Eating Crow and Loving It - 24 hours after REoMN

On January 21st, I wrote a scathing blog post about my disappointment in not seeing very many tech entrepreneurs in the crowd at a couple of the Jumpstart Community Advisors meetings that I had been involved with.  Because I grew up in Minnesota, I am as good as anyone at living up to the theory that

It's not whether you win-or-lose; it's how you Lay the Blame.

I blamed a bunch of folks from Cleveland, who keep coming to Minnesota in the middle of winter to do an utterly thankless job,  for the problems that I saw effecting the tech startup crowd, here in the land of the single-digit daytime-highs.  I ranted and raved about how we tech entrepreneurs were being overlooked and how unfair that is, to a group of people that I know to be committed to building great companies.  I wanted to know just why-the-hell those of us that are trying to build tech companies, and some of us who already had, weren't being appropriately represented in the building of the Regional Entrepreneurship Action Plan.


It turns out that, like so many other times in my life as an entrepreneur, picking a fight was more a self-motivation tactic than a reasonable or appropriate way to handle my frustration.  BUT, also like so many times in my life, by creating an enemy, (whether real or perceived) I forced myself to make sure I hadn't just written a check with my mouth, that my ass couldn't cash.  I don't know why I seem to always do this; maybe it is immaturity or maybe it is just so I don't have to take a long hard look in the mirror and confront the real problem... ME.  I think we are all a little bit guilty of doing this from time-to-time and, in this case I may have struck a nerve.  Let's face it, none of us wants to admit that maybe there is a reason why our companies don't get funded, though that thought is always lurking in the back of our collective Midwestern, self-loathing, minds.  Of course the issues that we ultimately started to address last night, at REoMN, are more complicated and nuanced than that, but it is always easier, as entrepreneurs, to blame the investors, rather than take personal stock and even (gasp) responsibility for our own situation.  It is really tough to get yourself to the point of self-awareness, at which you can say, "ummm.... I guess maybe the problem doesn't HAVE to be them."  Maybe the reason we feel ignored is that we do a shitty job of presenting ourselves as a unified group.  Even worse; maybe the problem isn't in the presentation, maybe we really aren't interested in becoming a collective.  And maybe it is safer and easier to deal with the humiliation of failure, if we aren't around others when it happens.

When a tree falls in the forest and nobody is around to hear it... Do all the other trees stand there and laugh at it?

So, first let me start by saying, publicly, that I was wrong about the willingness that Mike Mozenter, Beth Fitzgibbons, Mark Smith and Jack Ricchiuto, the awesome team from Jumpstart, showed to engage the community that I knew existed here but that I felt, before yesterday, wasn't always heard.  I really didn't think that someone from another city, a contrasting community and a completely different set of shared experiences, could adopt our plight as their own and help us, with true sincerity; to work through the issues we face, here in Minnesota, so that we can build our own path to chase our dreams and reach heights that we haven't even begun to imagine yet.

Dag

I am sure I offended Mark, Mike, Beth and Jack, when I popped off and, if I am being honest (and when am I not?), I have to admit that pissing them off was as much my intent as revving up the folks here.  I guess I figured that if I challenged them to a fight, so to speak, they would, at least, have to prove me wrong.  Well, not only did they prove me wrong, but they did so in such a completely professional, intelligent and obviously caring manner, that I am utterly embarrassed to have used this cave-man method at all.  What I know now, that I didn't know then, is that these folks aren't doing this for any other reason than they truly want to apply their talents and experience to situations where they can be helpful.  They went completely out of their way to accommodate my little tantrum and never treated me, the group I helped assemble, or the event itself, like the pain in the ass that I am sure it was.  They cheerfully, gracefully and with dogged determination, rose above it and truly listened to what we had to say.  I am not sure that, if someone had busted my chops the way I busted theirs, I would have been as classy as they were.

About the previous Jumpstart meetings, I had written:

...I can't help but wonder what is the point of doing a "regional survey," holding meaningless meetings and getting a whole bunch of bullshit input, from a group of folks who want someone else to do the hard work.  

AND

Why don't we demand that they (JCA), instead, act like real entrepreneurs.  They should have just come in, started working and made something happen.  They aren't acting like entrepreneurs; they are waiting for all the lights to turn green at the exact same time before they pull out of the driveway.

Yeah, I know, "what an asshole."  It was unfair for me to have ascribed nefarious motivations to the Jumpstart team, without first having given them the opportunity to rectify the situation.  This is a hard lesson to have learned at 41 years old; and in public no less.  I felt immeasurably worse last night, when they got to Joule and immediately started moving heavy furniture, attacking the job-at-hand and basically kicking ass the way I would expect any "Real Entrepreneur" to do it.  It was at that moment that they became, in my eyes, not hired guns, but people with whom I felt I had something in common.  Seeing people work hard always makes me feel better about them - maybe that's just my Midwest sensibility or maybe its just having spent so many years grinding away as an entrepreneur, but I have a ton of respect for folks who just roll up their sleeves and get to work, instead of waiting for others to do it for them.  Either way, they showed their true stripes throughout the night and I think we were all impressed.

So, now let me tell you a little bit about my experience over the past couple of weeks, leading up to the event.  within 24 hours of me ripping them, I was contacted, individually, by several members of the JCA team to immediately start planning a new, separate and decidedly different event.  Wisely, they let me take the lead on inviting people, using my network and organizing the gathering.  This was brilliant on so many levels that I can't begin to address them all, but most importantly, because they know that if we begin to take ownership of our own problems then we will be miles further down the road toward devising our own solutions.

After telling them that I was going to hold my own event, and them being surprisingly accommodating to that notion, a different member of the Jumpstart team sent me a personal message At least every couple of days,, to inquire about details, without ever making suggestions about what I should do.  they let me own it.  the brilliance of this is something that I actually do know quite a bit about, and began to recognize during this process.  The best managers are those who allow others to use their talents in the way that they are most comfortable.  In this case, by allowing me to take the lead, they were allowing for one of two possible outcomes, whether they realized it or not.

1. If I started shouting from the rooftops about how we in the tech startup community were all getting screwed and nobody showed up to rally against this egregious slight, then they would be able to point out that I was just some crackpot with a big mouth (something that I could still probably be accused of) to whom no attention need be paid.  Put another way, they gave me enough rope to hang myself.  OR...
2.  We could actually come out, in force, like we did last night, and take our place among the other entrepreneurial institutions of our state, alongside the med-tech, bio-tech, agriculture and bio-science folks, who seem more adept at grabbing headlines and scarce investment dollars.

In the end, there was really no possibility for a disaster to occur because either way the outcome would prove a point.

So now it is time for me to offer up some of the real, measurable and completely exciting outcomes from the first gathering of the "Real Entrepreneurs of Minnesota"  As I communicated to the Jumpstart team earlier today:

• I am pretty sure that a company got funded last night at the event
• My company hired a designer today whom I met last night
• 3 people have contacted me to tell me that they found new co-founders for their companies
• 2 others in attendance were hired on-the-spot

These occurrences alone, tell me that we need to do more stuff like this!

So, before I finish up, I need to share a an email that I got very early this morning.  In the interest of privacy, I am not going to tell you who sent it, but I will say that it was sent to the Jumpstart folks and I was merely copied on it.

Driving home last night it occurred to me why I was smiling.  I recalled saying “that’s a great idea” at least 8 times.  To an idea geek and serial entrepreneur that is as good as it gets. And I wasn’t alone, I could see the little light bulbs going off over everyone’s head all night long.

It also reinforces to us that this is the secret to a good E and startup environment. Shared ideas, shared passion, shared success. The opportunity for networking, connecting and mentoring are the precious capital.  Do that and capitalism efficiently takes care of the rest, anywhere.
Darren, thanks for the leadership.

Team Jumpstart, thanks for humoring Darren.

Let’s go start something,

I can't take any credit for the success of the event last night.  I was simply the guy with the big mouth that got folks pissed off enough to show up.  That doesn't make me a leader, that makes me a gadfly.  In fact, the success of last night's event can't be measured at all; not right now. we will only be able to truly recognize and quantify whether we moved the needle at all by continuing the discussions that were begun in our small groups.

I have a heartfelt belief that we started something important last night; that we will all be increasingly proud of our roles in starting something amazing for the future of Minnesota entrepreneurship, as time passes and we build a new archetype for ourselves and those who follow us into the galaxy of possibilities that await.  Although, I have to admit, I am a little scared that when the buzz from the evening wears off, we will revert to our individual goals and our independent voices. But I will commit right here, in a public forum, that I will do whatever it takes to serve my community; my friends; my incredibly innovative, Tech Startup Tribe.

At least I will do it, if you will do it with me.

All Time Best Songs for Start-Ups

This is a list of the best song titles ever, describing what starting a tech company is like. You can read the list from top to bottom or bottom to top. I don't think it matters.



Add yours to the list!

1. You May Be Right (I may be crazy) - Billy Joel

2. American Idiot - Green Day

3. Can You Help Me - Ape Hangers

4. Crazy Life - Toad the Wet Sprocket

5. Crazy Train - Ozzie Osbourne

6. Dancing With Myself - Billy Idol

7. Fly Me to the Moon - Frank Sinatra

8. I Can Dream About You - Dan Hartman

9. I Know There's Something Going On - Frida

10. If I Had a Million Dollars - BareNakedLadies

Where the Hell are the Entrepreneurs?

I have been to two different "JumpStart Community Gatherings" and have come away from both with the same overriding question:

Where the Hell are all the Entrepreneurs?

There is something seriously wrong with a process that is supposed to be gathering information about how to fix the broken entrepreneurial and investment climate in Minnesota, but in a room with 50+ people, there were 9 entrepreneurs.

I sat at a table that was supposed to be dedicated to software and business services and there was a professor, a low-level Chamber of Commerce employee and two State of Minnesota workers.  There were two of us that are actual software company entrepreneurs, a developer from South Dakota, and a woman who owned a small business that sells financial management services to other small businesses (not exactly someone capable of going out and raising equity investment.)

I looked around the room and I would estimate that there were no more than 3-4 people who were younger than me... I am 41 years old.  I had met every single entrepreneur in the room at some time over the last 5-6 months and maybe half of us have ever done an investor pitch.

I recognized five people who had gone to Minnedemo; two of them were sitting at my table, two others have never started anything but their car and then there was Ernest Grumbles, who is an outspoken IP litigator and community agitator, who all of us entrepreneurs know well and greatly appreciate, for his work with MOJO Minnesota.  Now, Ernest deserves for his opinion to be heard, because at least it comes from interacting with entrepreneurs.

What I didn't see were:

• 23-30 year old men and women who are constantly struggling to get their start-ups noticed by investors in the local community.

• Anyone who has attended a Bootstrappers Breakfast or a KickStart meeting since October.

• A single Angel Investor or VC (I take that back; Harlan Jacobs was there representing the entire local investment community)  There may have been some others there, but I go to as many networking events as anyone and I didn't see any other investors that I recognized.

There were a couple of people who are on the outer fringes of the Project Skyway lexicon, but nobody, besides me, from the core group. (although I know that Cem Erdem, at least, was at the session the night before)

I am disappointed that there weren't at least 30 desperate, cash-starved entrepreneurs, who live the actual day-to-day life, that all of these other folks are supposedly trying to help make better.

I was also disappointed that there weren't a whole table full of well-known local investors, (you know who you are) who could have come to the event and listened to the issues first hand.  Instead they'll end up reading some sanitized report, boiled down to a couple of bullet points, put together with input of the, mostly wrong, crowd.

Finally, where the hell are the politicians and lawmakers who are always up the ass of the local research university, talking about what a horrible job it is doing transferring technology to industry?  Did they not think it would be a good use of their time to come and find out, in person, what their constituents think are the real issues.  Do they really think they are going to get all the information they need to make Minnesota a better environment for entrepreneurs and a more free flowing system for investors, from a bunch of folks who fly in once every couple of months from Cleveland?

I am impressed and astonished by the great work that the JumpStart folks have been able to accomplish in a relatively short period of time in Northern Ohio.  But I can't help but wonder what is the point of doing a "regional survey," holding meaningless meetings and getting a whole bunch of bullshit input, from a group of folks who want someone else to do the hard work.  Why are we so resigned to let someone else carry the water for us.  Why don't we demand that they, instead, act like real entrepreneurs.  They should have just come in, started working and made something happen.  They aren't acting like entrepreneurs; they are waiting for all the lights to turn green at the exact same time before they pull out of the driveway.

So, I call on the entrepreneurial community to demand our input be heard, separate from all the well-wishers and wannabe's.  I am going to ask Jeff Pesek, Ben Edwards, Luke Francl, Casey Allen, Mike Bollinger, Kevin Spreng, John Roberts and Harold Slawik  to help me put together a truly representative group of "Real Entrepreneurs" to meet with the folks from Jumpstart, so they can get constructive, accurate and representative input from the woefully under-represented (and apparently under-appreciated) start-up community, who never got invited to participate in a community forum that is supposed to be designed to gather opinions that will help us.

117 Tech Start-Up Questions from a Dumbass Entrepreneur

Hi, I'm Darren and I'm a dumbass.  I work in a world where there are almost no questions that can't be answered without first saying, "Well...It depends!" But doing what I do, starting tech companies, is one of the only things I am really good at.  So, with that said...

I have been an entrepreneur/start-up junkie/ Dot-Communist for half of my adult life.  Many things have changed in the world of tech start-ups since I worked in SV more than a decade ago.  Everyone is so much more sophisticated and there is a much higher level of nuance than when I first started out.  There is also a much larger community of folks who have been-there-and-done-that.

With all that said, I started taking stock of just what I know for sure (or at least think I know, anecdotally) and what I still wish I had a better understanding of.  Then I started to write.  I came up with page- and-pages of questions that I wish I could have asked back in the beginning of my career and a whole bunch that I wish I could get answers to, today.

I am even thinking about getting a group together, which will include a pool of successful entrepreneurs, lawyers (both IP and start-up), early stage accountants and/or start-up CFO’s, Angels and VC’s.  I want to ask them all the questions that I think most newbie tech entrepreneurs would want to know the answers to. 

I figure if I could ever get a few of each, from the aforementioned group, to answer all of these, then add answers from the founders of some prominent tech accelerators like Y-Combinator, Tech Stars and/or Founder’s Institute, I could easily write some kind of “Tech Start-Ups for Dummies” book.

Obviously, there are too many questions to ask in one session, but here are all the questions that I thought to ask.  I could have kept going, but honestly, what good would that do.  I am sure I am missing a bunch of really important topics, especially around valuation, preferred vs. common stock, liquidation preferences, sub-debt, funding sources…

Enjoy, and feel free to send me additions!

Questions For Investors
1.    Have you ever founded a tech start-up and, if so, what was your role and how did it turn out?

2.    What can we, the Twin Cities start-up/entrepreneurial community, do to get more Angel/Seed investors interested in investing in pre-revenue tech start-ups?

3.    Do you ever invest in companies, when you have serious doubts about their ability to raise more money if they should need it or if they come right out and say that the don’t ever want to raise more money?

4.    What does it say about an entrepreneur, when they say they want to raise $1 million on a pre-money valuation of $1.5 million and does it ever seem weird that everyone throws around such large round-numbers, so casually?

5.    Do you ever invest completely independently or do you ever fully fund a round, without other investors; Why/why not?

6.    Have you ever funded an “idea?”

7.    Have you been so impressed with a team or an individual, that you funded what you considered a terrible idea? (how did it turn out?)

8.    If you could describe your favorite quality in an entrepreneur that leads a company that you have funded, and is (or has) provided exceptional ROI, what would it be?

9.    How do you figure out whether an entrepreneur knows the difference between an opportunity and a problem.

10.    When you meet an entrepreneur for the first time, someone who may have been successful in something they have done or started in the past, do you care or even think about whether they were good at what they did or just lucky?  How do you tell the difference?

11.    Is it important for entrepreneurs to know the difference between prepared and over-prepared or do you find that the majority of entrepreneurs are underprepared so it is actually refreshing to meet someone who is over-prepared?

12.    What are the signs of an entrepreneur who is over-prepared what message does that send to you, as an investor?

13.    What are the two-or-three due diligence things that you do, every-single-time, before you invest in a company?

14.    What are ways or examples, that you have consistently seen start-ups waste time on things that don't matter.

15.    If a founder, founders, need to be paid some kind of salary, does that affect whether you will invest?

16.    What is an acceptable salary for a CEO, CFO, or CTO if their company isn’t profitable yet?

17.    Are founders allowed to get raises in salary or do bumps like that always come in the form of stock?

18.    Since we all start somewhere, and none of us has any experience until we just jump in and start doing something, what are a couple of important lessons you have learned since you made your first investment?

19.    From both a business and personal standpoint, what is the best thing about investing in Start-ups?  The worst? 

Questions for Entrepreneurs


20.    Aside from your own company, or companies where you have been an employee, have you ever invested in a tech start-up?  If so, what was your role (board seat, etc.) and how did it turn out?


21.    Now that you have been through it, what is the most important element to choosing the perfect investor.  In other words, if you could choose one thing that an investor would bring to the party, what would it be?

22.    When you know you have a hard deadline or some really important event coming up that could make or break the success of your startup, should you tell potential investors?  If so, how do you communicate it so you don’t look desperate or pushy?

23.    Why is it important to be patient and when is it ok to push an investor to take action?

24.    When you meet an investor for the first time, do you care or even think about whether they have been successful in their past investment activities?  How do you tell the difference between a successful investor and just someone who has a lot of money?

25.    What are the dangers of hiring too quickly?

26.    What are the dangers of firing too slowly?

27.    What are the areas where you “Under-budgeted” for critical elements/expenses in your business plan?

28.    What hurt your start up more, making decisions too fast or too slow?

29.    What helps/hurts a startup more: Looking for answers from other people or Looking for approval from other people

30.    Before beginning to build your product, is it possible to get too much input or listen to too many points of view and, if so, which group is it more important to seek advice from; potential customers or potential investors?

31.    Following up on the previous question, is it more important to seek advice from those who already serve your industry or those who have built a company with a similar business model?

32.    If, as a founder, you have responsibilities and financial commitments that make it absolutely impossible to work for free; should you go into deep debt, threaten the financial security of your family, or be expected to, to “Prove” your commitment to your company?

33.    From both a business and personal standpoint, what is the best thing about founding a Start-up?  The worst?

34.    Have you ever fired an investor or had to figure out a way to remove them from the mix?  Why/how? 

Questions for all

35.    Besides getting customers and revenue, what is the one thing you would tell someone to do to really get your attention?

36.    What is the dumbest mistake you have ever seen an entrepreneur, who eventually got funded, make?

37.    What is something that you hear from entrepreneurs/investors that makes you say to yourself “Well, I can cross them off the list of people I would ever consider investing in/taking money from?”

38.    What is the difference between important and urgent and how do you decide which is which?

39.    Is it more important for an entrepreneur to be seen as smart-as-hell or obsessively driven?

40.    Thinking back on start-ups you have funded, how do you gauge whether the team understands the difference between focus and activity and, as an investor, how do you help steer them toward more productive activities.

41.    Is it more important, for someone who is looking for funding, to be better at generating publicity or confronting reality and can one overcome the other?

42.    What are the areas where you consistently see entrepreneurs “Under-budget” for critical elements/expenses in their business plans?

43.    What are the tell-tale signs of an entrepreneur who has let getting funded go to their head?

44.    What are the most common things, as an entrepreneur that you found yourself Overspending on and how did you figure out that you were doing so?

45.    What is worse; Under-communicating or over-communicating?

46.    What are the kinds of critical events that happen during a start-up’s early stages that breed overconfidence?

47.    What is worse for the long-term success of a company: Not shipping fast enough or shipping a crappy product?

48.    If a start-up hasn’t filed legal documents, which designate them as a C-Corp or an LLC, does that send a message to investors and, if so, what is that message?

49.    How do you decide what the percentages are that each founder gets?

50.    For multi-member founder teams, who or what kind of founder usually gets screwed or at the very least, under-valued for their contribution.  Who’s contribution is overvalued?

51.    If you had to choose just one, is it more important to have a great accountant or a great lawyer?

52.    When is it time to bring in an experienced CEO

53.    What are the characteristics of a good start-up CEO and how do they differ from the characteristics of a good CEO of a company that has 25 employees and/or 5 million in revenue?

54.    When should you no longer be considered a Start-up?

55.    In general, would you say it is more important for a start-up, in its infancy,  to have a long-term strategy for self sustainability, so that they can minimize the amount of outside investment they need to take, or a well-defined path to becoming a good acquisition target?

56.    Do you think IPO is a reasonable goal for a start-up to even consider from the beginning?

57.    What is the difference between a start-up friendly lawyer and an investor friendly lawyer and how does an entrepreneur know the difference?

58.    (This question for all except entrepreneurs) Are there lawyers, accountants, developers, other common types of vendors that you will not, or maybe prefer not to, work with, all thing being equal?  Does this ever become part of the equation when you are considering investing in or working with a start-up?

59.    Should a start-up have an advisory board? why?

60.    How many people is about the right size for an advisory board and when is it just too big?

61.    How should an advisory board differ from a board of directors/governors?

62.    What is the most appropriate level of compensation for a Board of Directors/Governors? Does this include cash as well as stock?

63.    Is it appropriate to have a completely independent voice on the Board of Directors?

64.    What is “smart money” and is it so important to have smart money, that you should turn down “dumb money” no matter what?

65.    What is the worst way for a start-up to spend money?

66.    What is the most cost effective way for a start-up to spend money?

67.    Do investors ever get pissed or think you are losing focus if you spend time mentoring someone else or participating in activities that don’t bring tangible value to your company?

68.    Other than stealing or some other criminal activity that directly affects the company, what is the one thing, above anything else that should trigger immediate removal from the team/company/ board, etc…? 

69.    In what percentage of start-ups are one or all of the founders removed from their initial role’s by the board?  Do they usually stay with the company, long-term, or is that a signal that they should probably leave?  Is that usually the message that the board is trying to send?

70.    Out of every ten start-ups that get funded, how many start-up CEO’s are equipped to handle that job, long-term, through multiple rounds of financing or through a successful exit?

71.    How often do founder teams split up, and why?

72.    How do you go about firing a founder?  When should that happen? What are the signs or triggers for this to occur?

73.    What are the worst case-scenarios you have seen for a company that had to get rid of a founder? (not naming names, just situations)

74.    From a company culture and morale perspective, what is the best way to deal with a founder leaving the company?

Networking - I am often intimidated by networking events filled with people who could probably help me or teach me something, but might also be WAY ahead of me in the experience life-cycle.

75.    What is the importance of networking for an entrepreneur? 

76.    Do investors ever consider how networked an entrepreneur is when they are thinking about investing?

77.    What are some of the most important groups that an entrepreneur can get involved with, that signal that they understand the importance of networking?

78.    For each group, what is the one networking event that you would never consider missing? Why?

79.    For each group, what is the one networking activity that you think some entrepreneurs waste their time participating in or that they participate in, to the detriment of their goals.

80.    What are some great networking behaviors that impress you? For entrepreneurs, talk about investors; for investors, talk about entrepreneurs; for legal, talk about all; for accountants talk about all.

81.    Is it more important to network with others in your same industry and/or your relative level of influence or social stature, or should you risk looking like an idiot or worse, feeling like an outsider in a room full of people who already know each other?

82.    Is networking more or less important after you have been funded?

83.    What are the characteristics of a good mentor?

84.    Should mentoring be a formal relationship.  In other words, should I say to someone, “would you be my mentor?” or “would you mentor me in this X area?”

85.    Is mentoring a business relationship?

86.    What should an entrepreneur be trying to get from a mentor?

87.    What should an entrepreneur never ask of or try to get from a mentor?

88.    What’s in it for the mentor?

89.    How many mentors is too many?

90.    How much time is too much when it comes to networking?

91.    Is it a mistake to become so focused on your business that you don’t have time to network or mentor, even if your business is wildly successful?

Would you rather have:


92.    An awesome, charismatic, leader who can communicate the vision OR an awesome, super-organized and empathetic (people) manager, running a start-up?

93.    A principal founder/start-up CEO with Undying Passion for the idea OR Real World Experience

94.    Founder/CEO who is Confident OR Pragmatic

95.    Founder/CEO : Street smart OR book smart

96.    Founder with a technical background OR Founder with sales background in target industry

97.    Founder with a technical background OR founder with operations, finance and HR background

98.    Founder with sales background in target industry OR operations, finance and HR background

99.    Founder/CEO: MBA with 2 years at McKinsey OR BA in English and 8 years in sales to target market

100.    Investor with personal net worth of $200 million but no experience in your industry OR Investor with net worth of $5 million, but can introduce you to lots of customers.

101.    Investor who is super-supportive of your company and helps any way they can, but likely can’t/won’t invest in follow-on rounds OR a micromanaging investor who doesn’t really offer much besides money, BUT can help you raise a ton of money, as you grow.

Accounting

102.    What can a good accountant do for you and is it important that they have experience working with start-ups?  Why?

103.    In general, for entrepreneurs looking to raise money, should they file as a C-Corp, an LLC or should they wait to see what their investors want them to do?

104.    What is the best thing about working with entrepreneurs?

105.    What is the most difficult thing about working with entrepreneurs?

106.    Why do you think it is so hard for entrepreneurs to understand the concept of pre-money and post money.

107.    If an entrepreneur has a good accountant and a good attorney, is it still important for them to understand the minutiae of pre-money and post money valuations.  Why?

108.    How do you value a company that hasn’t produced revenue?  Are there any indicators or benchmarks that one should look for?
109.    For a pre-revenue tech start-up with no patents or tangible IP, what is the top end of the valuation-scale and what makes some companies, in similar situations, more valuable than others?

Legal

110.    What is the difference between legal representation that is used to working with startups and those who aren’t?

111.    Does a good start-up lawyer need to have a lot of knowledge and experience in issues surrounding IP?

112.    Is reputation a factor that entrepreneurs should consider when they hire a lawyer?

113.    What is the best thing about working with entrepreneurs

114.    What is the most difficult thing about working with entrepreneurs

115.    What are the most important things to get right from a legal standpoint, when forming a company?

116.    What should an entrepreneur do if they don’t have the money or good fortune to have access to a good attorney?

Other

117.    Finally, For an entrepreneur who needs:

1. A co-founder or two - Who bring skills, experience and a solid background/reputation of providing specific key elements to other successful businesses
2. Investors - who inevitably will want them to keep the company as lean as possible in the early stages, to reduce the burn rate
   
3. Market validation – to show both investors and potential co-founders that the opportunity is worth the risk
   

Would you be better off spending your time networking with potential partners, potential investors or potential customers?

Open Letter to AUTM: The REAL National Convention Debate Topic Should Be: "Why Haven’t We Embraced the Web for Marketing and (Express) Licensing of our Available Technologies?"

Alan Bentley, the president of AUTM recently announced that there would be a big "debate" about the pros and cons of "express Licensing." 

First let me say that in my opinion having a “debate” on pros and cons of express licensing doesn’t go far enough.  The discussion should also include marketing technologies outside of our personal networks and why we haven’t fully embraced the technologies available to us for doing so.  Also, a definition of what folks think “express licensing” means, would probably narrow the scope to a manageable level.   Plus, asking the folks from tech transfer offices to weigh in on this doesn't make sense.  So few of them have a clue about how to effectively and efficiently tackle express licensing that you couldn't fill a closet much less a ballroom with those who could speak intelligently on the subject.

As a primer or maybe a “fight-starter,”  I would suggest that we are really debating the difference between inefficient methods and efficient marketing and licensing practices.  

I find myself writing this, having spent the last two-and-a-half years having thought, ate, breathed and slept "express licensing" and, in broader terms, Marketing University I.P. on the Web. 

My company, M.IP.P. Strategy has developed the First and most successful tool for SEO, Online Marketing, Express Licensing creation Administration and Management Application that is out there today; CaSTT - (Commerce and Search for Technology Transfer).  
And it was designed  in conjunction with a University Technology Transfer Office.

SO, with that having been said...

The problem is, express licensing isn't really the issue.  The real issue is the effective use of tools to market available technologies.  The reason that express licensing doesn't work and hasn't really caught on for most universities has little to do with the licensing part of the equation.  Instead the issues reside in the reality that folks can't find the technologies that we have available for licensing.

The Bayh-Dole Act recognized the incredible potential of university inventions, yet a staggering number of promising technologies remain untapped; The economic and humanitarian benefits unrealized, because of the gap in getting inventions noticed and into the hands of companies with the development funding necessary to nurture these vital innovations and discoveries.  Connecting companies with viable licensing opportunities remains the most significant challenge along the research-to-deployment continuum.

The typical marketing and licensing model, for US Technology Transfer offices, relies heavily on inefficient marketing techniques and constantly cultivating professional relationships with industry contacts. I am by no means asserting that we should not cultivate strong industry relationships, but employing this methodology means that when a researcher produces a new invention or makes a breakthrough discovery, the ability to successfully commercialize that intellectual property is often directly tied to the resources available to the technology transfer office and the personal contacts of the technology transfer professional assigned to marketing that technology.  Common sense dictates that if you are an overworked portfolio manager in a tech transfer office, juggling dozens, if not hundreds, of intellectual property disclosures, you are more likely to dedicate your time to ideas that will have huge, obvious, monetary pay-offs, rather than trying to shepherd inventions with less obvious commercial potential through the morass of red-tape and paperwork that accompanies most transformative ideas, coming out of pure research or academe. 

The tech transfer industry, as a whole, hasn’t kept up with the staggering advances in electronic marketing techniques and search engine optimization strategies, over the last decade.  Because of thsi fundamental truth, the only viable option for transferring the latest technology to someone who can turn it into jobs, growth and money for your university, lab or hospital, is sending more emails and making more phone calls, all-the-while eagerly waiting for serendipity to smile upon your efforts and leaving you hoping that the new technology is at the perfect intersection of innovation, need, ability, resources and the right person actually knowing the other right person, so they can engineer a meeting. In short; in the tech transfer world, it has always been about how much money you have and whom you know, rather than how good your idea is; but money is tight and “hope” is neither a sound strategy nor a successful tactic.

Because of this omnipresent paradigm, Technology Transfer Offices have fallen far behind the rest of the business world when it comes to utilizing the most helpful and transformative communication tools at their disposal; Web Marketing.  One of the effects that this deficiency in professional and organizational development has, is that technology transfer professionals, and specifically those who are tasked with marketing intellectual property, occasionally operate on differently communication levels than those with whom they are supposed to interact. 

The typical TTO - marketing person spends her time making phone calls, sending emails, and trying to figure out how to get the contact information for completely unqualified leads at monolithic companies.  Meanwhile, most of the jobs created in the United States, and most of the folks making revolutionary economic and societal changes, based on untapped ideas and elbow grease, are never going to hear about the wealth of amazing technological treasures available to them, because they aren’t part of a giant machine that churns out a new product once every ten years. 

Entrepreneurs; those far more likely to turn innovative research developments into practical business products, don’t spend their days waiting for someone in a tech transfer office to call them. Additionally, it is arrogant and naïve to think that corporate researchers and product development engineers have time to visit every university website; trolling the ivy covered depths of neglected discoveries.  The folks that will lead the nation and, specifically, the area’s most affected by the current economic distress, won’t do so by trudging through acronym-laden technology descriptions, jargon filled abstracts and indecipherable static files, meant more for their peers than for someone who might turn their work into a commercial venture. 

The reason the future of technology transfer for public institutions is so cloudy is that most new technologies, even the most exciting, promising and commercially viable ones, can only be found by an extremely persistent individual, who knows precisely which technology he or she is looking for; has somehow discovered the website where the information is stored; understands how to navigate through academic databases, journal publications and patent searches, to ultimately find enough information to lead them to someone in the Technology Transfer Office.  Even if one successfully runs that gauntlet, what follows is a significant investment in person-hours required, by both the potential licensee and the Intellectual Property owner, to facilitate the sharing of information, process paperwork and complete several manual steps in the data gathering and licensing process. 

Many Technology Transfer Offices, particularly those located in economically distressed regions, think they cannot afford the resource expenditure necessary to fix this problem or, even if they can, don’t know where to start, so they continue to use outdated and inefficient means to reach potential licensees.  These Technology Transfer Offices have been taught to believe this business model will lead to licensing, commercialization, and job creation.  The unfortunate reality is that inadequate marketing strategies, antiquated systems and inappropriately used software applications simply do not provide most tech transfer offices with a reliable mechanism to reach beyond their own personal networks, or outside their own geographic reach, to garner unsolicited leads.  The absence of adequate education and training targeted to the unique issues and circumstances that technology transfer offices face, and a lack of specialized technology development for this small niche industry, make it incredibly difficult to create an environment for potential licensees to even find viable licensing opportunities.

Efficient Licensing

The problem that I have with most folks that think they are doing express licensing is that they STILL NEGOTIATE!  It is as if we think it is our job to negotiate. 

Imagine if your TV broke.  You would have a problem that needed a solution.  Because we have trained licensee’s to think a certain way about buying (licensing) stuff from us, If you were buying the TV from a Target store, as if it were University IP, it might go something like this.

You/licensee: walk into Target and say to the manager “I would like to buy that TV.”

Store/Technology Manager; “Great; That TV is $539.  How would you like to pay for that?”

You/licensee: “Whoa, hold up big fella! We are going to have to negotiate.  I said I like the TV, and it does all of the things I need a TV to do, but I am not thrilled by the packaging; Especially the tape on the box.  No, before I buy that TV, I am going to need you to make some changes.  The thing is, I don’t really like the way it is packaged.  I need you to send it back to China, and repackage it.  Also, I need you to remove the tape with the red Target® logo on it and just use clear tape.

Store/Technology Manager; “Ummm. What?!”

You/licensee: “Yeah, if you do all that stuff, I will buy that TV for the exact same price that you have it listed at right now.”

Now, at Target, if the Store/Technology Manager calls security and has you (justifiably) thrown out, you can just got to another store.  But it is highly unlikely that you will turn around, go back to your house and decide that it might be easier to get exactly what you want by just building your own TV.  Even if you could, it would take too long and cost too much.  But this is the crazy, contra-intuitive, sandbox that we in tech transfer find ourselves playing in every day.

If we just said: “Nope, we have a set of standards that we cannot stray from so, if you want it, here it is!” Folks would have no option but to accept it – or not.  Either way we can justify our actions.

Does This Sound Familiar

Currently, when an individual or organization wishes to enter into a non-exclusive license agreement for the use of commercialized intellectual property with a University, a manual process must be undertaken whereby both the potential licensee and employees of the Technology Transfer office can expect to engage in an inefficient, and occasionally arduous, licensing process.

First, the customer must identify the product he wishes to license and either, contact the inventor for information on how to license the IP, or figure out for himself how to engage the TTO.

Then he must either call or email the appropriate TTO employee and wait for a response, after which they receive further instructions regarding the exact license parameters and the processes and procedures they must undertake in order to complete what should be a relatively simple transaction.

Licensing Non-Exclusives (Because Gerry mentioned it)
In the best-case scenario, using some forward-thinking TTO’s web site, a customer might be able to:

• Obtain a couple of paragraphs of background information, a simple set of license instructions and a downloadable copy of the license, from the website, which is usually in PDF form.
• The customer must then mail, fax or email several hand-signed copies of the license back to the TTO. 
• They must, also remit payment for the license, either by mailing a check or via wire transfer (which has its own set of instructions and manual internal processes.)

In either case, several, steps must be taken to reconcile this transaction in the accounting process.  In cases that I am familiar with, the check comes in then sits on a desk or in a basket for a while.  When it is opened, someone stamps a date on it and begins to enter the transaction and customer data into some central accounting system software (if they are lucky). Sometimes, however, the info gets added to  the TTO’s tech management database but there is a separate process by which the university and the TTO have to account for the money. In those cases, another step is added to the process which means that the check has to clear the bank, then a TTO staffer has to find and enter the details of THAT process into a different system before materials can licenses are approved and sent to the licensee.

Finally, upon receipt of the Executed License, the “cutting edge” University forwards an electronic copy of the reproducible materials and content to the licensee.  If the licensed materials are something that must be boxed up and shipped, there is yet another set of procedures for fulfillment and shipping communication.  and, of course, all notifications and shipping/tracking documents must then be manually entered then be tracked in your CRM or technology management system.

And what about export controls?

Our express licensing system has multiple levels of export control mechanisms.  We can restrict information, access and ability-to-license for all technologies or even individual license types for a specific technology, based on IP address, country, state, physical address of the licensee and a bunch of other variables.  So, for instance, someone in Afghanistan, could license the academic version of some piece of software, to use for research purposes, but not be allowed to even get technical information about the commercial or more developed versions of the same technology.

However, in most cases, using the “Old school ways of doing things, getting your hands on the technology once you have jumped through these hoops will take at best, a few weeks, and most often several months.

Let's Negotiate

Sadly, this is currently a “Best-Case” scenario for most TTO’s.  Most often though, the customer, since she has already gone through the trouble of actually endeavoring to speak directly to someone at the Tech Transfer Office, says:

“Can we change the language in section XXX  …I just don’t know if we can do it that way here at our company/ university/ hospital/ lab…,” etc?

To which the Technology Manager inevitably says “of course; just let me send that to our lawyers and make sure it is OK with them.”

This action triggers the customer to suddenly believe that if there are lawyers involved, maybe theirs should be too.  2 months later the technology, which could have been licensed immediately had there been a mechanism in place for doing so, is still stuck in legal terms-and-conditions purgatory and might never make it out.

This is, simply, a poor way to treat a customer who wants nothing more than to find a useful technology, learn more about it, pay for and execute a license and fulfill the order.  The worst part about it, for the TTO, isn’t even the delay; the worst part is that you have trained another customer to automatically assume that the terms and conditions, that are included in the licenses that you promote, are arbitrary and that one would be a sucker if they simply accepted them.  This is the same feeling one would get if one were to go to a used car lot and tried to buy a car.  We all know how much folks love to negotiate…

The Promise of the Future for Tech Transfer

How to Get There

It is possible to leverage the power of the Web to bring potential licensees, folks that you don’t have contact info for, to the universe of amazing technologies that often lie dormant waiting for someone to discover them.  By using ubiquitous web tools, and following proven content-optimization methods, industry can find out about licensable technologies and, in many cases, actually license it, with no human intervention, no phone calls, no negotiation and no paperwork.

Whatever applications and tools the TTO chooses, though, should really be a secondary consideration.  The application itself is simply a means to an end.  In my mind, which application one uses is only as important as a tech transfer office's ability to change the way they market their technologies.  It is so important for people to understand that they should not be using jargon, technical descriptions and the indecipherable gobbledygook that professors and researcher write. (mostly, it seems, to impress other professors and researchers)  one can find reams of quantitative data that PROVES that people simply do not use the web to search for solutions to problems the way most of us in the tech transfer world seem to think they do. 
 

If folks aren't beating down your door to find out more about all of the cool, ground- breaking inventions and discoveries that you have to offer, you no longer have to ask yourself why; It is because you are writing for the wrong audience.  I have had this argument a hundred times with folks in our own office and all I can say is that the results speak much louder than anything I can say or do to convince them.  

I can give you a hundred examples of how easy it is to get people to actually notice your licensable technologies, but most often, it doesn't matter, because folks don't want to do the work it would take to fix their content.  They just want to post whatever they have in KSS, InfoEd or Inteum, directly to the web, with no regard for whether or not anyone in the world will ever be able to find it, use it or understand it, if they do.  We in the Tech Transfer world seem to think that the simple act of getting a technology description online means that anyone searching for a solution to a problem, one that has anything at all to do with the general nature of one of our inventions, will easily be able to find it.

The fact is, there are tens-of-thousands of technologies being listed on IP aggregator sites, but the real people out there searching for them can't find them because we do such a horrible job of writing technology descriptions, optimizing our content and setting ourselves up for success.  We don't understand the tools that we are using or how search engines work.  Optimizing content can help us do our jobs by bringing unsolicited leads to our doorstep.

Tech Transfer Offices need to completely scrap the way they think about how they describe their technologies.  We need to begin to learn how to use the tools that we already have available to us.  And, finally, we need stop trying to turn technology management systems, like KSS, Inteum and InfoED, that are in no way meant (or equipped) to help one market the technologies whose descriptions are housed there, let alone do so online.  We need to start thinking more clearly about our the behavior of our audience.

Why are Tech Transfer Organizations Using video / Web 2.0 / social media tools

It Gets Worse

The trend that sees tech transfer offices skipping the most important steps in the online-marketing-tool "learning curve," and instead jumping directly to a strategy of using video/Web 2.0/social media tools, without ever learning how the web, search, content optimization and basic internet marketing processes work, means that they are focusing time and resources on steps that won’t help them until they go back and learn the basics.

If you can’t effectively market a technology online, so that you get unsolicited leads, why would you shift your focus to trying to market a video about that technology.  If you are doing this you are throwing good money after bad.

Innovation Lives; Just Not Inside the Tech Transfer Office

Are We Scared or Apathetic?

Most folks from private enterprise would be shocked by the vast array of bureaucracy and manual processes that nearly all tech transfer organizations engage in, which choke the use of new, better and more appropriate ways of marketing innovations.

what a mess

OK, I am completely aware that I am the exact wrong person to criticize anyone about home-office cleaning, clutter or organization, but...a complete day spent cleaning and organizing, in only one room, is not really ok. It is obsessive-compulsive.  

I have three offices (let's not talk about my neurosis and other obvious issues or we'll be here all day) and even if I had dog urine covering every square inch I'm pretty sure I couldn't spend more than three hours cleaning them. My sister does the same thing; she spends 12 hours cleaning, which is akin to a vacation for her, then spends another 12 hours congratulating herself for having done something "productive." NOT EVEN CLOSE

Feeling good about getting stuff organized is one thing, but not feeling a little ashamed (instead of triumphant) that it got that way in the first place is kinda weird. Don't you think that it is more a display of tendency toward giving yourself messes to clean up because the accomplishment of cleaning them is a tangible manifestation of the work you got done at home that day.  

I used to work for a huge company and I was the very first "remote" worker. In fact, I wrote the business case for a new product bundle called "work-at-home solutions." Since then I have learned some things about people who spend most of their time working at home. One of the most common things that we do while we are supposed to be working is household chores/home improvement activities. This is because most of us who sit in front of a computer screen or talk on the phone for a living don't produce something that we can reach out and touch, see or hold. We, therefore, compensate by trying to complete tasks with tangible results.

The other thing that we do is that we print stuff out and create piles of paper, files full of folders and shelves full of stuff. Thus the clutter. I am not judging, because even though I realize that this is, subconsciously, the reason why my office is usually messy, I rationalize these bad habit by saying "its just easier to read stuff off paper," or "if I print it out then I can make notes during that meeting..."  

The moral of the story is that the mess (with the possible exception of the dog pee) didn't get there by accident. It's there because you need it to be.