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I just got off a Skype video chat with Eric Wilker, who is an Executive MBA student at USC in addition to being SVP of Business Planning & Operations at Warner Bros. He had to interview an entrepreneur as a part of his class and asked me if I'd be game. I said sure, so long as I could capture the session on video and share it with you. We discussed a wide range of topics, including:
Here's the video of our chat about being an entrepreneur:
This week, Facebook Home, an Android app that will change a user’s phone home screen and core features, will make its consumer debut.
Facebook's Home initiative is the latest salvo in the mobile engagement battle, which has been looming since the introduction of the iPhone in 2007, although most are just becoming aware of it now. In fact, the 'engagement crush' is just beginning and will get much worse in the next few years.
This issue is so significant that CEOs and CMOs of Fortune 500 companies are going to find their jobs in jeopardy if they don't take immediate and decisive action to launch a meaningful mobile strategy for their companies. Many companies mistakenly think their businesses do not have anything to do with mobile, but that's incorrect: Mobile devices like smartphones and tablets are the way consumers and businesses will interact with brands and each other. This means that every business needs to have a coherent mobile strategy that at its core considers how its customer base will want to interact with it using mobile devices.
I'm traveling in Barcelona, Spain this week, and Hertz gave me the best upsell ever: A 4G MiFi for 8 euros per day.
The last time I traveled internationally just three years ago, these didn't exist. Now, this little device, which I rely on at home, has made all the difference traveling internationally.
This wonder combo has allowed me:
I just read this post about how the startup Level Up has raised $41MM but may now be running out of cash, and according to the article is down to half its previous employee count. It got me thinking about a big mistake I see startups make, which is over-extending before finding true product/market fit.
I was well aware of this danger at Socialize, and we still made that mistake. At one point in early 2012, we were up to 16 employees. When we sold to ShareThis, we were down to six. It's not that six employees was too few -- it was exactly the right number and type of employees for the stage of our company -- it's that sixteen was way too many. We didn't absolutely need that many people to build and sell our product, even though we felt at the time that we did. The six employees that ended up forming the core of our company in the year before we sold it were all very key employees and are incredibly productive, and that's what we needed to find product/market fit.
So if a CEO is acutely aware of the issue and still falls into the trap, I can't imagine what the siren call of rapid expansion does to CEOs who aren't watching out for it. But it is possible to get around it: On the opposite side of the spectrum you see companies like instagram that sold for $1 billion with just a dozen employees.
So I've come up with a mental framework to optimize the outcome of a new startup dealing with this issue.
Daniel's Framework For Optimizing Product/Market Fit:
A few weeks ago, Heidi Roizen, a well known venture capitalist with DFJ and longtime entrepreneur in Silicon Valley, called me a cockroach.
Usually, it would be offensive to be branded as a cockroach. But in this case, it was awesome. Heidi's exact quote was this:
So there you have it. Great entrepreneurs are like cockroaches, doing whatever they have to do to survive.
Vinod Khosla is a legend in Silicon Valley. He's the powerhouse behind Khosla Ventures. Way before that, he was one of the founders of Sun Microsystems, and then became a general partner at Kleiner Perkins. He's also done many other amazing things. Vinod gave the keynote at Stanford's recent Graduate Business School event. Afterwards, I gave a breakout session talk with Heidi Roizen, where she called me a cockroach.
Vinod's keynote contained all the stuff you'd expect to hear from a super successful entrepreneur and VC. For most people, I'd imagine it was underwhelming in its obviousness, but only because hearing someone talk about what it takes to be successful is so different from actually doing it. Vinod offered no magic bullets. Just a solid list of advice that any current or want-to-be entrepreneur has heard and internalized. Things like, "Be a risk taker." "Be a good listener."
That's the entire point of why I'm writing a blog about his talk. There are no silver bullets. The key is to execute flawlessly on the basics. And that's so incredibly hard that most people don't do it.
Vinod highlighted the importance of perseverance in his talk. But the actual example of how he got into Stanford business school is what makes it shine, and what separates him from so many others.
I had to get back to our new SF office after a meeting, and instead of taking a cab, I decided to try Lyft. One the way over to the meeting, I had taken an Uber car that my colleague Adam ordered from his phone, making it a "taxi-free" day.
This was my first time trying Lyft. I submitted a request for a pickup using the iPhone app and was told "Romeo will arrive in 9 minutes." Funny enough, this was also Romeo's first day as a Lyft driver. So we had a great convo about what the experience was like for both me, and him, as first timers. Lyft drivers are the ones with pink moustaches on their cars. Here's what Romeo's car looks like:
I took a video as I used Lyft for the first time. Here's what my experience was like:
Why do some people succeed at fitness while others fail miserably? If there were ever a subject I could be called “obsessed” with, this would be it.
This subject pains me greatly; it pains me, because if people simply internalized the things I'm about to say, obesity would cease to be an epidemic.
Yet even the smartest people think about fitness in the wrong way. They'll often reduce fitness down to “eating less and moving more.”
As an example, I’ll often see the smartest tech minds in Silicon Valley become enamored by the latest fitness gadget. These same people constantly struggle to get fit, as evidenced by the tweets from these very same devices. (This also leads me to believe that there is no correlation between fitness IQ and actual IQ, but that’s a different subject altogether.)
You see, the biggest myth in all of fitness and nutrition is that people fail because they're lazy about exercise... that they fail because they didn't have the willpower to "eat less, move more."
As was reported in TechCrunch today, we've just signed a deal to sell our startup Socialize to ShareThis. Although having a successful exit is a dream for many entrepreneurs, I find myself feeling a wide range of emotions and thoughts. I'd like to share some of them in this blog to provide an honest assessment of what it's like to work tirelessly on a startup and then sell it.
The first thing I want to say is that often upon a sale, you'll hear everyone involved talk about how "pumped" or "excited" they are. The truth of the matter is that it's much more complex than that. There is absolutely a sense of excitement. But I've asked for, and gotten, permission from ShareThis to speak honestly about the wide range of feelings and to speak to the complexity of it all so I can provide a more thoughtful and honest assessment than one typically sees in these situations. Think of it as a peek under the covers of an acquisition.
I've broken this blog up into several parts:
I'll start with the really positive aspects: We're selling Socialize to the absolute best buyer I can imagine. ShareThis is a very fast-growing company with a strong team. As Forbes recently reported, ShareThis is #35 on its America’s Most Promising Companies list. Forbes pegged 2012 revenue at $30MM, and it’s on a rocketship-like growth trajectory. ShareThis didn't just buy us for our talent, but also because its beliefs around the value of social are closely aligned with our own, and because mobile is becoming a big part of its business (see this related blog post with my warning to Fortune 1000 CEOs about the sudden growth of mobile). ShareThis wanted to gain an immediate leadership position in social via the mobile channel, and with Socialize it's achieved that. And Socialize has gotten an incredible platform from which to further develop our social infrastructure for mobile devices. The fit just couldn't be better. Often when I would describe Socialize to people, they would say "so it's like ShareThis, but for mobile, right?" Exactly. So I'm very confident that together, the value of the two companies will be greater than their respective parts, and I'm very pleased that ShareThis saw the same benefits (dare I say, "synergies"). A lot of the credit here goes to Nanda, ShareThis' CTO, who called me out of the blue one day and said "we should do this deal; I know it'll be perfect," and to the ShareThis team for backing Nanda's vision.
While I can't speak to the terms of our deal with ShareThis, I'll use the experience to walk you through the general framework of a deal process, so you understand the multiple steps involved. What I'm going to share is not a reflection of how our deal went down -- I'm pulling from various deals I'm personally familiar with or from accounts I've heard from other entrepreneurs who have also sold.
The first thing I want to highlight is the stress that a deal puts on a startup. Uncertainty kills innovation, and for that reason, if you think you want to sell, it's critical that you get the process done super quickly. Thirty days from start to close is an ideal (although likely impossible) goal to shoot for. Ninety days is a reasonable and achievable goal.
It's also likely that the acquiring company won't be in as much of a hurry as you are: Getting the deal done is likely a secondary priority for them as compared to running their main business. For the startup, it defines the future of the company -- or at least, it's one major possible outcome with huge implications for the startup. There are a few exceptions on the acquiring side -- for example, Facebook is known for moving blazingly fast in deals as a part of its strategy to keep startups it's interested in from being scooped by other acquirers. As I assemble best practices for getting deals done, speed is at the very top of my list.
Next, from the startup's perspective, is evaluating alternatives. This is where someone like Ezra is invaluable. As I mentioned in this post, Ezra Roizen is a banker, but he's different from all the others I've met. Ezra is a scrappy "get it done" deal magician with a small team and a huge rolodex. He can get a temperature read from someone (usually either the CEO or a board member) at any potential acquiring company you'd like to speak to. It'll be up to you to decide what companies you want to target, and then Ezra can take it from there.