part 2 - entrepreneurship - lessons from my 20s by ryan allis

Lessons from my 20s

entrepreneurship Part II:

ABOUT THIS PRESENTATION

THIS presentation can be found Online at

www.hive.org/20s

PART 2 TOPICS

Entrepreneurship The big opportunities Leadership Business Planning PRODUCT DEVELOPMENT Innovation

PART 2 ENTREPRENEURSHIP INCLUDES SECTIONS ON

Venture Capital Marketing Building systems BUILDING A TEAM STRATEGY & EXECUTION Steps to get started

Lessons from my 20s

Purpose-driven entrepreneurship

PART II, Section 1

A definition

Individuals who build organizations

which scalably & sustainably

solve human problems

Entrepreneurs (n.)

Choosing Your PROBLEM Choosing Your PROBLEM How Will you Use Your one Wild and Precious Life?

Be a purpose-driven entrepreneur

entrepreneurship Is about solving problems And creating value

For humanity

The virtuous cycle of purpose-driven entrepreneurship

An entrepreneur can bring immense value to humanity by building a For-purpose Business that earns money that can be used to reinvest in more opportunities that

make the world better

Common traits of entrepreneurs

Initiative Drive toward efficiency Bias toward action Ability to take feedback Tolerance for stress Determination Decisiveness Courage Ability to deal with failure

Perserverence Creativity Ability to learn quickly Ability to plan Ability to delay gratification Drive to achieve Ability to prioritize Ability to build a team Ability to inspire & lead

A quote

Both a sparkplug & catalyst the entrepreneur is at once the driving force behind productionand the agent who combines the other resources in what is hoped will be a profitable venture

- McConnell and Brue in Economics

Understand the system

THERE IS AN ENTIRELY DIFFERENT WORLD OUT THEREA WORLD OF PROSPERITY & UNLIMITED WEALTH You can enter this world IF YOU ARE AWARE IT EXISTS AND YOU WORK HARD


TO ENTER THIS WORLD YOU MUST UNDERSTAND HOW THE SYSTEM OF ENTREPRENEURSHIP

WORKS


THERE ARE THREE WAYS TO BUILD WEALTH THROUGH ENTREPRENEURSHIP THROUGH A SALARY, THROUGH DIVIDENDS, and through THE SALE OF

STOCK YOU OWN

Impacting Billions of lives

So HOW CAN YOU IMPACT THE LIVES OF OVER ONE BILLION PEOPLE?

Impacting Billions of lives

WELL YOU NEED TO BE WORKING ON A

BIG PROBLEM!

Solving big problems

Big Problems are actually

BIG opportunities!


TOO MANY PEOPLE ARE FOCUSED on

TOO SMALL OF A PROBLEM!

Two key steps many aspiring entrepreneurs miss

There are two critical First steps for any entrepreneur

THE Two Steps to success in entrepreneurship

First you must find A problem that you Passionately want

to solve


Next devote your life to building the Team that will solve That problem better than Any other group of humans

That has come before

Step 1: Find a really big problem you are passionate about solving.

Step 2: Devote your life to

building the team that best solves the problem


As an entrpreneur If you arent solving A problem worth dedicating 20 years of your life to You wont be able to make it

Through the hard times ahead


A problem Worth dedicating your life to Is often called a

wicked problem

To find your problem, you must create your purpose

The problem you wish to solve Must deeply align with the Life Purpose you created in part 1!

How to do it

work on solving a

big Problem

aligned with your

purpose

Choosing your sector

Once you find the problem You wish to solve then Find The most effective sector To work within to solve it

Choose your angle of attack

The most common ways to solve big problems: 1. build a purpose-driven business 2. Join a purpose-driven business 3. build a non-profit 4. Join a non-profit 5. Join a government agency 6. Run for political office 7. Become a scientist/researcher 8. Invest in companies solving the problem 9. Convene people who are solving the problem


Much of this part of the presentation is about

building a purpose-driven business

Be a purpose-driven entrepreneur

In many cases, you can Make the most scalable impact On the world By building a For-profit business that is Socially minded

Example for-profit impact companies

Why Build a for-profit social business vs. a non-profit?

Easier to raise funding to scale Ability to use stock options

Ability to invest in a more experienced team

Better compensation

Faster Feedback cycle directly from customers

Ability to subsidize lower income customers

Ability to invest in R&D


Here is a map of social And economic impact by sector created by Max Marmer in a 2012 HBR article called

Transformational entrepreneurship

A Map of societal and economic impact

Harmful Small Businesses

Harmful Non Profits

ExploitativeEntrepreneurship

High GrowthEntrepreneurship

Contributory Small Businesses

IneffectiveNon Profits

Social Entrepreneurship

TransformationalNon Profits

Societal)Impact)

Economic)Impact)

Transformational Entrepreneurship

Work here in the green!

Look into b Corps

Invest in companies solving big problems

Another angle is to work

At investment funds

That invest in companies that are

Solving big human problems

Venture funds investing in solving big problems

Impact investing leaders

Determining Your PATH IN YOUR Twenties

Determine the big problem you want to solve

Create your life purpose statement

Decide on sector you want to work in to solve the problem

Government Non-Profit Business

Elected Appointed Join Existing Start New Join Existing Start New

Explore widely to find what makes you come alive

Dont a be a cog

Becoming a highly specialized cog

in a meaningless machine

Is no way to live a life

What most people do

What most people do is focus on a specific

Type of job & specialize on a profession

Dont do that

What most people do

Dont specialize on a niche profession

Specialize on a

problem

WHAT YOU SHOULD DO

Instead of specializing on a specific job role

Specialize on a specific human problem that you are

Dedicated to solving

Live an unleashed life

When youre spending your years focusing on

A really big human problem you end up living a

LIFE of purpose


And when youre naturally excited by the

Work that you do you end up attracting more

Positive and capable people


THIS process creates a self-reinforcing virtuous

Cycle leading to greater fulfillment, meaning,

And happiness

Find your mission

FIND A MISSION THAT YOU ARE DEEPLY PASSIONATE ABOUT AND BUILD A BUSINESS TO PURSUE THE heck OUT OF IT

Your motivation

SPEND TIME THINKING AND MEDITATING ON YOUR RAISON DETRE AND FIGURE OUT WHAT CONSTITUTES THE CORE MOTIVATIONS FOR WHAT YOU DO AND What you stand for

Entrepreneurship

BEING AN ENTREPRENEUR IS NOT FOR EVERYBODY. BUT IF YOU FIND ITS FOR YOU AND YOU CAN FIND A WAY TO SUCCEED, it can be EXTREMELY REWARDING.

Entrepreneurship

BECOMing A SUCCESSFUL ENTREPRENEUR IS NOT EASY YOU MUST HAVE PERSISTENCE DEDICATED, TENACITY & THE ABILITY TO DEAL WITH ADVERSITY

What it takes

Entrepreneurship is doing Something others wont for 10 years so you can do what Others cant for the Rest of your life

The big opportunities

Next well look at some of the biggest opportunities In the world right now To build a business That makes a huge impact

A quote

Entrepreneurship is about passion

following a dream and changing the

world with plenty of craziness along

the way.

- Jeffrey Bussgang, Flybridge

Lessons from my 20s

The big opportunities

PART II, Section 2

A quote

I dont skate to where the puck is. I skate to where the puck is going.

- Wayne Gretzky

An innovation Timeline

To put everything Into perspective here is A timeline of innnovation

An innovation timeline

The Wheel(5,500 Yrs Ago)

Iron(5,000 Yrs Ago)

The Legal System(3,800 Yrs Ago)

Ships (6000 Years Ago)

Written Language(4900 Yrs Ago)

The Alphabet(3800 Yrs Ago)

Water Power(2200 Yrs Ago)

Cities Form(6000 Years Ago)

Money(5,000 Yrs Ago)

Abacus(5,000 Yrs Ago)

Steel(2400 Yrs Ago)

Farming (15,000 Yrs

Ago)

Trade(20,000 Years Ago)

Key innovations From 0 to 1800

Printing Press1450

Movable Type1040

Paper 105

Compass950

Gunpowder850

Microscope1590

Electricity1600

Telescope 1608

Engine1712

Steam Power1690

Binary Numbers 1697

Smallpox Vaccine1796

19th century innovation timeline

Electromagnet1825

Internal Combustion

Engine1823

Telegraph1809

Battery1800

Anesthesia1846

Petroleum1859

Telephone1860

Vacuum Tube 1883

Periodic Table 1869

Electrical Grid 1880

Automobile1885

Light Bulb 1800

Radio1897

Semiconductors1896

20th century innovation timeline

Transistor1947

Penicillin1928

Television1926

Airplane1903

DNA1953

Organ Transplants

1964

Satellites1957

Microprocessor1971

Nanotechnology1959

Manned Space Flight

1961

Cell phones1973

Quantum Physics

1900

Genetic Engineering

1973

The Internet1969

1978GPS

World Wide Web1991

CarbonNanotubes

1991

21st century innovation timeline

?

?

Smartphone 2007

Quantum Computer 2012

?

? ?

?

Its now your opportunity to create the future

Lab Grown Organ Transplants

2000

Human Genome Map2001

The Biggest opportunites for millennials

Here are the fields needing Great entrepreneurs between 2015-2050

The Biggest opportunites for millennials

Energy & Environment

Food & Water

Education

Health & Wellness

Engineering Computing

Financial Access

Solar Energy

Wind Energy

Biofuels

Sustainable City Planning

Food & Water

Synthetic Food Production

Vertical Farming

AgTech

Water Desalination

Education

Cloud Education

Low Cost Schooling

Leadership Training

Network Building

Health & Wellness

Synthetic Biology

Brain Mapping

Optogenetics

Personalized Medicine

Reverse Aging

Bionic Eyesight

Low Cost Sanitation

Mindfulness Training

Engineering

Clean Transportation

Self-Driving Cars

Robotics

Space Exploration

3D Printing

Nanotechnology

Long Life Batteries

Low Cost Housing

Financial Access

Mobile Banking

Frontier Market Finance

Digital Currency

Digital Wallets

Computing

Quantum Computing

Converged Smartphones

Data Storage on DNA

Artificial Intelligence

Contact Lens Smartphones

Natural User Interfaces

Government 2.0

Cybersecurity

Climate Engineering

Wearable Computers & HUDs

The Internet of Things / Cloud Devices

Mobile Software

The Biggest Opportunities of Our Generation

Solar Energy Advanced BatteriesBiofuelsClimate EngineeringSustainable City Planning


Food & Water

Synthetic Food ProductionAgricultural Technology Vertical FarmingWater Desalination

Education

Cloud EducationLow Cost SchoolingLeadership TrainingNetwork Building

Synthetic BiologyBrain MappingOptogeneticsReverse AgingPersonalized MedicineBionic EyesightLow Cost Sanitation

Mindfulness Training

Clean TransportationSelf-driving CarsRoboticsSpace Exploration3D PrintingNanotechnology

Long Life Batteries Low Cost Housing

Quantum ComputingConverged SmartphonesData Storage on DNAArtificial IntelligenceContact Lens SmartphonesNatural User InterfacesGovernment 2.0CybersecurityWearable ComputersImplantable ComputersThe Internet of ThingsMobile Software

Health & Wellness

Engineering

Computing

Financial Access

Mobile BankingFrontier Market FinancePayment ProcessingDigital CurrencyDigital Wallets

The Mobile Cloud

Beautiful & Easy Mobile Cloud Services are

REVOLUTIONIZING EVERYTHING

The Reimagination of nearly everything

1994$ 2014$Books$ Printed! Kindle,!iPad,!Nook!

Cameras$ Film!&!Development! Device:Integrated,!Synced!to!Cloud!Cars$ Self:owned! GetAround,!Zipcar,!LyF,!Uber!

Channel!Changing$ Remotes! Hand!Gestures!Check!Out$ Cash!Register! Square!+!Tablet!

CiPzen!AcPon$ Faxes,!Calls! Change.org!CommunicaPon$ Postal!Mail,!Fax,!Landlines! Smartphones,!Email,!SMS,!Facebook,!TwiVer,!WhatsApp,!SnapChat!

Contact!Management$ Rolodexes! Connect,!Google!Contacts!Doctors!Appointments$ Phone!Call! ZocDoc,!One!Medical!

Event!Planning$ Mail!&!Telephone! EventBrite,!Facebook!Events,!YPlan!Fashion$ Expensive!BouPques! RentTheRunway,!Gilt!

Food!Delivery$ Phone!Call! GrubHub,!Munchery,!Sprig,!Spoonrocket!Fitness$ Gym! Nike!FuelBand,!FitBit,!Jawbone!Up,!Basis!Funding$ Friends!&!Funding! Kickstarter,!Fundable,!Indiegogo!

Global!Outsourcing$ Plane!travel! Crowdower,!Exec,!ODesk,!Elance,!Guru,!SmarterWork,!Freelancer!GPS$ Not!available!to!consumers! GPS!on!your!smartphone!

Groceries$ Local!store! Amazon!Fresh,!Instacart!InformaPon!Storage$ Storage!Cabinets! DropBox,!Box,!Google!Drive,!SkyDrive!

Job!Searching$ Fairs!&!Resumes! LinkedIn,!Hired!Knowledge$ Encyclopedia!Britannica! Wikipedia,!KhanAcademy,!CodeAcademy,!Udemy,!Coursera,!iTunes!U!!

Lending$ Banks! LendingClub,!Prosper,!Kabbage,!LendUp!Locks$ Deadbolts! Lockitron!

The Reimagination of nearly everything 1994$ 2014$

Maps$ Printed! Google!Maps,!Bing!Maps!

MarkePng$ Direct!mail,!phone!book,!billboards! Paid!search,!social!ads,!mobile!ads!Movies$ Blockbuster! Ne[lix,!Amazon,!iTunes,!YouTube,!Hulu!Music$ CasseVes!&!CDs! SpoPfy,!Rdio!News$ Television,!Radio,!&!Newspaper! TwiVer,!Flipboard,!PrismaPc!

Note!Taking$ Notepads! Evernote,!Google!Docs!Phones$ Landlines! Smartphones!

Picture!Storage$ Photo!Albums! Facebook,!Flickr,!500px!Plumber$ Phone!Book! HandyBook,!Angies!List!

Product!Design$ In:house! Quirky!Reviews$ Word!of!Mouth! Yelp!

Scrapbooks$ Hand:created! Pinterest!Shopping$ Mall! Amazon,!eBay!Signatures$ Pens!&!Fax! Docusign,!EchoSign!

Social!Network$ Bar,!Alumni!Reunion! Facebook,!Instagram,!Google+,!LinkedIn!Task!Management$ Post:its! Trello,!Asana!

Tasks$ Classieds! TaskRabbit,!Zaarly,!Zirtual!Television$ Cable!&!Bunny!Ear!Antennas! HuluPlus,!Ne[lix,!Apple!TV,!iTunes,!Amazon!Fire!TV!Textbooks$ Buy!them!at!a!bookstore! Chegg,!Amazon!Textbook!Rental!

Thermostats$ Analog! Nest!Trac:InformaPon$ Radio! Waze,!Google!Maps!

Wallets$ Leather! Google!Wallet!Watches$ Swatch!&!Rolex! Pebble,!Basis!!

The Reimagination

No longer do we need A car, A music collection, A video collection

Everything is now available on-demand For an asset-light lifestyle

The Reimagination

SOON EVERY GOVernment service

will be delivered

VIA THE MOBILE CLOUD

The Reimagination

You can monitor your

Heart rate and sleep via your

Android WATCH

The Reimagination

You can now check your

Blood sugar via smart

Contact lenses

The Reimagination

Every device will be connected

As the internet of things

explodes

Lessons from my 20s

Authentic leadership

PART II, Section 3

Leadership

A leader is a person who is committed to something

bigger than themselves

Leadership

An authentic leader is Someone who has aligned Their personal purpose with

their professional purpose

Leadership

Sadly, way too many people Have never taken the time To create their

Personal purpose

Leadership

Even those who do have Personal purpose, so rarely Make it their full time

Professional pursuit

BE a rare duckling

Be the RARE DUCKLING And actually make your Purpose your full time

Professional pursuit!

BE a rare duckling

It may be harder in the Short run, but in the long run Youll be more passionate And create more impact

(And if you do it right, earn much higher financial compensation too)

personal purpose! =! professionalpurpose!

The Authentic Leader!

The Inauthentic Leader

personal purpose! ! professionalpurpose!

INspiration

How can you possibly expect To inspire A team to greatness If you yourself arent working On your purpose with your Full time efforts

The obvious

You think your team wont be Able to tell whether youre a Passionless corporate shrill Or lit up on fire WITH ENERGY??

When your personal purpose is what

you work on daily, work becomes

greatly enjoyableno matter the

challenge.!

The je ne sais quoi of leadership

The way great leaders get that Je ne sais quoi quality about them Is from their deep commitment To creating something that makes the

World better

The je nais se quoi

Imagine the insatiable energy And Charisma you will have When youre actually working On what youre passionate about With your full time effort

Fear?

So what are you afraid of?

Failure?

Fear?

what you should really fear isnt FAILUre

What you should really fear is the

Regret youll feel when youre 80 having

never given it a try

Leadership

An authentic leader Hires missionaries

Not mercenaries

Leadership

You cant be a leader until you know

why youre leading

Authentic Leaders Know Why & Where They Are Leading

Authentic leaders are

vulnerable and open

with their team and

share their struggles!

Authentic leaders inspire a team to move mountains to achieve the mission.!

Authentic leaders paint a clear vision and

communicate it succintly, visually, and

repeatedly.

!

Leadership

NEARLY SUPER-HUMAN feats Are possible when a team is DEEPLY passionate about

their MISSION

Advice on authentic leadership

Here are Six thoughts on becoming An unleashed high-integrity

leader

Find a mission that you are deeplypassionate about and build a business to make the world you envision real

If you want to have the persistence to build a great business work on solving a problem that you are passionate about that aligns with your life purpose

Dont begin the effort of building a company if youre not deeply passionate about the problem you are trying to solve

Too many startups try to solve problems theyre not actually passionate about solving

Building a company is hard. If youre deeply passionate about solving the problem youll get through the years of sacrifice.

Once youve determined the change you seek build a company that sustainably creates that changeat scale.

Lessons from my 20s

Business planning

PART II, Section 4

Business planning

SOME ENTREPRENEURS choose not to create a plan at all And just start working

Minimum viable product On a prototype or

Business planning

I find that its helpful to at least create a short slide deck or exec summary

To ensure you know what youre building & What problem youre Solving before you start building

Whats in your deck?

1. PROBLEM youre solving 2. PRODUCT & TECHNOLOGY 3. your recent traction 4. MARKET & COMPETITION 5. TEAM 6. revenue model 7. FINANCIAL PROJECTIONS

In the first two slides

CLEARLY ILLUSTRATE THE PROBLEM YOU ARE SOLVING HOW YOU ARE SOLVING IT

AND FOR WHOM

Product section

SHOW PICTURES OF A PROTOTYPE OR WIREFRAMES & MOCKUPS MAKE YOUR SPECIFIC SOLUTION

EASILY VISUALIZED

Product section

SHARE YOUR PRODUCTION TIMELINE AND KEY MILESTONES TOWARD INITIAL PRODUCT DELIVERY AND DISCUSS FUTURE PRODUCTS AND SERVICES

Financials section

ADDRESS THE FOLLOWING IN YOUR FINANCIAL PROJECTIONS REVENUE ASSUMPTIONS COST ASSUMPTIONS Revenue by Month COST BY MONTH BY CATEGORY NET INCOME BY MONTH BY CATEGORY TIME TO BREAKEVEN FUNDS NEEDED TO REACH NEXT MILESTONE TOTAL EXPECTED FUNDS NEEDED

Example 60 month financial projections

($2,500,000)

($2,000,000)

($1,500,000)

($1,000,000)

($500,000)

$0

$500,000

$1,000,000

$1,500,000

0! 6! 12! 18! 24! 30! 36! 42! 48! 54! 60!

Revenue Expenses Net Income

Financials section

2015! 2016! 2017! 2018! 2019!Revenue! 18,127! 50,984! 143,401! 403,340! 1,134,461!Expenses! 103,408! 118,539! 139,017! 287,553! 640,004!Net Profit! -85,281! -67,555! 4,384! 115,787! 494,457!

Heres a REALLY BASIC Example annual financial PROJECTION

your financial projections Should list out expenses by major categories

(Labor, Marketing, Servers, OFFICE SPACE, etc.)

Answer these questions in your deck

! What problem are you solving? ! Why are you passionate about solving that problem? ! Whos on your team? ! What is their background? ! WHAT IS THE NEED FOR THE PRODUCT? ! What is your revenue model / cost per unit? ! WHAT IS THE SIZE OF THE MARKET? ! WHAT WILL IT COST TO PRODUCE THE PRODUCT? ! WHO IS YOUR TARGET CUSTOMER?

Questions you may wish to answer in your deck

! WILL YOU NEED TO ACQUIRE ANY IP? ! WHAT ROLES WILL YOU FILL IN THE FUTURE? ! WHAT ARE YOUR FUTURE PRODUCTS features? ! HOW MUCH IS NEEDED TO REACH BREAKEVEN? ! WHAT ARE YOUR ANNUAL Revenue PROJECTIONS? ! WHAT ARE YOUR ANNUAL COST PROJECTIONS? ! WHAT ARE YOUR ANNUAL PROFIT PROJECTIONS?

INcorporating

Before you start operating its important to INCORPORATE

INcorporating

MUCH LOWER TAXES LIABILITY PROTECTION BEING TAKEN SERIOUSLY

ABILITY TO OPEN A BANK ACCOUNT ABILITY TO HIRE EMPLOYEES ABILITY TO RAISE INVESTMENT

THE BENEFITS OF INCORPORATING

INcorporating

TO INCORPORATE YOURSELF YOU JUST NEED TO KNOW

THE NAME OF THE COMPANy THE STATE YOU WISH TO INCORPORATE IN THE NUMBER OF SHARES TO CREATE THE INITIAL OWNERSHIP OF THOSE SHARES

INcorporating

IN THE U.S. you can start a S Corp

C Corp LLC

BENEFIT CORP

Most firms that plan on r a i s i n g c a p i t a l a r e Delaware C Corporations

INcorporating

IN CHOOSING A LAW FIRM LOOK AT REPUTATION & REFERENCES

START-up EXPERIENCE INTRODUCTION TO INVESTORS IPO EXPERIENCE PARTNER CHEMISTRY

INcorporating

ONCE INCORPORATED YOUll RECEIVE YOUR

ARTICLES OF INCORPORATION SET OF BYLAWS SET OF STOCK CERTIFICATES

INcorporating

THEN YOU CAN GET AN EMPLOYER IDENTIFICATION NUMBER FROM THE IRS (YIPEE!) AND OPEN A BANK ACCOUNT

Early equity is based on

1. How far along firm is when you join 2. Your position in the company 3. Amount of capital you invest 4. What you negotiate

Equity Rules of THumb Time Pre-founding

Time of Joining Pre-Seed

CEO 55%

COO 15%

CFO 12%

CTO 12%

SVP Level N/A

VP Level N/A

Manager N/A

Sr. Engineer 5%

Engineer 3%

Staff Member 1%

Investors 0%

Year 1

Post Seed

40%

15%

10%

10%

7.50%

4%

1.50%

1.50%

0.75%

0.30%

10%

Year 2 Year 3

Post Series A

20% 15%

10% 5%

7% 4%

7% 4%

5% 3%

3% 2%

1% 0.50%

1% 0.50%

0.50% 0.25%

0.20% 0.10%

30% 30%

Year 4 Year 5+

Post Series-B

10% 8%

3% 2.50%

2.50% 1.50%

2.50% 1.50%

2% 1%

1% 0.50%

0.25% 0.10%

0.25% 0.10%

0.10% 0.05%

0.05% 0.03%

45% 45%

AS TIME CONTINUES, RISK REDUCES, CAPITAL IS RAISED & VALUE IS CREATED THUS LESS EQUITY iS PROVIDED THE LATER YOU JOIN

Lessons from my 20s

Product Development

PART II, Section 5

The core human desires

Great products fulfill one or more Of the 10 core human desires

1. Safety / security2. Health / survival3. Earning money4. Finding a partner5. Learning

6. Impressing others7. Communicating / connecting8. New experiences9. Finding meaning10. Comfort & relaxation

The 7 characteristics of a great product

1. Fulfill 1+ core human desire 2. Easy to use 3. Beautiful design 4. Highly effective at stated purpose 5. 4x or more markup over costs 6. Recurring purchase/supply needed 7. An easy to remember name

The characteristics of a great product

GREAT PRODUCTs BRING JOY to people and

Smiles TO FACES

The characteristics of a great product

GREAT PRODUCTs ARE SIMPLE ON THE OUTSIDE

AND POWERFUL ON THE

INSIDE

What is product management?

PRODUCT MANAGEMENT IS THE PROCESS OF DEFINING And prioritizing WHAT YouRE BUILDING


Good product management Is driven by a vision Of the way the world

Should be


Good product management Takes into account lots of Metrics and feedback But ultimately should be

Vision-driven

The right type of Product manager

YOUR GOAL IS TO BE HERE ON THE SPECTRUM OF PRODUCT MANAGERS

Design by Committee hell

Maniacal dictator design

The green zone

Open to feedback and data but driven by a strong vision of the

way the world should be.


YOU WANT TO BE SLIGHTLY RIGHT OF CENTER WITH PM

It is better to have a strong vision And be slightly maniacal Then be unsure about the change You wish to create in the world


GREAT PRODUCT managers ARE ABSOLUTELY PASSIONATE

ABOUT THE CHANGE THEY WISH TO MANIFEST IN THE WORLD

Lessons from my 20s

INNOVATION PART II, Section 6

What is Innovation?

THE PROCESS OF CREATING SOMETHING NEW THAT MAKES LIFE BETTER

Innovation (n.)

Innovation

INNOVATION IS IMPOSSIBLE WITHOUT PASSION

Innovation

Most companies arent Innovative because they Lack passion

Innovation

INNOVATORS SEE THE WORLD AS IT SHOULD BE

Innovation

INNOVATORS BECOME OBSESSED WITH MAKING THE WORLD BETTER

Innovation

INNOVATORS FOCUS INCESSANTLY ON BRINGING VALUE TO MARKET


SOME PEOPLE BELIEVE THE GOVERNMENT SHOULD PLAY NO ROLE IN INNOVATION


THE REALITY IS THAT MANY OF THE BIGGEST INNOVATIONS OF THE past 100 years have COME OUT OF GOVERNMENT PROGRAMS


EXAMPLES INCLUDE THE INTERNET GPS CT SCANS


AND ALMOST EVERY DRUG AND MEDICAL ADVANCE IN THE U.S. COMES OUT OF AN NIh FUNDED PROJECT


Government funding For basic research often comes 10-30 years before

Commercialization is possible

Top MILLENNIAL Innovators

Jack Andraka

At 15 he used carbon nanotube sensors to create a test for pancreatic cancer and won the Intel International Science and Engineering Fair


Meredith Perry

At 23, she is the CEO of uBeam which is about to launch a device that beams electricity through the air to charge portable electronics wirelessly


Eesha Khare

At the age of 18 created a device that could charge a mobile phone in 30 seconds. Won the 2013 Intel Foundation Young Scientist Award. Now a Harvard student.


Robert Pera

By 35 he created a public company worth $3B that is bringing internet access to the developing world through wimax wifi networks

Innovation

HErE ARE FIVE KEYS TO INNOVATION

Innovation

Clearly DEFINE THE PROBLEM youre trying To solve

1

Innovation

2 THROW OUT AS MANY CONSTRAINTS TO YOUR THINKING AS POSSIBLE

Innovation

3 ENSURE THOSE WORKING TO SOLVE THE PROBLEM ARE DEEPLY PASSIONATE ABOUT SOLVING THE PROBLEM

Innovation

4 BRAINSTORM IN SMALL GROUPS Of 3-6 individuals with Diverse perspectives

DESIGN THINKING

Design thinking is one of the Best processes for

innovation

The five step design thinking process

Empathize

Define Prototype

Ideate

Test

Key Materials needed for design thinking exericses

1. Post-its of different sizes/colors 2. Lots + Lots of whiteboard space 3. Whiteboard markers 4. Pens 5. timer

Step 1: Empathize

Great products start with empathy for the customer And deep problem understanding

Step 1: Empathize

The best way to have empathy for your customer is to solve a problem

you personally have

Step 1: Empathize

If its not a problem you personally have spend lots of time in the homes and offices

of your customers or users

Step 2: DEFINE

Define the problem very clearly.

The problem the customer is facing that we are solving is

_______________________________.

!

Step 2: DEFINE

Define the human impact of solving the problem

If we solve this problem, what specific differences will it make

in the lives of our customers/users: ____________________________.

!

Step 3: IDEATE

Ensure those working with you to solve the problem are deeply passionate about

solving the problem!

Step 3: IDEATE

Brainstorm with a group of 3-6 people with

Diverse BACKGROUNDS & skillsets

Step 3: IDEATE

Initially, throw out all Constraints to your thinking Enter a No

Judgment zone

Step 3: IDEATE

Brainstorm individually on post-its in 5-10 minute timed sessions

before sharing

Step 3: IDEATE

Begin by Brainstorm individually on post-its in 5-10 minute timed sessions

before sharing

Step 3: IDEATE

Capture all ideas visually on post-it notes stuck on whiteboards So they are easily

movable

Step 3: IDEATE

Never criticize an idea in the Ideation phase The crazy stuff can lead to

breakthroughs

Step 3: IDEATE

After PUTTING UP ALL THE ideas on the wall refine down to the best by giving each person a few votes

using small post-its

Step 4: Prototype

Quickly prototype 1-3 possible Working solutions to the problem

Paper sketches or wireframes are often sufficient here

If its a physical product, use a workshop to create a basic version

Step 4: Prototype

Simpler prototypes are OFTEN BEST FOR ALLOWING

RAPID learning and iteration

Step 5: TEST

Now test the prototypes with Actual potential customers

See what they think Then make it better

Step 5: TEST

Keep iterating designs & Improving Until you can convince customers

To pay for what youve built

THE LEAN STARTUP PROCESS

THE LEAN STARTUP PROCESS IS ANOTHER INNOVATION PROCESS

Designed to lead to QUICK LEARNINGS & RESULTS

THE LEAN STARTUP PROCESS

The benefits of the leAn startup method

1.Fast testing + learning 2.Low cost 3.Fail fast and pivot quickly

THE downsides of the LEAN STARTUP PROCESS

1. Often doesnt allocate enough time to the brainstorming process (go straight from idea to

build)

2. Can focus too much on finding anything that customers will pay for rather than solving a

problem that matters in the world

Lessons from my 20s

VENTURE CAPITAL

PART II, Section 7

Venture Capital

IF POSSIBLE TRY TO GET AS FAR AS YOU CAN WITHOUT RAISING OUTSIDE CAPITAL

Venture Capital

IN THE BEGINNING DO WHATEVER IT TAKES

TO KEEP COSTS LOW

Venture Capital

In a b2b business Focus on getting Revenue from customers

Venture Capital

Youll have a higher Chance of success if you Get paying customers before raising outside $$

(or at least 10,000+ users)

Venture Capital

The biggest mistake Entrepreneurs make Is raising too much Before they are ready

Venture Capital

AT ICONTACT WE BOOTSTRAPPED FOR THE FIRST 3 years

Venture Capital

AT CONNECT WE BOOTSTRAPPED FOR THE FIRST 2 years

What is bootstrapping

Bootstrapping means Operating without Raising Outside capital


Most companies should Bootstrap for 12-36 mos before they are ready For outside capital


If you dont have a product Yet, you definitely should Not be raising VENTURE capital

(except!in!very!capital!intensive!businesses!like!drug!discovery)!

Test demand before raising money by creating an inexpensive prototype and then improve until customers love your product

Venture Capital

WHERE TO LOOK DEPENDS ON HOW MUCH YOU NEED AND HOW FAR ALONG YOU ARE

The different types of capital available by stage $100m

Yes

Yes

Yes Yes

Yes Yes

Yes Yes Yes Yes

Yes Yes Yes

Yes Yes Yes

Yes Yes

Yes Yes

Yes

Yes

Yes

Angel rounds

angellist Is the best place To find early stage Angel investors

The power of angellist

In june 2008 Connect raised $2.8M From investors on angellist Like jason calacanis, brad feld, And scot and cyan banister

The power of angellist

Angels often act in packs So it is useful to secure a Lead Angel investor Who will set the terms Before reaching out widely

Syndicates

Top angels have packs of Other angels who follow them And invest in what they invest in

These are called syndicates

Venture Capital

fundable Is another good place To find early stage Angel investors

entrepreneurship!

Convertible notes

A convertible note Is a loan that converts Into equity at your Next raise usually at a discount To the future price

Convertible notes

Most early stage seed Deals in silicon valley Are now done as Convertible notes

The Key Terms of a Convertible note

Amount invested Discount rate Valuation cap Pro rata rights Interest rate

Venture Capital

In a b2b business AVOID RAISING MORE THAN 10x your current ANNUALIZED REVENUE

Venture Capital

So if your current Annual revenue run rate Is $500k Raise up to $5M

Venture Capital

if your current Annual revenue run rate Is just $30k

Focus on increasing sales Not raising capital

Venture Capital

If you raise too much Your monthly expenses Will get too far ahead Of your revenue

Venture Capital

And when monthly expenses ExceeD revenue by too much You go bankrupt

Raising an angel round

For b2b software companies The right

Time To RAISE An angel round is when

You have a working product AND

At least 5 paying customers

Raising an angel round

For b2C applications The right

Time To RAISE An angel round is when

You have a working product AND

At least 1000 daily users

Your negotiating power is based on

LEVEL OF NEED FOR THE MONEY YOUR EXPERIENCE YOUR TEAM PRODUCT & TECHnOLOGY COMPETITION OTHER TERM SHEETS QUALITY OF YOUR ADVISORS

The most important investment terms

VALUATION OPTION POOL SIZE LIQUIDATION PREFERENCES

FOUNDER REVESTING PREFERRED VETO RIGHTS TYPE OF PREFERRED STOCK

BOARD SEATS

" THE HIGHEST VALUATION IsnT ALWAYS BEST

Factors in Selecting Your INvestors

CHEMISTRY WITH THE PARTNER OPERATIONAL EXPERIENCE CURRENT PORTFOLIO ALIGNMENT PARTNER/FIRM EXIT RESULTS EXECUTIVE RECRUITING ABILITY TERMS OF INVESTMENT

TECH PRE-REVENUE VALUATION GUIDELINES

CEO Past exits TEAM EXPERIENCE NUMBER OF USERS NUMBER OF ENGINEERS LOCATION OF COMPANY

X2 if youre in silicon valley

$1m to $25m PMV depending on Factors like

Pre-Revenue Valuation example

b2c tech COMPANY RUN BY FIRST TIME ENTREPRENEUR

with 1 engineer

Pre-Money Valuation: $1m-$3m


b2c tech COMPANY RUN BY FIRST TIME ENTREPRENEURS

who have been through y combinator with a good

idea AND 2 engineers

Pre-Money Valuation: $5M-$10M


INCORPORATED tech COMPANY run By experienced CEO

with 10 years c-level experience, $100m prior Exit,

& 5 engineers

Pre-Money Valuation: $10m-$25m

Raise a Seed round or series A?

Typical Seed Round Company Typical Series A Company

Employees 1-10 10-50

Time since incorporation 6 months-2 years 2-5 years

Traction if consumer Working product, pre-launch up to 100,000 Daily Active Users

Over 100,000 DAUs

Traction if enterprise $0 to $50k/monthly revenue $50k to $500k in monthly revenue

Valuation range in Silicon Valley

$3M to $15M $10M to $60M

Valuation range elsewhere

$1M to $7M $5M to $30M

post-Revenue Valuation GUIDELINES

AS YOU GO ABOUT FUNDRAISING

YOU USUALLY WANT TO CREATE

A COMPETITIVE PROCESS


BUILD a series A FUNDING PROCESS TO ENSURE YOU RECEIVE

MULTIPLE TERM SHEETS


RAISE MONEY only from SMART PEOPLE YOU REALLY LIKE YouLL BE MARRIED to Them FOR THE NEXT

3-10 years

Best venture funds in my opinion

Andressen horowitz Sequoia Kleiner perkins accel Benchmark greylock Nea Bessemer Google ventures Founders fund


WAIT TO RAISE your series a UNTIL You HAVE PROVEN MATHEMATICALLY THAT X DOLLARS SPENT BRINGS Y DOLLARS BACK

Ryans three rules of entrepreneurship

1. Create products customers love (by overinvesting in UX testing!)

2. Spend 1/3rd of your time recruiting excellent people

3. Dont raise venture capital until you have proven customer demand

Timing of icontact fundraises

Date Capital raisedAnnual

revenueCapital source Capital type

Pre-money valuation

Post-money valuation

Jun 2003 $5k $5k Friend Loan N/A

N/A

May 2006 $500k $1.5m IDEA Fund Seed stage $16m $16.5m

Jun 2007 $5.3m $5.5m Updata Series A $27m $32.3m

Aug 2010 $25m $38m JMI Equity Series B $100m $125m

Feb 2012 N/A $49M Vocus Sale of Company

$170M N/A

Lessons from my 20s

marketing PART II, Section 8

What is a brand?

A BRAND IS SIMPLY THE AGGREGATEd SUM TOTAL OF EVERY Human BEINGS EXPERIENCE WITH YOUR COMPANY & PRODUCTs

A good brand name

1 or 2 syllables

Easily spellable

Easily pronounceable

marketing

GOOD MARKETING IS JUST GOOD STORYTELLING ACROSS MULTIPLE MEDIA IN A TRACKABLE AND FINANCIALLY SCALABLE MANNER

marketing

MARKETING IS GENERATING AN INTERESTED LEAD SALES IS TURNING THE LEAD INTO A CUSTOMER And ACCOUNT MANAGEMENT IS TURNING A CUSTOMER INTO

A LIFETIME EVANGELIZER

marketing

IN TODAYs WORLD MARKETING STARTS WITH your PRODUCT

marketing

YOU CanT SUCCEED MARKETING A CRAPPY PRODUCT FOR LONG

marketing

SO IF Youre marketing A CRAPPY PRODUCT STOP

marketing

AND PUT YOUR FUNDS INTO BUILDING A GREAT PRODUCT

marketing

THEN WHEN YOU HAVE A GREAT PRODUCT START STORYTELLING

The 6 keys to success with marketing

1. AMAZING WORD OF MOUTH FROM A GREAT PRODUCT 2. KNOWING THE LIFETIME VALUE OF A CUSTOMER 3. A TRACKING SYSTEM THAT CAN TELL YOU COST PER LEAD,

cost per customer/user, and CONVERSION RATE PER CHANNEL

4. CONSTANT TESTING OF NEW CHANNELS, CREATIVE, AND FUNNEL PROCESSES

5. GREAT STORYTELLING

Always be testing

10% of your MONTHLY Advertising budget Should be spent on TESTING NEW CHANNELS

Know your CAC

You dont KNOW YOUR CUSTOMER ACQUISITION COST? ARE YOU SERIOUS?

Know your LTV

You dont KNOW YOUR Customer LTV? ARE YOU SERIOUS?

Know your LTV

Monthly Revenue Average Customer Life Lifetime Revenue

What You Can Spend to Acquire a New Customer

Recurring Customer $50 48 Months $2400 Up to $800

ROUGH EXAMPLE DETERMINING WHAT YOU CAN SPEND TO ACQUIRE A NEW RECURRING CUSTomER

Know your LTV

Average Purchase Price

Average Number of Purchases Within 3

Years

3 Year Revenue Estimate

What You Can Spend to Acquire a New

Customer

Non-recurring Billed Customer $50 6 $300 Up to $100

ANOTHER ROUGH EXAMPLE DETERMINING WHAT YOU CAN SPEND TO ACQUIRE A NEW CUSTomER

Know your LTV

SCALE YOUR AD BUDGET SCIENTIFICALLY BY TRACKING LEAD ACQUSITION COST

& CONVERSION RATE BY ADVERTISING CHANNEL

Online Marketing channels

SEO GOOGLE, YAHOO, BING

PPC - GOOGLE Adwords / BING ADCENTER

SOCIAL PRESENCE FACEBOoK, TWITTER, youTUBE

SOCIAL ADS FACEBOOK, TWITTER, Youtube ADS

DISPLAY BANNER ADVERTISING

AFFILIATES CJ & LINKSHARE

Review SITES YELP, CITYSEARCH, GOOGLE LOCAL

DAILY DEALS GROUPon & LIVINGSOCIAL

EMAIL FOLLOWUP iCOntact & MAILCHIMP

MOBILE advertising channels

Facebook CPI Ads

Twitter CPI Ads

TapJoy

ChartBoost

Vungle

Fiksu

nativex

Adcolony

Fyber

Flurry

APPIA

Admob

Offline advertising channels

TELEVISION

PRINT ADVERTISING

RADIO

YELLOW PAGES

buses

DIRECT MAIL

TRADESHOWS

EVENT SPONSORSHIPS

BILLBOARDS

CAMPUS REPS

Offline advertising channels

THE KEY IS TO TEST ALL OF THE CHANNELS AND TRACK THE ACTUAL RESULTS

FROM EACH ONE

To grow your sales & Acquire more customers

CALCULATE CPL & COnVERSION RATE BY CHANNEL DETERMINE WHAT YOU CAN PAY PER NEW CUSTOMER TEST NEW ADVERTISING CHANNELS SCIENTIFICALLY CREATE A PREMIUM VERSION OF YOUR PRODUCt TEST DOUBLING YOUR PRICE AND SEE WHAT HAPPENS GET MORE AFFILIATES/DISTRIBUTORS OPEN UP MORE SALES OFFICES OPEN UP MORE RETAIL LOCATIONS BUILD ADDITIONAL PRODUCTS HIRE MORE SALES PEOPLE HIRE SOMEONE TO SELL MORE TO EXISTING CUSTOMERS RAISe CAPITAL AND EXPAND YOUR ADVERTISING

Why most startups fail

1. Co-founder issues 2. Product doesnt solve a real problem 3. Never charge for product 4. Poor sales and marketing

Icontact revenue growth

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011

Icontact customer growth

0

10000

20000

30000

40000

50000

60000

70000

2003 2004 2005 2006 2007 2008 2009 2010 2011

Connect User Growth six months after launch

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14

Primary icontact customer acquisition channels

1. Google AdWords 2. Facebook Ads 3. Affiliate Program 4. Banner Ads

Google adwords

Facebook Ads

Doubleclick Ad manager

Commission junction

Track your customers by channel

Set up Google Analytics so you can

calculate your customer acquisition

cost by marketing channel

Google Analytics

Track your iusers by channel

Set up Mobile App Tracking (MAT)

so you can calculate your user

acquisition cost by mobile ad network

Unit economics

It is extremely important to

Understand the unit economics

Of your business

Understanding Unit economics

Unit economics include the lifetime value of

Each new customer to your business (LTV)

As well as the customer acquisition cost (CAC)

A definition of lifetime value

Lifetime value (n)

How much a customer is worth to you

in revenue throughout their time as a customer with your company.

Icontact ltv example

Avg. Monthly Rev Per Customer = $50 Avg. Monthly Churn = 3.3% Avg. Customer Life = 30 Months

LTV = ? 50 x 33 = $1500

How much to spend on marketing

You can spend about 1/3rd of your LTV in sales and

marketing expenses to acquire a customer

If LTV = $1500

$500 Max CAC =

Example of calculating cac

=

CAC = Total Sales & Marketing Expenses

Total Customers Acquired in a Month

$2,000,000 4000

$500

=

Sales teams

When your product or service costs over over $500/mo, or $5k total.

When should you create a sales team?

Lessons from my 20s

CREATING systems

PART II, Section 9

A quote

Achievement comes to someone when he is able to

do great things for himself. Success comes when he

empowers followers to do great things with him.

Significance comes when he develops leaders to do

great things for him. But legacy is created only when

a person puts his organization into the position to do

great things without him.-JOHN C. MAXWELL

Systems

SYSTEMS ARE A COLLECTION OF PROCESSES THAT RUN

WITHOUT YOU

Examples of Systems

PERFORMANCE REVIEWS OFFICE FOOD DELIVERY NEW EMPLOYEE TRAINING DOWNTIME NOTIFICATION OPERATIONS REVIEWS PRODUCT FEEDBACK PURCHASE ORDERS FINANCIAL PLANNING PAYROLL CLIENT SATISFACTION VACATION REQUESTS

MARKETING TESTING RFP MANAGEMENT EXPENSE REIMBURSEMENT HARDWARE SETUP TAX DOCUMENTATION LEGAL CONTRACTS 360 FEEDBACK JOB DESCRIPTIONS EXTERNAL COMMUNICATIONS INTERNAL COMMUNCIATIONS ACCOUNTING

Systems

AFTER THE FIRST two years Your success is DETERMINED MORE BY THE PEOPLE YOU HIRE THAN BY YOU SO STOP TRYING TO DO

EVERYTHING

Systems

FOR A BASIC ACCOUNTING SYSTEM WE USE QUICKBOOKS ONLINE

Systems

BE SURE TO TRACK YOUR BOOKS ACCURATELY FROM THE BEGINNING

Systems

AND ALWAYS SEPARATE PERSONAL AND BUSINESS EXPENSES

Systems

Investors dont Invest in systems

That go home at night!

Systems

To create a great Organization You must Build a system to CULTIVATE GREATNESS In others

systems

ONCE YOU GET pAST 20 EMPLOYEES CONDUCT ANNUAL ONLINE 360 Reviews

systems

MAKE SURE YOUR INCENTIVE STRUCTURE incentivizes THE RIGHT GOALS

Business lessons Learned

GIVE IMMEDIATE AND SPECIFIC FEEDBACK

MORE OFTEN

Lessons from my 20s

Building a team

PART II, Section 10

Building a team

Make sure youre PASSIONATE ABOUT WHAT YOU ARE LEADING YOUR TEAM TOWARD ACCOMPLISHING. IF YouRE NOT PASSIONATE ABOUT ACHIEVING THIS GOAL YOU ARE LEADING THE

WRONG ORGANIZATION

Building a team

SURROUND YOURSELF WITH PEOPLE SMARTER THAN YOURSELF PEOPLE WHO HAVE HIGH INTEGRITY AND PEOPLE PASSIONATE ABOUT ACHIEVING THE SAME GOAL YOU

ARE PASSIONATE ABOUT

Building a team

ONLY HIRE SOMEONE AS A DIRECT REPORT IF HE OR SHE CAN DO THEIR JOB 2x BETTER THAN

YOU COULD

Building a team

NEVER HAVE MORE THAN SEVEN DIRECT REPORTS

SIX if you have to manage the Board of Directors as well

Building a team

MAKE SURE YOU AND YOUR TEAM ARE COMPLETELY CLEAR ON WHAT YOU ARE TRYING TO ACHIEVE, BY WHEN, the definition of success, and why WHAT youre trying to achieve

MATTERS IN THE WORLD

Many leaders HAVE A VISION But dont COMMUNICATE IT

Building a team

Dont make this mistake

Building a team

PAINT A CLEAR VISION AND COMMUNICATE IT SUCCINTLY, VISUALLY, BROADlY, and REPEATEDLY. KNOW WHERE YOU ARE GOING AND THEN

LEAD PEOPLE THERE

Building a team

YOUR JOB IS TO DEFINE OBJECTIVE SUCCESS FOR EACH OF YOUR DIRECT REPORTS AND THEIR JOB IS TO DEFINE SUCCESS FOR EACH OF THEIR

DIRECT REPORTS

Building a team

INTEGRATE SUCCESS FOR THE INDIVIDUAL TOWARD HIS OR HER OWN LIFE GOALS WITH SUCCESS FOR THE PROJECT

AND THE COMPANY

Building a team

DEFINE SUCCESS QUANTITATIVELY

Real-time MONITOR THEN TRACK IT ON A

Visible to all team members

Building a team

MAKE SURE YOUR TEAM KNOWS THAT TRUE LEADERS

MAKE A COMMITMENT TO ENSURING THAT THE PERSON

WHO FOLLOWS THEM IS BETTER THAN THEY WERE

ASK EACH TEAM MEMBER TO IDENTIFY & TRAIN THEIR

Replacement before LEAVING and in exchange

YOU WILL NEVER SURPRISE THEM WITH TERMINATION

Building a team

ASK YOUR TEAM TO NEVER LET SOMETHING IMPORTANT

GO UNSAID

LISTEN & proACTIVELY SEEK OUT INFORMATION FROM YOUR TEAM

Building a team

GOOD LEADERS SEEK OUT & ASK FOR

UNPOPULAR OPINIONS FROM THEIR TEAM

Building a team

ALWAYS TAKE THE TIME TO EXPLAIN THE MENTAL MATH BEHIND YOUR DECISIONS

Building a team

IF YOU WANT TO ACHIVE A DIFFICULT GOAL CREATE An INCENTIVE PRIZE WITH CLEAR GUIDELINES AND PUBLICIZE IT

(Why hackathons & XPRIZE work so well)

Building a team

EVERY MEMBER OF YOUR TEAM

SHOULD HAVE A SIGNIFICANT PORTION OF THEIR COMPENSATION TIED TO pre-DEFINED COMPANY SUCCESS METRICS

Building a team

TREAT your PEOPLE WITH RESPECT AT ALL TIMES

Building a team

WORK HARD & ALONGSIDE YOUR TEAM

Building a team

DONt be

TOO SERIOUS (Life is short. Have fun with what youre doing)

Building a team

MAKE SURE EVERYONE KNOWS THEY CAN TALK TO YOU

ANYTIME

Building a team

BUILD CARING RELATIONSHIPS WITH YOUR DIRECT REPORTS

Building a team

COMMEND MORE THAN

YOU CRITICIZE

Building a team

CONsCIOUSLY BUILD AN AMAZING CULTURE

Building a team

create an environment in which Each team Member can do the Most Inspired work

Of their lives

Building a team

A startup ceos role includes

VISION STRATEGY PRODUCT CREATION FINANCING MEDIA RELATIONS

CULTURE LEADERSHIP TEAM RECRUITING OPERATIONS BOARD RELATIONS

The role of the ceo

As you grow, youll hire experienced

People for each of the major roles

Like sales, marketing, recruiting, HR,

engineering, design, operations,

product & customer support

You can recruit via

Your c-level team SHOULD BE EXCLUSIVELY

MADE UP OF JEDIS

The role of the later stage ceo

1. Set strategy & vision 2. Set production direction 3. Recruit & lead senior team 4. Oversee resource allocation 5. Communicate to stakeholders 6. Build a great culture

The role of the ceo

Your role as CEO is not to micromanage

Its to hire people more experienced

than you in their areas and provide the

big picture

GREAT CEOS are good at

Public speaking

Connecting deeply with team

Sharing their passion

Raising funding

Understanding customer needs

My Favorite interview questions to ask

WHAT ARE YOU PASSIONATE ABOUT? TALK ABOUT SOME OF THE EXPERIENCES IN LIFE THAT HAVE BEEN VERY CHALLENGING WHAT CHANGE DO YOU WANT TO MAKE IN THE WORLD IN YOUR LIFETIME? IF YOU MET AN ALIEN, HOW WOULD YOU DESCRIBE YOURSELF? TELL ME ABOUT YOUR FAILURES TELL ME ABOUT THE GOALS YOU HAVE

You can recruit via

EXISTING EMPLOYEE REFERRALS COMPETITORS linkedin Hired/angelList YOUR INVESTORs CONTACTS CORPORATE RECRUITERS PRESS PICKUPS

The best team

THE BEST TEAM MEMBERS ARE OFTEN THE ONES WHO ARE CURRENTLY

EMPLOYED

Let people go who arent working out

IF SOMEONE ISNT WORKING OUT LET THEM GO AND FREE THEM UP TO DO SOMETHING THEY

ARE GOOD AT

Building connection & Familiarity within your team

HERE ARE 4 retreat Exercises that are Worthwhile to do with

Your team

Team Retreat Exercises

Exercise 1: Inner and outer story

ASK each TEAM member TO share:

1. 120 seconds - ACCOMPLISHMENTS and resume (OUTER STORY) 2. 240 seconds YOUR HIDDEN INNER STORY

Deep down inside what do you worry about? What are you insecure about? WHAT HAVE YOU STRUGGLED WITH MOST IN THE LAST 2 years? What are you afraid of BEHIND THE FAADE?

FOR A SUCCESSFUL EXERCISE, BE SURE TO TAKE THE TIME TO Create a setting of confidentiality and openness to being vulnerable

1. HAVE EACH team member SPEND 5 minutes to think about and then WRITE DOWN in NO MORE THAN 10 words THE ANSWER TO: what change do you want to make in the world WITH YOUR LIFE?

2. Then have each person share their 1 sentence with the group 3. THEN have EACH PERSON ONE AT A TIME STAND UP AND ANSWER THE

QUESTION WHY DO YOU DO WHAT YOU DO? For 4 minutes For a successful exercise If the speaker finishes talking before the 4 minutes is up, ask them the question again

and have them answer it again Dont allow any other question to be asked during the 4 minutes

Exercise 2: the change you wish to make

1. HAVE EACH PERSON WRITE DOWN 4 pivotal moments in their life

2. HAVE EACH PERSON SHARE THE 4 pivotal moments and how they handled them and dealt with them with the group

FOR A SUCCESSFUL EXERCISE CREATE AN ENVIRONMENT OF CARE AND CONFIDENTIALITY

Exercise 3: Pivotal moments

1. PAIR OFF INTO TWOs IN A QUIET LOCATION 2. HAVE ONE PERSON TAKE 5 minutes to share the story of the

most difficult and vulnerable MOMENT IN THEIR LIFE 3. HAVE THE PARTNER ASK EXACTLY 3 follow-up questions 4. THEN SWITCH ROLES FOR A SUCCESSFUL EXERCISE ALLOT AT LEAST 30 minutes for the exercise as the exercise can

bring up difficult emotional situations that require time to process BEFORE THE SESSION CONTINUES

Exercise 4: Crucible moments

Lessons from my 20s

Strategy & Execution

PART II, Section 11

strategy

Your strategy should be TO BE THE BEST in the world AT ONE THING

So CHOOSE CAREFULLY

strategy

STRATEGY IS THE COLLECTION OF UNIQUE PROCESSES THAT WORK IN UNISON TO ENABLE YOUR FIRM TO BE THE BEST IN THE WORLD

AT ONE THING

strategy

STRATEGY IS ABOUT TRADEOFFS

YOU MUST CHOOSE WHAT NOT TO DO

strategy

STRATEGY INVOLVES CHOOSING TO PERFORM ACTIVITIES DIFFERENTLY

THAN others

strategy

NEVER CREATE STRATEGY IN A ROOM OF MORE THAN FIVE PEOPLE

CEO Head of Product Head of Technology Head of Sales Head of Service Head of Marketing Head of OPERATIONS

CHOOSE FIVE

At your quarterly Planning sessions with your senior team Update your one-page

strategic plan

See an example at:bit.ly/1pagestrategy

Operational execution


BUILD CONSENSUS WITH A SMALL CORE BEFORE YOU SHARE WIDELY


ONCE YOU ALIGN THE CORE ALIGN THE NEXT LAYER THEN THE NEXT

THEN THE NEXT


WAY TOO MUCH TIME IS SPENT in MEETINGS

At your company ADOPT a MAKERS SCHEDULE


See: www.paulgraham.com/makersschedule.html

Engineers and creatives Need at least 4 hour blocks Of Uninterrupted time To get anything done

(so stop overscheduling them in meetings)


At most Have one daily standup meeting In which you actually stand

So it takes less than 15 mins


Once your company

gets beyond 30 employees

hire a COO to keep the trains

running on time and to focus on cross

department projects & metrics


All creative or technical CEOs

Need a really good

Ops Person


Create numerical goals in advance

with each of your team members

Hold them accountable to the goals

not to methodology!


Hold a quarterly 2-day planning sessions each quarter and an annual

4 day team retreat


ONCE YOU AND YOUR TEAM HAVE YOUR PLAN COMMUNICATE IT in A MEMORABLE WAY WITH VISUAL AND NUMERICAL REINFORCEMENT TO THE FULL TEAM THEN FOCUS ON EXECUTING WITH FANATICal DISCIPLINE & RECOMMUNICATE AND REINFORCE AT LEAST

MONTHLY



HOLD PEOPLE ACCOUNTABLE TO PRE-DEFINED MEASURABLE RESULTS NOT TO THEIR METHODOLOGy AS LONG AS THEY ARE TREATING

PEOPLE WELL


ONCE YOURE CLEAR ON STRATEGY DONT SKIMP ON OPERATIONALIZING THE STRATEGY PLAN TEAMS IN LARGER COMPANIES GET OFF TRACK HERE FIGURE OUT WHAT RESOURCES ARE NEEDED TO ACHIEVE TEAM GOALS AND FIGURE OUT THE METRICS THAT ENABLE THE FOCUS NECESSARY AND TRACK

THEM VISUALLY

Track your key

metrics visibly on a

real time dashboard



SHOW results for up to 5 COMPANY-wide goals IN REAL TIME AND ON A MOUNTED AND VISIBLE MONITOR MAKE YOUR RESULTS AND KPIS VISIBLE AND CLEAR BE TRANSPARENT to your full company and

MEASURE what MATTERS


CONSTANTLY be TESTing. As jim collins says FIRE BULLETS TO FIND WHAT WORKS SEE WHAT WORKS THEN FIRE CANNONBALLS

When to hire key team members

Office Manager/EA 10 employees

CFO 20 employees

COO 30 employees

Dir of HR 40 employees


PART OF THE CEOs JOB IS TO FIND & HIRE PEOPLE WHO CAN DO THEIR ROLES MUCH BETTER THAN THE CEO COULD


WHEN YOU SEE SOMEONE DOING A GOOD JOB TELL THEM!


THERE IS GREAT POWER IN DEADLINES CREATE SOME!

What a CEO Does in Year one

Team Size Key Actions 1-3 Its all you to start.

Incorporate and get an EIN. Get a bank account. Find a business partner with a complementary skillset if needed. Make sure you have $25,000 saved up to get started Focus on product development and getting something to market

that solves a customer need.

Create something of value to others and sell, sell, sell! Get customer feedback and use it to make your product better.

What a CEO Does in year two

Team Size Key Actions

4-9 Do all you can to enable the company to survive Build an Advisory Board Hire your first employees You should be in charge of product or sales or both Set up a basic low cost office space Outsource your payroll

What a CEO Does in year THREE

Team Size CEO Role

10-25 Hire an outside bookkeeper/accountant to produce monthly financial statements by the

20th of the following month Put real time visible dashboards in place Everyone wont report to you anymore. Start putting managers in place. Figure out your unit economics and consider raising funding to invest in growth. Hold a weekly meeting with either the whole company or all the key operational individuals Hire people more experienced than yourself for the role you are hiring for, even if you have

to wait a bit longer to be able to afford them. Keep the organization focused on selling and growing. Put in place an employee handbook Define your values Define your mission and vision Put in place a formal performance review process and ensure a manager conversation and

performance review is completed at least every 12 months, including 360 reviews in which peers and staff review their managers.

Set up an options plan Install a CRM system

What a CEO Does in year Four


26-50 Start a weekly meeting with your Senior Leadership Team, Leadership Team, and Managers Start a weekly meeting with just your Senior Leadership Team Hire a COO, Controller or CFO, a Director of Human Resources, and an Administrative

Assistant. Make sure your Controller/CFO begins providing monthly accurate financial statements

to you by the 20th of the following month in GAAP format and Managerial format Document your systems and processes in an employee handbook. Set KPIs and have your team report on them weekly. Put in place documented incentive compensation systems. Think about creating systems to ease internal employee communication, like internal wikis,

company meetings, external events, and retreats. Start using a One Page Strategic Plan with a quarterly theme. Have formal annual planning meetings to set or communicate both strategy and budgets

for the upcoming year. Start investing consciously in shaping your company culture. Start investing consciously in managerial and leadership development courses for your

managers and future managers. Hire an Auditor to audit your annual financial statements

What a CEO Does in year Five and six


51-200 Define your companys hedgehog concept (what you can be the best in the world at, what

youre passionate about, what drives your economic engine?) Implement The Five Dysfunctions of a Team Material throughout the organization Launch a formal corporate social responsibility program Start thinking about what new markets your organization can go into the future and figure

out what your next product cycle will be Think about what the next big thing will be in your broad industry and position your

company to be the leader in it Start top-grading your people and letting go of the bottom 10-20% annually Constantly ask yourself what will be driving revenue growth most in 24 months? Put in place a system that will enable you and your leaders to know everyones name Launch an HRIS to automate your human resources functions like talent recruitment,

performance management, compensation, and employee training. Implement the Service Profit Chain from Peak Switch to a Big 4 Auditor Launch a Corporate Development Department Hire an Investment Bank If Needed to Evaluate M&A opportunities

What a CEO Does in year SEVEN AND EIGHT

Team Size CEO Role 200+ Consider scaling yourself by separating the organization into

different business units with GMs or Presidents

Your role is now divided into five parts, described below. Set Strategy and Vision Manage the Senior Team Communicate with Stakeholders Oversee Resource Allocation Build the Culture

Recommend Books on Execution

1. Good to Great by Jim Collins 2. Built to Last by jim collins 3. Execution by Ram Charan 4. Peak by Chip Conley 5. Mastering the Rockefeller Habits by Verne Harnish 6. The Future of Management by Gary Hamel

Lessons from my 20s

the steps to get started

PART II, Section 12

100 Steps in review

1. FIGURE OUT WHAT CHANGE you WANT TO MAKE IN THE WORLD 2. BEGIN RESEARCHING THE INDUSTRY AND COMPETITORs 3. DETERMINE HOW TO CREATE YOUR PRODUCT 4. TALK TO POTENTIAL CUSTOMERS FOR FEEDBACK 5. COME UP WITH NAME FOR YOUR COMPANY/PRODUCT

100 Steps in review

6. BUILD YOUR PITCH DECK 7. CREATE PRO FORMA FINANCIAL PROJECTIONS 8. DETERMINE CAPITAL NECESSARY TO GET TO CASH

FLOW POSITIVE

9. GET FEEDBACK ON PITCH DECK FROM ADVISORS 10.FIND A CO-FOUNDER IF NEEDED

100 Steps in review

11. SELECT A QUALITY CORPORATE LAW FIRM IN YOUR AREA 12. INCORPORATE & OBTAIN AN EIN 13. OPEN A COMPANY BANK ACCOUNT 14. TALK TO YOUR ATTORNEY ABOUT MAKING an 83b election 15. BUILD BASIC PRODUCT PROTOTYPE/Minimum viable

product

100 Steps in review

16. CREATE EMPLOYEE AGREEMeNTS FOR EVERYONE 17. CREATE CONFIDENTIALITY AGREEMENTS FOR

EVERYONE

18. HOLD INITIAL BOARD OF DIRECTORS MEETING 19. CREATE YOUR RSU/STOck options plan 20. ISSUE STOCK CERTIFICATES

100 Steps in review

21. FUND YOUR BANK ACCOUNT AND ORDER CHECKS 22. DETERMINE IF YOU NEED OUTSIDE CAPITAL TO

START

23. RAISE ANY INITIAL STARTUp CAPITAL NEEDED 24. GET A COMPANY DEBIT/CREDIT CARD 25. SET UP YOUR ACCOUNTING SOFTWARE

100 Steps in review

26. SELECT YOUR PAYROLL PROVIDER 27. TRADEMARK THE NAME(S) of your company /

Product

28. DESIGN YOUR LOGO 29. CREATE BUSINESS CARDS 30. FIND OFFICE SPACE TO WORK OUT OF

100 Steps in review

31.FURNISH YOUR OFFICE AS NEEDED 32.PURCHASE ANY SOFTWARE/HARDWARE YOU WILL

NEED

33.GET WIRELESS INTERNET ACCESS SETUP AS NEEDED 34.OBTAIN A UPC IF YOUR PRODUCT WILL BE SOLD IN

STORES

35.DESIGN LABELING/PACKAGING IF NECESSARY

100 Steps in review

36. FINISH PRODUCT ALpHa/PROTOTYPE 37. GET INITIAL USER/CUSTOMER FEEDBACK 38. ORDER INITIAL INVENTORY OF PRODUCTS IF NEEDED 39. REGISTER YOUR DOMAIN NAME 40. DESIGN YOUR COMPANY WEB SITE

100 Steps in review

41. INSTALL GOOGLE ANALYTICS ON YOUR WEB SITE 42. IF NEEDED, INSTALL SHOPPING CART ON WEB SITE 43. APPLY FOR MERCHANT ACCOUNT TO ACCEPT CREDIT CARDS 44. SIGN UP FOR EMAIL LIST TOOL like icontact or

mailchimp

45. Optimize your web site for search engines & ADD BLOG

100 Steps in review

46. INSTALL A CRM SYSTEM 47. HIRE INITIAL STAFF AS NEEDED 48. CREATE COMPANY VALUES & MISSION STATEMENT 49. ANNOUNCE PROdUCT LAUNCH TO LOCAL/RELEVENT

MEDIA

50. HOLD LAUNCH EVENT & START SELLING

100 Steps in review

51. HIRE A TEAM TO FULFILL ORDERS & PROVIDE CUSTOMER SERVICE

52. START An AFFILIATE OR DISTRIBUTOR PROGRAM 53. BUILD UP AFFILIATES & DISTRIBUTORS 54. SET UP An AD TRACKING SYSTEM 55. TRY CPC/CPI/CPA ADVERTiSING WITH TEST BUDGET

100 Steps in review

56. GET RESULTS FROM THIS ADVERTISING 57. OPTIMIZE AND SCALE AS NEEDED 58. DETERMINE COST OF ACQUISITION A LEAD FOR EACH

CHANNEL

59. DETERMINE CONVERSION RATE FOR EACH CHANNEL 60. DETERMINE LIFETIME VALUE OF A CUSTOMER

100 Steps in review

61. Test CPC/CPI/CPA Ads with bigger budget now that you know LTV

62. TEST SOCIAL ADS & DISPLAY ADS & CALCLATE ROI BY CHANNEL 63. SCALE ADVERTISING UNTIL MARGINAL COST = MARGINAL RETURN 64. OPTIMIZE ADVERTISING to bring down CAC 65. COLLECT TESTIMONIALS FROM INITIAL USERS/CUSTOMERS

100 Steps in review

66. CREATE SOCIAL WORD OF MOUTH FOR YOUR PRODUCT 67. CREATE youtube video promoting your product 68. ATTEND AN INDUSTRY TRADE SHOW 69. CONSIDER SELLING YOUR PRODUCT in BULK AT WHOLESALE 70. BRING ON A BOOKKEEPER TO AUTOMATE ACCOUNTING

100 Steps in review

71. CREATE AN EMPLOYEE DIRECTORY 72. REVIEW YOUR P&L & balance sheet monthly 73. COMPARE INITIAL FORECAST WITH ACTUAL RESULTS 74. HIRE A SALESPERSON 75. CREATE A SALES COMPENSATION PLAN

100 Steps in review

76. SET UP A COMPANY HEALTH CARE PROGRAM 77. ESTABLISH YOUR VACATION POLICY 78. TEST OFFLINE ADVERTISING CAREFULLY 79. CREATE A COMPANY INTERNAL INTRANET 80. CREATE a digital company handbook

100 Steps in review

81. OPEN UP A CREDIT LINE WITH YOUR BANK 82. CREATE AN OFFSITE WORK POLICY 83. ONCE YOU CAN SHOW $1 in means $4 in revenue,

raise capital 84. CREATE A LIST OF FIRMS TO RAISE INITIAL GROWTH

FUNDING 85. UPDATE YOUR PITCH DECK

100 Steps in review

86. BUILD RELATIONSHIPS WITH INDUSTRY BLOGGERS 87. SEEK PRODUCT REVIEWS 88. HIRE AN EXECUTIVE ASSISTANT/OFFICE MANAGER 89. HOLD YOUR FIRST COMPANY RETREAT 90. TAKE CUSTOMER FEEDBACK AND IMPROVE YOUR

PRODUCT

100 Steps in review

91. GET CONNECTED TO INVESTORS FROM PEOPLE YOU KNOW 92. HAVE INITIAL GET TO KNOW YOU MEETINGS FOR

FEEDBACK

93. UNDER PROMISE AND OVER DELIVER ON RESULTS FOR NEXT 90 DAYS

94. DETERMINE HOW MUCH CAPITAL TO RAISE 95. RETURN TO FIRMS YOU LIKE FOR PARTNER PRESENTATION

100 Steps in review

96. DO 20 partner presentations in 2 weeks 97. Get 2 term sheets 98. NEGOTIATE & SIGN TERM SHEETS 99. COMPLETE DILIGENCE 100. CLOSE ON CAPITAL

Lessons from my 20s

Business lessons

PART II, Section 13


Dont get stuck In analysis paralysis

Take action NOW!


It is UP TO YOU to GET OUT THERE, DO IT &

TAKE THE INITiATIVE


Dont be Afraid to

FAIL!


RECOGNITION & PRAISE CAN BE BIGGER MOTIVATORS THAN

Salary & BONUSES!


ALWAYS COMMUNICATE FREQUENTLY & OPENLY TO CUSTOMERS & STAKEHOLDERS DURING NEGATIVE EVENTS


ONCE YOU HAVE 80% OF THE NEEDED INFORMATION MAKE THE CALL Youll be better off

By ACTING QUICKLY LEARNING & Iterating


WHEN THINGS ARE GOING WELL financially IT IS TIME TO PREPARE FOR Difficult times

Business Lessons Learned

BUILDING A BUSINESS is like MOVING SOMETHING heavy IT TAKES TIME to GET INERTIA GOING. BUT ONCE YOU DO, THINGS CAN MOVE QUICKLY


HAVE ALL TEAM MEMBERS SHARE THEIR PERSONAL stories

WITH THE TEAM


WHEN YOU GET TO 30 EMPLOYEES HIRE A COO


YOU MAY NOT BE ABLE TO DO EVERYTHING AT ONCE TAKE A LONG-RUN APPROACH & PLAY LIFE LIKE A LONG-TERM GAME


IF YOU PRESENTLY DONT HAVE THE FINANCIAl RESOURCES, THE EXPERIENCE OR A GOOD BUSINESS IDEA, INTERN OR GET A JOB AT A COMPANY YOU ARE PASSIONATE ABOUT AND START BUILDING YOUR NETWORK & experience


ALWAYS FOCUS ON BUILDING QUALITY & GIVING RELATIONSHIPS WITH

GOOD PEOPLE


REGARDLESS OF WHAT YouRE DOING MAKE SURE YouRE CONSTANTLY

LEARNING


TAKE A PROACTIVE ROLE IN PLANNING, GOAL SETTING, &

PERSONAL EVALUATION


Dont be afraid to ask for help People are often very willing to HELP YOU IF YOU ASK

GENUINELY


GET Experience however you can Build your network Have confidence And BE IN IT TO

Help Others


IF AND WHEN YOU SUCCEED GIVE BACK

There are many brothers & sisters

Who have not been as fortunate

part 2 - entrepreneurship - lessons from my 20s by ryan allis

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