup Blog
The Darius’ Advocate
The points above are from my experiences, but I’d love to hear your thoughts… even if you completely disagree. An agency perspective could be useful too.
And now on a lighter note… and sticking with the fishing theme:
6 Ways Bering Sea Fisherman are Like Startup Entrepreneurs
They Risk Big
Alaskan king crab fishing reported over 300 fatalities per 100,000 in 2005. While startup entrepreneurs rarely directly risk their lives like the bering sea fisherman, they risk their financial security, personal relationships and often put huge burdens on their loved ones.
They Love What You Do
If you’ve watched the deadliest catch than you would know that Bering Sea fisherman love what they do. They hear a calling to the sea and she beats the hell out of them every season… but they come back every year because they love being fishermen. Many of them have been generations fishermen and they pass down their love of the sea to their kids.
People Think They’re Nuts
It’s hard to watch the show and not think these guys are all missing a couple key connectors in their brain. The weather is as hostile as it gets, the work is back breaking hard and you stink like fish for weeks… oh yeah, and you’ll likely get sea sick enough to know what you look like from the inside out. To the outside person, it just doesn’t make any sense. Why give up the security of a comfortable career and balanced home life in order to work ridiculous hours and risk so much? Because they love it.
They Are Nuts
Let’s face it… you do have to be a little nutty to suffer as much as they do. But crazy ideas are often the most successful. It takes that stretch of the imagination and sanity to come up with something that doesn’t yet exist.
They Smell Bad
Startup entrepreneurs definitely don’t smell as bad as a fisherman, but chaotic working hours often throw a wrench in any plans you have to do basic things like grooming, working out… and sometimes even eating and drinking non-caffienated fluids.
They Need to Be a Bit Lucky
Fishermen have Charts, Maps, Expert Team Members… and if they drop their pots where the crab aren’t it could spell disaster for the season. They also can’t prepare for the random rogue waves that have been known to steal fishermen from the decks of the boat. A startup entrepreneur can have a solid launch plan, the right team and at the end of the day… a little bit of luck could be the difference between your rockets igniting or exploding on the launch pad.
They Make Good Money
The last one doesn’t count… because if you can’t handle the previous 6, then it doesn’t matter how much money you could make it just wouldn’t be worth it. Being a startup entrepreneur like being a Bering Sea fisherman is not about the money. It is about doing what you love and doing something new, exciting and hard as hell.
[Editor: Thanks, once again, to Darius for sharing his ideas and opinions on the startup scene. I always look forward to hearing his insights and first-hand accounts from the trenches. For more from Darius…]