Not yet a good bet

sprout

Yesterday, I wrote about my new goal to be more open on this blog. This means being more personal about my own strengths/weaknesses, delving deeper into my own psyche, and writing more about what I am actually doing on my enterpreneurial journey. It will make blogging more cathartic for myself, and should hopefully make a better read for you.

Here is an example of what I mean.

Earlier, I wrote about securing investment from others. The main idea behind that post was that in order to secure investment from others, you must seem like a good bet.  The problem is that you won’t always seem like a good investment. In those circumstances, the only thing you can do is bet on yourself. With time (and of course with working smart), you will eventually become a good bet.

If I look at that blog post, it sounds interesting in theory. The problem is that it is abstract. If you read between the lines, you will see what I was trying to get at. But, to make things easier, I could just come out and say it.

What I meant to say is:

I am not yet a good bet. But I hope that one day I will be.

Specifically, I speak in terms of startups. I am not yet a good bet for seed or angel funding. I know this because if I was looking at myself from an outside perspective, I wouldn’t invest.

In startups, a good investment seems like it has some sort of unfair advantage. There are several ways you could have an unfair advantage, and I don’t meet any of them. Here are what I can come up with:

  • Experience: Founders or early employees with a success under their belt have valuable experience. It gives them an unfair advantage compared to most, and it is no wonder why some of these people can raise on simply an idea. Guess what? I have no experience in startups. Zero points for me.
  • Team: You hear about team all the time. An experienced team is the best. If they aren’t experienced, a few super smart friends who have banded together may also be a good bet. It isn’t surprising that accelerators prefer teams. The bad news is that I am a inexperienced solo founder at the moment. Again, zero points.
  • Market insight: This is another form of experience. Even if I have no experience in startups, if I had deep knowledge about my niche, that would give me an unfair advantage; one that may be worth betting on. My area of expertise is in computer architecture, and now I am building a social media web app. Those aren’t the same thing: zero points.
  • Traction: If there is one thing that trumps everything else, it is traction. If doesn’t matter who you are. If you go to a VC with massive traction in a big market, you will be probably be a good bet. I have no traction.

Let’s check out my total score: zip.. zero.. zilch. This is why I am not yet a good bet.

So, I’m doing the one thing that I can do: investing in myself.

21 months ago, I quit an industry research job and jumped into the deep end. I picked up front-end and back-end web programming. I’ve dabbled in product design. I’ve built and scrapped three different products along the way. I’ve played with different consumer web apps and studyed them to figure out why they are great (or why they aren’t). I’ve spent a good amount of time on Hacker News, reddit, USV.com, etc. I’ve been blogging to develop my own thoughts. And, I’ve been slowly building a network of founders and operators. Through this time, I’ve been living off of savings, which obviously won’t last forever.

To be honest, I haven’t gotten far. But I still feel good about myself because I have learned a whole hell of a lot. I can feel the growth. Yes, there is a lot more to do, but progress matters.

I’m like a tiny sprout in the middle of the forest. Around me are the giant redwoods; the Googles and the Amazons. They dominate the forest, and are impossible to miss. Some are smaller, but still difficult to miss: the AirBnbs, Dropboxes, Pinterests, and Tumblrs. And even smaller, you see all the saplings. They aren’t huge, but they have grown a good bit, and show potential. These might be worth investing in.

But the sprouts? They are tiny. As an outside observer, there isn’t much you can do with all of the sprouts. You can’t really see them unless you look close. And if you look close, they are everywhere. Which one would you bet on?

As a sprout, the only thing you can do is (1) remember that everyone started as a sprout, and (2) give yourself the chance to grow.

So that is where I stand.

I am not yet a good bet. But with time, I think that one day I will be. Hopefully, it comes sooner than later. My savings won’t last forever.

Entrepreneurs: the eternal optimists

 

boats-sunset-flickr-jeantil

Recently, my girlfriend and I have started running together a few days a week. It is the perfect chance to exercise, talk about how our days went, and chat about anything that may be on our minds. So far, it has been awesome.

During our run today, I began to get excited about my current work on Soulmix. I started talking about how great things could be, and how exciting the big vision could be. I didn’t get more than a minute or two into this before my girlfriend stopped me.

The following conversation went something like this:

Her: “Alex, the big vision is great and all, but you need to figure out how to get it off the ground from nothing.”

Me: “I know, I know.. I’m just talking about how I’m starting to see more potential in the project.. of course, if it pans out.”

Her: “I just don’t want you to count your chickens before they hatch. In the past two years, you have gotten this excited 3 times already, and then later on decided to work on something different. It might be good to not focus on the big vision that much right now, and keep focusing on what comes next in the short term.”

Me: “Yes.. it has already happened a few times. But hey! I’ve been learning a lot, and I have to choose something to be working on. I’m only going to choose, it might as well be something which I believe has a big vision behind it. Whether it actually does? I’m not sure. I guess I will find out somehow. But I need to believe it.”

The last sentence seems to be one of the defining characteristics of entrepreneurs: we want to believe.

We are eternal optimists. Actually, it is more than that. We have to be eternal optimists.

The entrepreneurial journey is tough. It is a rollercoaster of a ride, and it would be difficult (if not impossible) to withstand the continual ups and downs without believing in ourselves, and believing in the vision. At times, that belief is all there is.

We are eternal optimists, but not eternal blind optimists.

The trick is to believe, and then forge ahead with eyes wide open, looking for the obstacles and market realities that will render the belief useless.

How do you manage this?

I don’t know.. I’m still figuring it all out. But I can tell you it certainly ain’t easy.

 

To feel alive

RUSH

I recently watched the movie Rush, a movie on the 70’s rivalry between Formula 1 drivers Niki Lauda and James Hunt. In a voice-over early on in the movie, James Hunt talks about women, driving, and feeling alive:

I have a theory why women like racing drivers. It’s not because they respect what we do, driving round and round in circles. Mostly they think that’s pathetic, and they’re probably right. It’s our closeness to death. You see, the closer you are to death, the more alive you feel, the more alive you are. And they can see that in you, they feel that in you.

This quote immediately rang true, and stuck with me: not the part about women (I’m sure it may be true), but the part about feeling alive.

The closer you get to death, the more you feel alive.

The thing is, this is pretty extreme. I’ve never had a real brush with death, and most of the people I know haven’t either.

For us, there may be another less-extreme way to put it:

You closer you get to failure, the more alive you feel.

This feels very true to me, although I admit I have only learned it recently.

For most of my academic/working life, I wouldn’t say that I did much which made me feel particularly alive.

In school, many things didn’t matter. Sure, an ‘A’ was tough to get. But for the most part, passing (i.e., getting a D- or better) was pretty easy. Grad school was similar. Getting a specific paper published was difficult, but with time, most PhD students figured out how to graduate with a paper or more. With so many PhDs graduating, failure didn’t feel like a huge concern.

Since I quit my job, things have drastically changed. Failure is a real option. I have already worked on several projects that have not panned out. These failures have cost me time and money, both of which are valuable. I make no money at the moment. I am spending from my savings, and each month without some sort of success eats into these savings. Each month brings me closer to going broke, which would feel like a real failure.

In short, I’m trying to say that my ass is on the line. I feel it every day, and it can be pretty stressful.

But you know what?

After nearly two years of this, I wouldn’t have it any other way.

I feel alive. I feel that my work matters. There is real upside, and there is real downside. I am pushing myself, and I am trying to creating something meaningful in the world. Honestly, I can’t think of a better job.

Luke Wroblewski: Mobile to the future (Google tech talk)

I came across a great talk about mobile from the AVC blog from Luke Wroblewski on mobile product design.

Luke makes an insightful point that mobile isn’t just a smaller desktop. Similar to the text, music recordings, radio, TV, and the Internet, mobile is actually a new form of mass media. And as a new form of mass media, it is transformative. We shouldn’t be designing for mobile as if it was a smaller computer. We need to treat it as an entirely new things.

He notes how Facebook has become a mobile company, and how more and more companies will hit a point where mobile traffic outpaces desktop traffic.

The bulk of this talk goes through one example of rethinking login design for mobile. All in all, a great talk for those thinking about mobile trends and mobile design.

Derek Sivers: How to start a movement

People often make the analogy between starting a movement and getting a startup off of the ground. People also tend to glorify the leaders/founders for getting the movement going.

Derek Sivers has a really interesting take on this, and observes the importance of early followers. This is a short video, and I won’t spoil it anymore than that. If you haven’t seen it, it is definitely worth a view.

Securing investment from others

An important part of building large scalable startups is securing investment money. The cash infusion is important because it allows you to grow much faster than you would normally be able to grow. In winner-take-all markets, this can be the difference between success and failure.

Securing investment isn’t just for startups.

When you get hired for a job, it essentially means that your job is making an investment in you. Your boss has decided to place a certain amount of money in your direction, with the expectation that the cash investment will pay off in the future.

You could make a loose analogy with relationships also. They say time is money right? Time can often be more valuable than money, since you can never get time back. When someone decided to spend time with you, they are investing their time with you. The expectation is that the time is well spent, and that there is some type of reward/benefit for them. Relationships don’t always work this way, but I would argue that a great two-way relationship does: both people invest their time in each other, and both people help each other grow.

Securing outside investment can be a scary thing. It isn’t your decision. Someone else makes the decision to invest in you.

In order for someone to invest in you, you much either (1) be a good investment, or (2) seem like a good investment.

Both strategies will work, except that (1) will produce long-term benefits for the investor, and (2) will most likely will never produce any type of benefit. What follows seems clear. You should shoot to be (1). Be a good investment. With (2), you are just duping people, and it will never work out for you in the long run.

How do you become a good investment?

You can hope for friends and family to invest because they care about you, but at the beginning, the only person to who can definitely invest in you is YOU. You may not have money, but you have your own time. And, with that time, you can choose where you place your attention, what you learn, and what you do.

When you have developed yourself enough (emotionally, physically, mentally, tactically, etc.), you will simply BE a good investment. And when you are a good investment, you just be yourself, tell the truth, and it should’t be hard to get outside investment.

What are you after? VC money? The job? That awesome girl or guy?

Become a good investment, and you will get what you deserve.

 

What content people want

Paul Graham of Y Combinator has a motto: “make something people want”.

If you believe in the motto (which makes a lot of sense), and you are working on a content-related startup, Randal Olson has recently posted a gift for you. In a blog post, he shows the number of posts on Reddit across different subreddits.

A picture of the large timeline is below:

Credit: Randal Olson

Credit: Randal Olson

In this graph, you can see that Reddit gained traction within a particular niche which was most programming related (apparently this niche loves NSFW content also). In the first year or two, it covered other topics that programmers/hackers may find interesting, such as politics and science. In 2008, Reddit went mainstream, allowing users to create whatever subreddits they liked. And as a result, Reddit as a whole changed dramatically. Today’s Reddit is dominated by images, memes, videos, advice, and funnies.

Some look at it and cry out “Reddit has gone mainstream!”, or even worse, “Reddit has gone downhill with stupid memes and garbage”. That is one way to look at it. Another way to see this is to understand that the users have spoken. This is the Reddit they want. More specifically, this is the content they want.

If you are building a content-related startup, this information is gold.

If you are building a general content-related startup, you better allow users to share some combination of images, memes, videos, advice, and/or funnies.

If you are building a niche content-related startup, make sure to take a good look at this graph. The right side of this graph is what users want. If you are going to target it niche, it shows you which niches you might want to start thinking about.

P.S. On a related note, last year, I wrote a blog post on the unbundling of Reddit. It is still continuing today, and if you are building a startup that unbundles a niche of Reddit, this tells you where the big niches are.