You gotta start somewhere

I had a beer tonight with David Brown, and much to my surprise he whipped out this old email that he recently stumbled across. This email is the birth of TechStars. To give you a little context, Boomtown Enterprises was the name of a small investment fund that David and I operated at the time. I edited the original email very lightly to fix one typo and in one case to protect the identity of the innocent.

From: David Cohen
Sent: Wednesday, February 08, 2006 10:12 AM
To: David Brown
Subject: boomtown

I’m just thinking this can be one of the boomtown businesses.

Providing seed capital to startups with only an idea.

The concept:
1) We take applications on the web site. Only seed stage companies need apply (those with passionate people and an idea, but no way to get going or who are not sure they can do it on their own – maybe just need a kick in the ass and someone to believe in them)

2) We fly or drive to interview the ones that sound good (perhaps organizing small tours), or have them come here on our dime.

3) We offer the promising ones $10k for a 2% non-controlling, non-board seat interest of their company. They have to come to Boulder for 2-3 months to start the company up.
a. They can work in our offices, or in a hotel, or wherever they want. We provide internet connections, a little office space, etc.
b. They can use the 10k however they want.
c. We have the option to buy 2% more of the company for another 10k at the end of the 2-3 month period.
d. We provide free consulting while they’re here including product feedback, how-to advice, etc.
e. We organize weekly (or bi-weekly) dinners with investors, IP lawyers, tech experts, etc (basically using our contacts to get people to donate a little time).

4) Based on how they do while they’re here, we decide if we want to invest more or not when they leave. This should be easy, since you’re really evaluating the people as much as the product (do they work all hours, do they have passion, etc)

5) If they want, they can stay in Boulder and grow their company here, working within our office space (renting it). Perhaps we have some kind of “space, connectivity + consulting” lease rate.

The only drawback I can think of is that we’d probably need to get a slightly nicer office to really attract companies. We’d have to look successful, and have an environment with couches, whiteboards, etc for them to work in optionally. But we could grow that over time once we get a few and have a good feeling that it’s working.

I am thinking I’ll start working on the web site. Are you cool with putting this kind of info/offer up on the boomtown site? We don’t have to actually do it, I suppose, but we can at least start taking applications and see what’s what. Maybe generate a little word of mouth somehow, and who knows. We can start with a summer program this year. Sublet or rent some open office space from this place for just 3 months or something. Start trying to spread the word a little bit on college campuses, especially CU, CSU, DU, etc.

Thoughts? I think it sounds really cool. Yeah, we have no idea what we’re doing.

So that’s how we came up with this crazy idea just 868 days ago. I remember putting up the basic web site later that same day. Obviously, it has evolved since then. Now we have some sense of what we’re doing, for example. We didn’t launch TechStars that summer - it just wasn’t enough time to raise the necessary funding and morph the idea into what would ultimately make it successful - being mentorship driven. But we got there the next summer, and we’ve been learning and evolving ever since.

I’ve spent a bunch of time with a handful of the TechStars teams in the last few weeks. The first week of TechStars was a complete whirlwind (lots of new people to meet, presentations from a bunch of big tech vendors, learning the lay of the land in Boulder, etc). Now the teams have caught their collective breath and are starting to realize just how quickly the summer rolls by when you’re creating and building a business.

While it’s fun to run and gun during the early stages of business formation, I’ve always been insistent that the teams that I work closely with map out their work for the summer early on. It’s not something that’s set in stone but is a good guide of where we think we can get to in a 12 week period. These roadmaps get modified on a regular basis throughout the summer but the overall framework generally remains the same (in part because each team is striving to make discernable and demonstrative progress by the final “pitch” day at the end of the program).

I’ve been around plenty of start-up businesses. Some have been more methodical than others at planning out where they were going and what they were doing; at collecting data early on in their dev process from prospective users and working that into their product thoughts; at working their dev cycles to allow key issues to be surfaced earlier rather than later; at thinking through scale before their first users hit their system; etc. Others, not so much. I bet you can guess which ones have the higher success rate…

I just got out of a great meeting with the Foodzie founders. I invited them over for lunch for multiple purposes, all quite frankly benefiting me.Darby my oldest daughter and her friend Emily are working for Lijit helping with some much needed testing of our service this week. As part of that I wanted to give them a feel for some of the startup thought process and the road that gets you to that point in your life. The other night I had the fortune of getting to know some of the new TechStars teams including the people behind Foodzie. Their business immediately resonated with me and I was impressed by the three founders including Emily Olson one of the female founders that are part of this year’s more diverse collection.

The Foodzie’s were nice enough to come by, tell us about their business and passion they have for it. We got the full download on how the passion for food slowly morphed a chemistry major and her buddies into a full blown, quit our jobs, entrepreneurs. I love stories like this and I’m grateful they took the time to share it with us.

Having been someone who looks for specialty foods from time to time on the Internet, I think this is an outstanding idea. I was impressed with the backgrounds of the founders and the mature way they look at what they are doing. Clearly, they also know how to use press to their advantage as they were mentioned in both the Rocky Mountain News and The Daily Camera.

I look forward to tracking their success over the coming months. As a benefit I got the low down on the best cookie out there and I will let you know when you can order them through Foodzie.

Photo Credit: LINDA MCCONNELL

Last week, some great folks from Google spent the day with the new founders at TechStars. Kevin Marks and Dion Almaer (also the founder of Ajaxian) kicked off the day with a great detailed tech talk. They covered App Engine, Open Social, Gears, Android, and some other awesome Google code projects.

Many parts of the talk stuck out for me, but perhap the most memorable was Kevin’s well-thought-out discussion of How Not to be Viral. Kevin added a great deal of color when he stated that “if your application behaves like a virus, people will develop an immunity to it.” Thanks to Andrew, here’s a clip from the TechStars Community site which I’ve embedded here with Kevin talking to us about this.

You can get great detailed video and audio content like this and participate in the community with our founders and mentors over at the TechStars Community site, or just subscribe to it by RSS now.

Kevin also talked about “building your pleasure model before building your business model,” alluding to the fact that if users don’t first get pleasure from your application, then your business model will never be a factor.

Dion also led some great discussions including one on mobile that stood out to me where he told us that Google believes that “the web will win on the phone.” By this he meant that standard web protocols will drive the amazing mobile applications of the future. I couldn’t agree more - we’re seeing some pretty amazing Android and iPhone apps lately that are proving the viability of this model, including a fantastic implementation by Brightkite and also one by Socialthing.

We finished up the day with the story of Feedburner, let by Dick Costolo (Founder and CEO) and Rick Klau (VP Biz Dev, now Strategic Partner Develoment Manager at Google). This often hilarious story of the birth, rise and Googlization of Feedburner was a real treat. Dick kept talking about his drive to “get all the feeds.” Often, he said, Rick would come back with 5 feeds and a rabbit (representing some random business development deal). Dick would tell Rick to get rid of the rabbit, and go get more feeds. Often, Dick would ask “Do we have all the feeds yet? No? Go get all the feeds.” The lesson: This simple and easy to understand mantra kept Feedburner from veering off course.

We had a great time with Google at TechStars, and want to thank Dick, Rick, Dion, and Kevin again for spending their time with our founders. See you soon guys!