Data vs. Facts

The notion of “data vs. facts” made its way into several conversations today. I was at an interesting lunch today where we rolled around the in the idea of the different between them and then I had a call with an old friend on my way back to the office where he asked me a series of questions about my view of “fact based organizations” and decision making in startups.

I often say to people, “please recognize that I am just providing data – it’s up to you to decide what to do with it.” I also love the quote “the plural of anecdote is not data.” Without devolving into an analysis of the classic business school data -> information -> knowledge hierarchy, there can be a huge difference between data and facts, especially in an entrepreneurial context.

Entrepreneurs get data continually from all directions. One of the greatest providers of data are VCs and board members. A gigantic mistake that many entrepreneurs make is to interpret the data as facts. Many VCs deliver data in a very self-unaware away – basically as assertions of truth (which I’ll call “facts” even though I know the definition can be murky.) Unfortunately, the data that drives these facts are often invalid resulting in an invalid fact. If the entrepreneur doesn’t view the fact as data, he will immediately build conclusions on a bad (fact free) foundation. Blech.

Rather than train all the VCs in the world to deliver their data differently (and – more importantly – help them understand that data <> fact), it’s better for the entrepreneurs in the world to make sure they are sorting between data and fact correctly.

This goes both ways (e.g. the VCs aren’t the only guilty ones here.) As I drove home tonight, I pondered my end of day wrap up drink with an entrepreneur (who I really enjoy and respect) who spent the day with some of the TechStars companies. I disagreed with some of the assertions he made about several of the companies he’d met with today and the data he delivered to them. I expect he presented them very strongly (that’s his personality) and the entrepreneurs on the receiving end likely interpreted his assertions as fact, when they were only data. Hopefully upon reflection (or maybe reading this blog post) they’ll realize he was merely giving them data.

They should also remember that the plural of anecdote is not data. And – just to make it complicated, it might be the case that his data is fact, but you have to determine that for yourself. Finally, please remember that this blog is merely data.

I was at a meeting with the other two TechStars founders yesterday (David Cohen and David Brown) to discuss some new and exciting things around TechStars 2008. Jared wasn’t there and in a sudden burst of amazing observation skills, I asked “where’s Jared?”

Both David’s chimed in an said “he’s in Iraq.” I had one of those moments where you pause and process the words to try to make meaning of them. Then I remembered that Jared was going to Iraq for Thanksgiving to support the United Way’s efforts to assist in the development of nonprofit and humanitarian organizations. He’s blogging his trip and starts with a thought provoking post titled My Arrival in Amman, Jordan.

Jared is a long time friend (he was one of the first 10 people I got to know when I moved here - thanks Dave for the introduction.) I have huge respect and adoration for Jared and am delighted he’s running for Congress. Amy and I are big supporters and believe Jared is one of the clearest thinking, most principled, and true to his values person currently running for office today. While I don’t agree with 100% of Jared’s positions, I know he’ll always listen, learn, express his point of view, and engage in every discussion.

If you are a voter in Colorado’s 2nd district, I encourage you to get to know Jared. If you are a supporter, please donate to his campaign (any amount is helpful.) And – if you are interested in participating in Thanksgiving in Iraq from the comfort of your home, follow the blog.
Posted in:

I’ll now continue the slow roll with #3 of my top twelve startup tips from this summer at TechStars.

You’ve probably heard the expression that it’s hard to listen while your lips are moving. While technically this is not universally true (it’s more the talking that matters - moving ones lips while listening is certainly distracting but perhaps less so than actually emitting noise), I still find it to be an excellent rule of thumb.

Assuming you’ve surrounded yourself with great and engaged mentors, you’re probably going to hear lots of advice. The thing that many younger entrepreneurs fail to grasp is that it’s extremely important to internalize the advice so that you can decide whether or not you’re going to reject it or accept it. In order to internalize it, you have to listen to it. A key indicator that you are not listening enough is that you are saying “yeah but” often. “Yeah but” is excellent and very, very necessary. But it comes at the end of listening. Another helpful clue that you should be listening is that someone else is speaking.

Next time you’re working with someone that you respect and taking their advice as data, try this. Listen. Wait until they stop talking. Think. Now speak.

I have always had this problem myself. I’m fairly introverted, but when it comes to being an entrepreneur in a room with a bunch of other entrepreneurs, I’m much more “type A.” I want to get in there. I want to say “yeah but” so often that it nearly kills me. But I consciously practice the art of intense listening.

Too many entrepreneurs that I see just love meetings. They love to debate, discuss, rebut, and repeat. This can be healthy, but ad nauseam it’s not helpful. When this behavior is coupled with crappy listening skills, it becomes downright wasteful and irritating.

This also applies to conversations with your customers. It’s very important to resist the urge to tell them why they are wrong and you are right. My friend Eric Marcoullier said something yesterday that I think generally holds true. I’m paraphrasing, but he said “You will never convince your customer that they are wrong about what they want.” If you are trying, you are speaking for no reason. And, you are not listening.

If you can’t listen, you can’t improve. If you don’t improve, you’re going to die. It’s important not to die. Listening is a prerequisite.

Spend your next day of meetings listening more than you talk. You will notice the difference. Just don’t get in a Mexican standoff with another reader of this blog. That would be weird, what with all that listening and so little talking.

Here’s the second of my series of posts on my top twelve startup tips from TechStars this summer. It’s about finding and engaging great mentors.

Most first-time entrepreneurs that I know only seek out mentors for their companies when they decide they want funding. They do it because they have to, as part of the process of attempting to raise money. To further the process, they begin to listen to and react to the thoughts of investors as a way of gaining favor. I think that this is very much the wrong way to think about mentorship.

Great mentors need to be weaved into the fabric of any startup from the beginning. Most people already have one or two mentors in their lives. Many don’t even know who their mentors are or have been until they reflect upon this for a moment. Often, I think that’s a good sign and indicates a positive mentoring relationship. For many, it’s their fathers, their best friends, a past boss, or perhaps a college professor. Stop for a moment and ponder the impact that these people have had on your life so far.

You need that same kind of impact on your business. It should be obvious.

How do you find potentially great mentors?

First, you make it a priority. Think about your own network. Who has vastly more life or startup experience than you do? Start there.

If you need to extend the net, the next step is to work your network. Start learning about local companies that you respect and consider seeking out their founders or key executives. A neat way of approaching them initially is to explain that you admire the business that they started, and would love to hear the story of how it was built in hopes of making your own startup successful. Do your research - know the basics of the story and prepare some questions in advance. Often founders of successful companies are actively engaged in the startup community anyway, and love thinking about other startups and meeting energetic founders that remind them of a younger version of themselves. Don’t just pick a mentor because of how they look on paper. Read their blog if they have one, and study the things they’ve done in their lives and in their careers. A great mentor for you is not necessarily a great mentor for everyone.

What makes a great mentor?

Ultimately, great mentors see something in you, and help you reach your potential. They don’t always do this with direct advice. Often, they do it with introductions, resources, or through the process of thinking out loud with you. Your best mentors will become friends and permanent fixtures in your life.

Approaching potential mentors

People make the natural but routinely incorrect assumption that great mentors would simply be too busy to help them. Ask anyone who has sought meetings with successful entrepreneurs in Colorado - I think you’ll find that when you approach people in our community you’ll find an amazing number of open doors. Most people just never knock on them out of fear of rejection. This is very silly. Imagine how good it must feel to be asked for advice from a smart, dedicated, and motivated founder like you. Keep in mind that you have something to give back too.

Engaging potential mentors

There is one final trick to getting the most from relationships with mentors. It’s not enough to find great mentors, ask a few questions, and move on. You have to engage them. By definition, they’re not a mentor until they’re actively engaged.

This sounds simple, but almost everyone screws it up. Engagement is not accomplishing by sending an occasional email updating the person on what you’re doing or the major news every once in a while. It’s not built by offering to take someone to lunch. It’s built over a long period of time with small, regular, interesting, and thought-provoking communication. In my opinion, the best way to do this early on is by email as it maximally respects the time of the mentor that you are engaging.

A great example

I want to give you a great example of how to do this. David and Heather Duey get this. They have emailed me dozens of times over the course of the last 9 months asking questions about their startup, Georneys. I’m connected to them only in a couple of ways. First, they’re from Tallahassee, Florida and I grew up in Florida and am a big Seminoles fan (yes, let the mockery begin). Heather and David knew that from reading my personal blog. Second, they’re doing a startup, and I love startups. That’s it - I had never even met them until after a remote mentoring relationship had developed. They first contacted me after applying for TechStars. When they didn’t get in this summer, they continued the dialog. They frequently emailed me with well thought out questions that allowed me to spend just a few minutes to get them some feedback on their business. Over time, they began to email me more complex or deep questions about their business. Now they’re coming to Defrag and planning to move to Boulder to be in a more entrepreneurial community. I know them personally now - and I like speaking to them about their business. They probably don’t know it, but there’s two way learning going on. For example, I’m a regular reader of both of their blogs and through them I’ve come to better understand some of the trials and tribulations of co-founding a company with a spouse (not that I plan to try that!).

Building the relationship

Once you have established a relationship, the key becomes regular engagement. While keeping the early relationship low-impact on the person you are getting guidance from is important, you can certainly step it up over time. The ideal scenario is to involve them directly in the strategy associated with the development of your business, your product, or you as a person. For example, you can engage the mentor by soliciting direct feedback on an early prototype of your product. Even if you get a trickle of feedback from them, you have the key ingredients of engagement. Think about their points, make at least one change or improvement that you agree with (there must be one!), and reply with an email succinctly detailing what you’ve done about each point. It’s OK (probably even good) to disagree with some of the points when appropriate - just efficiently explain why. In your response email, it’s key to ask them to give you more feedback now that you have made those changes. Keep the loop going in this way and you’ll develop a positive conversation with the mentor, improve the product, and build a relationship. This mentor will begin to associate you as with the concepts of strong follow up, willingness to be coached, logic and critical thinking, and most of all forward motion. What I’m describing is a process that allows you to build a remote mentoring relationship that is low impact for the mentor, but that ultimate leads you (if you’re good) to a point where asking for a meeting will likely result in success. From there, you can really get to know the person and continue this positive feedback loop.

Mentorship evolved

Brad Feld (who is certainly one of my mentors) wrote a terrific post about mentorship some time ago that has a special spot in the quick-access RAM of my brain. He said:

“…one thing stands out: the rare, but brilliant moment when the relationship shifts, the distinction between mentor and mentee dissolves, and you become “co-mentors”. Even if you aren’t “peers,” the learning becomes bi-directional. Everyone in a mentoring relationship should strive for this equilibrium, because it is here where the greatest learning occurs.”

I have some mentors that I’ve reached this stage with. David Brown was my co-founder at my first company, and was always someone that I consistently learned from. I think our relationship has reached equilibrium, and I hope that he learns as much from my knowledge and experience as I do from his. I haven’t worked with him on a daily basis in years now, but we still bounce important things off each other on a regular basis. We’re working in different worlds now, but are fascinated by what goes on in each.

The fruits of meaningful engagement with great mentors

At TechStars, when I look back at the companies who are seeing early success I see high levels of mentor engagement in all cases. They didn’t just take meetings with the mentors that we dropped in their laps. They engaged many of them that they respected in ongoing, meaningful, and independent conversation. They took advice for what it’s meant to be - something to think about. They reacted to the advice not just in the pursuit of pleasing the mentor, but in the pursuit of building value while being intellectually honest with themselves. They communicated regularly and effectively with their chosen mentors, involving them in the hard thinking that was necessary to build their companies. They regularly solicited feedback as they built their product, incorporating some of it and continuing the positive feedback loop with their mentors. They gave their mentors positive experiences with their passion, ability, product, and company on a very regular basis. The result was predictable. Those mentors were among the first to stick their hands up to participate in funding the company and continuing to stay active with it.

Summary

Great founders intuitively understand the importance and role of mentors. They seek them out for the right reasons and engage them on an ongoing basis. I think the presence of great mentors who are actively engaged (not just listing their names on the advisory board) around an early stage company is a strong indicator of future success.

Here’s the first of my series of posts on my top twelve startup tips from TechStars this summer. Remember, they’re in no particular order as they’re all generally important to keep in mind.

I’ve seen Everythingitis kill many a startup. This is the disease a startup gets when it sets out to add more features than the competition This is a fundamentally flawed strategy that presumes that users will adopt a new service just because it has more features. The reality is that most users start using a particular service because it does one thing really, really well. Think about your own experiences and you’ll see that it’s true.

Several TechStars companies came in with a plan like “MySpace + FaceBook + YouTube + kitchen sink.” We coached them early on that they have to be the best in the world at something, and then build from there. We asked them focus on their passion, and to pick the smallest meaningful problem that they could go and solve better than anyone in the world had ever done before.

I love what Ev Williams (founder of Odeo, Blogger, Twitter) says about this:

“Focus on the smallest possible problem you could solve that would potentially be useful. Most companies start out trying to do too many things, which makes life difficult and turns you into a me-too. Focusing on a small niche has so many advantages: With much less work, you can be the best at what you do. Small things, like a microscopic world, almost always turn out to be bigger than you think when you zoom in. You can much more easily position and market yourself when more focused. And when it comes to partnering, or being acquired, there’s less chance for conflict. This is all so logical and, yet, there’s a resistance to focusing. I think it comes from a fear of being trivial. Just remember: If you get to be #1 in your category, but your category is too small, then you can broaden your scope—and you can do so with leverage.” - Ev Williams

Guilty as charged. iContact was a company I started a few years back that had a serious case of everythingitis. Oh yes, it did more than any other mobile social networking product that existed at the time (more than Dodgeball did then, and more than Rabble or Loopt does even today). And the market said: “So what?” The market didn’t understand what iContact did better than anybody else in the world. And so iContact died. That’s how I learned that lesson.

Ev’s last point is key. If you’re the best in the world at thing X, it’s much easier to get to X+Y. You’ll have credibility from your customers who already love you for what you do so well. They’ll be patient and willing to help you build Y. It’s a place of strength, and it can be so much easier to arrive there.

If you’re early in in the life of your startup, do yourself a favor and figure out what one thing you’re going to be the best in the world at doing. By all means, don’t stop there. Just spend some time to think about how you can cross the finish line and avoid everythingitis. The market will love you for it.

So, be the best in the world at something. And consider making it something specific and narrow.

Good example:

“We’re going to be the best in the world at driving new attendees to paid conferences.” (simple, specific, meaningful goal, and a clear market that would care)

Bad example:

“We’ll be the best in the world at social networking.” (too broad, no real meaning to put your finger on, doesn’t mean people will care)

Next up: Tip #2: Find and engage great mentors. Coming soon.

You’re reading this blog, so I’m going to take a wild guess that you’re a Facebook user. If so, you might just want to head on over and add yourself as a fan to TechStars there. You’ll get the most important news on Facebook, and help spread the word about what we’re up to.

And while you’re there, be sure to add the Sticky Notes and ScrapBox applications from one of our companies from this past summer, J-Squared Media. They’re now well over 6 million users and are seeing a quarter of a million sends each day.

It’s been reported a couple of times on TechCrunch and elsewhere that Startup Weekend is somehow affiliated with or was instigated by TechStars.

This is not the case. Startup Weekend is the brainchild of Andrew Hyde, who is a personal friend and who was operating a camera for much of this past summer at TechStars here in Boulder. Andrew proposed his idea to me and I was supportive, suggesting that he proceed and organize it. So he did.

The first startup weekend took place in Boulder on July 7 and 8th. At this time TechStars was in full swing. Several (perhaps 4 or 5) of the 26 founders from the TechStars companies this summer participated. I also participated and live-blogged the entire event. About 80 other people who were in no way affiliated with TechStars participated at the first Startup Weekend in Boulder as well. Most of the TechStars companies did not participate in any way.

I think Startup Weekend is a great way to build community. Andrew has talked about this before as being the main goal of Startup Weekend, and so have I. So it should come as no surprise (and Mike is very right) that it’s not primarily about building sustainable companies. Instead, think of it as building sustainable communities.

The reason for this post is simply to set the record straight about Startup Weekend. It is not a child of TechStars. It’s the work of Andrew Hyde and many others who have contributed to the efforts of Startup Weekend. Andrew has done a great job with this and deserves any credit for the origins of the idea or the progress the Startup Weekend has made nationally and worldwide.

Brad Feld and I will be at Blog World Expo in Las Vegas later this week (Nov 8-9). In addition, Ari Newman of Filtrbox (a TechStars company from this past summer) is on a panel called “Tracking Reputation in the Blogosphere.”

If you’re going to the conference or will be in Vegas on Thursday or Friday and are curious about TechStars, please comment or contact us.