I’ve been around the block a few times as a technology leader. I’ve been fortunate to start a company, bootstrap it to profitability, skipping the VC rounds, taking it public on the NASDAQ exchange and then having a successful exit – this was over a 14 year span. I learned to manage, I learned the importance of leading by example. Since then, I’ve done another startup and performed three corporate turnarounds, all feeding my intense desire to learn how to build financially sound and insanely happy and productive companies. I thought I had heard and seen it all. Boy was I wrong.

This past year I have been working with 10 startup companies. Some through our accelerator here in Bend, Oregon, others through a recent Startup Weekend we held in Bend and the rest through my consulting practice. Not all startups are created equal. Some start with one person, others with more. Some start with a techie developing a killer mobile application, the other a mom with an idea on how to reduce her child’s asthma attacks and that’s it.

Working with these companies I’ve had the chance to see what has worked and where they’ve stumbled. I’ve been able to start understanding the Best Practices of a Startup Leader. The first thing you should note in my title is, I chose the word “Leader” over manager or founder. I strongly believe you lead people, and you manage things. Startups are about people, not the things. The things are artifacts of the production from the team. Production drops when people fail to lead.

If you’re thinking of founding a startup, or if you’re a founder of a startup, here are some of the Best Practices I’ve observed from the founders I’ve worked with:

1. They’re passionate.

They’re the Chief Customer Officer. They empathize and represent the customer. They’re subject matter experts in their field. They understand the customer’s persona and the problem they’re trying to solve better than anyone on the team. They know if they help their customer succeed, they will succeed.

2. They’ve got a good soul.

They’re grateful for people helping them in their startup. Not just the workers, but also the advisors and outsiders cheering for them. They choose to do the right thing over the easier path. They have integrity; they build trust and become trustworthy. They’re humble. They take responsibility for all setbacks and give credit for all the wins to others. They understand the power of two simple words, "Thank you."  They say it often.  People know they're appreciated because they're constantly reminded how much they're valued.

3. They’re a multitasker with a strong work ethic.

They’re often first to arrive and last to leave. They lead by example and are often task driven. They’ll jump across functional areas to lend a hand wherever they’re needed to kick the ball forward. They help people get unstuck. They’re not afraid of uncharted territory or learning a new skill.

4. They’re team builders.

They’re always looking for the talent and always recruiting and networking. People want to help them by volunteering, becoming advisers or working for equity. They understand it’s their duty to encourage and inspire others, because in turn it encourages and inspires within. They seek other positive, gung-ho team members.

5. They set great expectations.

They dream BIG and set huge expectations. They understand the power expectations has on the team. Saying we will have the MVP done by the end of the month, or we will have our first paying customer by Friday does work. They understand it’s not where you start that counts; it’s where you finish.

Obvisouly I could go into greater depth but I think you get the point.  Feel free to add to this list, as always, your comments are welcome below.

...Jim

My wife Debbie and I caught the premiere of NBC’s The Biggest Loser the other night. For those that follow the show, Jillian Michaels returns as the senior screamer on the show. I like watching the show because of its use of embedded product placements and am always curious what they’re going to do next.

This year, The Biggest Loser has a totally redesigned fitness center, with all of the equipment provided by Planet Fitness, a low cost, neighborhood gym model, available as a franchise. They appear to be out lifting 24 Hour Fitness, the previous equipment sponsor on the show.

As the premier was airing with Bob, Jillian and Dolvett beaming over the new gym equipment by Planet Fitness, I decided to visit http://www.planetfitness.com/ to see if anyone had purchased the rights for Central Oregon, where I live. I’ve been a gym goer since I was 14 and have thought about owning a neighborhood gym for the past 20 years. But that is another blog post, I digress.

When I attempted to go to Planet Fitness, their site crashed. The premier had over 1 million viewers; I suspect this was a spike the Planet Fitness IT team may have not expected. I'm sure the sales and marketing team were happy their product placement created demand, yet immediately went into shock when their web site crashed.  I want to suggest a better way. If Planet Fitness would have moved their website to Microsoft Windows Azure Cloud Platform, they could have easily adjusted the amount of computing resources around their original air dates on both east and west coast premiers. Once their website and member portal is converted to take advantage of Windows Azure elasticity, it’s really as easy as logging onto the Azure management portal and moving a slider up and down to allocate more or fewer server instances.  You have the advantage of extra computing resources when you need them without paying for a maximum build out of a datacenter only to be fully utilized when the Biggest Loser airs.

If your business is a B2C (Business to Consumer), and you’re approaching the tipping point, your IT staff should be moving your customer facing web properties into the cloud. IT staff are always resistant to change, especially outside their comfort zone.  This is when you need a team of skills-based consultants who have been there and done that, successfully.

Nimble Development - Windows Azure Experts

Bend, Oregon, based Nimble Development (www.NimbleDev.com) is a team you can trust. They have deployed websites, web applications, tablet applications and mobile applications on Windows Azure. In fact, they were one of the first Microsoft Gold Certified Partners for Windows Azure, working through very early and ever changing Azure SDKs (Software Developer Kits). Nimble Development is competent at Window’s Azure and also has friendships and strong ties to the Windows Azure development team.

Add the fact they’re an Agile development shop, skilled in short SCRUM sprints with results, they move quicker and bill less time. In a word, they’re Nimble. If you’re a growing B2C company, there is no reason you should be hosting your website in a traditional hosting environment that can’t add computing resources when you need them and shrink back down during non-peak periods. This is what Microsoft Azure was designed to do and Nimble Development is the team to help you. I know this sounds like a commercial, it isn’t. I hate to not offer real solutions to my web visitors. If any of you have worked with other teams to move your site to a true cloud platform, please use the comment field below to share your details.

As for Planet Fitness, congratulations on opening your 600th franchise. Now make sure your IT strategy will support it.

…Jim

I had the opportunity to attend a startup weekend here in my hometown of Bend, Oregon. In 54 hours, I watched 30 ideas, turn into 7 concepts that developed 7 companies including 7 websites, facebook pages and twitter feeds.  Each team conducted interviews with potential customers and defined their first release backlog for their Minimal Viable Product (MVP), embracing the Lean Startup principles discussed by author Eric Ries. Each team also created business models to help them understand their potential revenue opportunities, cost of goods sold, SG&A and profit potentials.  On Sunday night at 6pm, just 48 hours later, these new companies presented their five minute pitch deck to a group of judges.  One company had secured it's first paying customer, and another company was invited into a local World Market to test their homemade Venezuelan chocolates in the store. These teams gained an amazing amount of traction over the weekend. In this blog post, I plan to share some of the lessons learned from the weekend and how they can be applied to your startup.

I had heard of Startup Weekends being held in other cities, but I didn't give it a lot of thought.  Honestly, the idea of spending my entire weekend coaching teams didn't sound like a lot of fun.  Boy was I wrong.  Not only was it a ton of fun, it was insightful, rewarding and energizing. Let me explain...

What is Startup Weekend you ask?

Startup Weekend is a global network of passionate leaders and entrepreneurs on a mission to inspire, educate, and empower individuals, teams and communities to turn a pitch into a startup. These are 54-hour events where developers, designers, marketers, product managers, business strategist and past Founders (acting as coaches), come together to share ideas, form teams, build products and launch startups.

Some people assume Startup Weekend is a tech driven event solely for software programmers, like a hack-a-thon, they're not. Startup Weekend draws a wider audience with broader skills: sales, marketing, business development managers, finance, UX/UI, web, CSS, data architects, past founders and current CEOs, CFOs, VCs and a handful of experienced Angel investors.  Add these skills early on, when the MVP is being defined, changes the  typical focus on "product development" to "customer development", asking some tough questions, early. Like, "Who is our customer, what is their persona, and how much would they pay to have this product or service?"  Add in the 54 hour time box around the event, you also bake in a real sense of urgency to move quickly into customer discovery.

What happened at Startup Weekend – Bend, Oregon.

42 participants, 8 coaches and 1 facilitator out of Seattle arrived at 6pm, Friday night. After a couple of short presentations, the facilitator explained the process:

• Anyone in the audience that has an idea can pitch their idea to the room using their “Pitchfire” process. This basically gives each participant 60 seconds, to explain the problem and solution. No PowerPoint or props, just a mic and a stopwatch.
• The idea and key points are scribbled on a large 3M poster board and stuck around the room in preparation for the networking event that would follow the Pitchfire. This is when people would have the opportunity dive deeper into the idea and shake it out.
• With our size of 42 participants, they estimated we could support up-to 7 or 8 teams. The ideal team size is between 5-8 people. Everyone would be given three dots they can use to vote for their favorite pitch.
• Once the top 7-8 pitches are established, participants are given 6x3” post-its where they write their specific skill (coder, UX/UI, copy editor, marketing, sales). Everyone then decides which team to join, by placing their post-it, with their name and skill set, on the poster board of their favorite pitch.
• With the teams formed, they’re given workspace area and get to work, focusing their first time box on customer development, and then defining their minimum viable product followed by a discussion on product market fit – all before they call it a night Friday night. Yes, it's intense.

Following the overview discussion, the facilitator asked the forty-two participants how many wanted to share their idea in the Pitchfire. More than thirty people raised their hands, and the pitches began, Startup Weekend was off and running.  

Who attended Startup Weekend - Bend, Oregon?

Of the 42 participants, we had a handful of Juniors and Seniors from our high schools, another handful from Oregon State University Cascades and Central Oregon Community College.  The rest of the participants included software developers from our local business, marketing execs, a couple financial advisers and a handful of retired business professionals.  The majority of the participants had full time jobs.  None had ever been to a Startup Weekend before and like me, had no idea what to expect.  I want to stress, it wasn't a room of unemployed people looking for a job.  Many of the attendees are employed and simply wanted to experience the rush of starting a business from scratch.  Sure, many continue to work on their new businesses in their spare time, but the goal for anyone should be to simply show-up, jump-in and enjoy the experience of going all-in on an idea for 54 hours.

Lessons learned from attending a Startup Weekend?

Obviously, everyone walked away with a sense of accomplishment from the weekend, and they should from what they accomplished in 54 hours. What wasn't obvious were some of the other lessons learned, watching these startups incubate in this accelerated time box. Here are a few of my observations:

• Startup Teams consisting of 6-8 team members creates a great dynamic.  Usually, I'm working with 1-2 founders during this early phase, who are begging for help from friends, family and others in the community, it's hard to gain a lot of traction this way.  Startup Teams consisting of 6-8 members can bulldoze through obstacles and gain traction fast. I witnessed one team define their MVP, then immediately dispatch two team members to go to a local coffee shops and pubs to test the concept, then return an hour later with early customer feedback. 
• Focus was on "real work with actionable tasks".  The best teams put all of their members to work, quickly.  The best teams collaborated, divided the workload into teams of two, set a time box to reconvene and went to work.  
• The best teams created their Lean Business Canvas before calling it a night Friday night.  They tracked their iterations using a validation board methodology to manage pivots.  As coaches, we celebrated pivots and encouraged each team to create time boxes throughout the weekend to actually focus on pivot discussions.  This helped the teams with continuous innovation, focused on customer development.
• Everyone can benefit from attending a Startup Weekend.  CEOs, Sales, Marketing, Finance, Business Development, Coders, UX/UI, IT and students.  I guarantee, you'll learn something and have a lot of fun. It will make you better in your day job, and it will re-energize you. I also wouldn't hesitate championing these events to my employees and encourage them to give it a try. The benefits out weigh any risk of losing your talent.

One of the companies created during our weekend was Perfect Menu for restaurant owners.  You can check them out at http://perfectmenu.com/

To see a list of upcoming Startup Weekends, click on this link and check out the Events Map. Startup Weekend is global, so regardless of where you live, you can experience yourself.  I encourage you to attend and then leave me a comment with your observations.

...Jim

Introducing the Nori Lights - Bicycle Illumination System

San Diego Kickstarter and Inventor, Chris Flynn, came up with a smart way to Illuminate your bike wheels, letting drivers recognize you instantly at night. Well all know that tiny front and rear lights are not enough. Check out this video:

I know Chris Flynn, he's family, as Nori is my Uncle Nori.  I'll be the first to tell you that Uncle Nori would be very proud of Chris.  You can trust Chris to deliver on his promises and deliver on your pledge.  I would appreciate if you would support this project, by:

• Telling your friends about it.  Add the link to your Facebook, Twitter, Google+ and LinkedIn profiles.
• Buy a Nori Light System if you own a bike, purchase a tee shirt if you don't.
• Forward this link to one bike shop in your area. Look them up on the web and send them an email via their contact us page.

Let's start another small business in America.  Please support this project today.

Thank you!

...Jim

This is an exceptional episode on ThisWeekInStartups featuring Nolan Bushnell. Nolan is know for many things, including founding Atari, being Steve Jobs' boss, starting the restaurant chain Chuck E. Cheese's and, most recently, creating the educational startup Brainrush.

If you're an educator or interested in education, online education or distant learning, this is an excellent podcast to watch. You'll get to learn about brain decay and other cool things.

If you're just old enough to have used an Atari 2600 or played Combat or Pac-Man for countless hours, this is a great podcast to watch.

Finally, if you're 50, 60 or 70 years of age and still courous about the future and what can be, instead of focusing on what is, this podcast is worth your time.

The Living Room continues to evolve.

I likely have a very common living room which consists of a 55" Sony HD TV, XBOX 360, LG BluRay DVD, Apple TV and a DirecTV HR21 DVR. My DirecTV cost $121.99 per month, a whopping $1,463.88 per year.  When it comes to programming, we have DirecTV's Choice Xtra package which includes 195 channels, HD and DVR features. In reality, my wife and I watch primarily 13 channels.  We've tried to cut the cord and live off of Amazon Prime, Hulu Plus and AirPlay from our iPad to Apple TV, but it has it's drawbacks.  One drawback I would like to address in this blog is content from the major networks (ABC, NBC, CBS, FOX and PBS).

Introducing Simple TV (known as Simple.TV as in http://www.Simple.TV)

Assuming you can receive HD signals from the major networks at your home or office, Simple.TV is a small device that captures these signals, converts them to digial and stores them on a network storage device.  Simple.TV does not plug into your TV, it connects to your home network via an Ethernet port, an HD antenna or basic cable connection, a USB 2.0 Port for an external drive and power.  As I understand it, once connected it will appear as another media device on XBOX, Roku or iPad.  It records full 1080p HD Video and allows you to watch live TV from any of these devices.  You can also purchase their programming guide service for $4.99/month and schedule programs to be recorded just like any standard DVR.

(photo from http://www.Simple.TV)

A Kickstarter backed product.

Simple.TV was launched with the help of the Kickstarter community. 1,046 backers pre-purchased $226,415 in product to help them get launched back on June 29th.  The product is scheduled to ship this year.  The company was also a recipient of CNET's Best of CES 2012.

DVR software development is not easy and other concerns.

I purchased one of the first TiVo units in March 1999 and stayed with DirecTV when they lunched their first DVR in 2008.  What I learned as a customer from these experiences is managing broadcast content is not easy. I have not seen or used Simple.TV's program guide, so I can't comment on how stable it is.  What I can tell you is DirecTV DVR software still has it's challenges. Simple.TV only has one tuner, where TiVo now sports 4 tuners and DirecTV HR24 has 5 tuners.  Still, the trend is to having a central playlist available to every TV, Tablet and Smart phone in your home.  If Simple.TV can pull off the programming challenges, since they're not relying on cable or satellite companies to resell their device, they may gain traction.  Also, there is no reason your Simple.TV can't live outside your home network, something that DirecTV doesn't allow.  Simple.TV has possibilities and has the ability to disrupt on-air content.

Television is going to get disrupted, it's just a matter of time.

We're seeing the walls starting to crack.  Video consumption is moving rapidly to tablets and smart phones.  I know this is crazy to consider, but the TV of the future may be a monitor, yes a simple display like the flat screen on your desk.  The industry is digesting new technologies like OLED and 4K resolutions.  It may make more sense for Microsoft, Apple, LG, and Samsung to focus on building devices to connect to your TV (or Monitor) through your AV receiver instead of building the firmware in the actual TV. I don't think people are going to purchase TVs like they do smart phones today, on a two-year cycle. Therefore devices like DVD, DVRs, Game Consoles as well as devices like Roku, iTV and Simple.TV may find their way in more living rooms as consumers want the latest features of a smart, Internet connected TV, without purchasing a new TV.

I'll keep an eye on Simple.TV and will forward any reviews on the programming guide and DVR functions.  If you come across any other startups like Simple.TV, please drop me comment below.

...Jim

A letter dated July 12, 2012 from Christy Susman, a senior attorney for Jack Daniel's has gone viral throughout the Internet.  Twitter, LinkedIn, Facebook, Reddit, Digg, StumbleUp - it's being read by hundreds of thousands of people.  Why?  Because it breaks ranks with the typical harsh, "I'm going to bring you a lot of pain", tone that attorney's learn in law school.  Ms. Susman writes with professionalism, humility and a tone of class which is being dubbed:

The Nicest Ceast-And-Desist Letter Ever Written.

I think you'll agree with me, most corporations would probably cring to see one of their cease-and-desist letters out on the world wide web. Several months ago I had this exact same discussion with an attorney on the other side who justified his asshole tone by saying:

"No hostility intended, but, sometimes I have to wear the hat as the company's counsel."

"No, you're just a prick and have no class Jason," is what I thought and moved on. For some of us, life is simply too short to engage in 7th grade behavior. I think most attorneys, especially outside counsel, immediately go hostile because they want to fight. They're incentivize to fight. Unlike a real fight, they have nothing to lose because they get to run up their client's bill.

Read the letter Jack Daniel's Attorney sent to Patrick Wensink, author of Broken Piano for President.

Lessions Learned From Jack Daniel's

• Kill Them With Kindness - Nice guys, or in this case, gals, can finish first.  Attorney Christy Susman took the high road, explained her reasons and offered a helping hand. She was respectful and very much, a gentlewoman.  It demonstrates professional maturity with a mix of citizenship, yes citizenship, as in being a good neighbor.  I hope you'll agree with me when I say, the world can use a little more citizenship and less pricks.
• Write every letter as if all your cusomers are going to read it - This letter has gone viral.  It also has gone in the history books.  It will forever live on the internet. Choose your words wisely as Christy did.  It speaks to the corporate culture and character of the author and corporate brand.  In this case, I hope you'll agree with me that both Jack Daniel's and Christy Susman are each a class act.
• Everyone is in Sales & Marketing, even your legal team - As I write this, I'm monitoring the Twitter Stream for "Jack Daniel's". It is streaming at 20 new tweets every 15 seconds.  This act of professionism has likely generated more press than a full page ad in Cigar Aficionado magazine. You can't pay for this type of advertising, good will or brand association.

This story does have a happy ending. Patrick Wensink, the recipient of the letter said he was going to indeed compile with the letter and change the cover when his inventory runs out - which according to his website will be any minute.  Seems there is a lot more interest in Broken Piano for President now. You can check out his full blog post by clicking here.

I hope all of you will join me to toast Christy Susman with a Jack on the rocks tonight!  Please share this with your friends.

...Jim

Bend, Oregon, is a great place for entrepreneurs. Located in the center of the state, east of the cascade mountain range which provides year-round recreational activities (snow skiing, hiking, fishing and mountain biking) and collects most of the rainfall Oregon is known for. For example, Bend averages just 11.4 inches of rainfall each year and records 295 days of sun shine. This is far better than Portland's 43.5 inches of rain and 200 days of blue skies. The pure beauty of the area, pleasant weather, and year-round activities make it a great place to live. The friendliness of the people in the community make it the best place I’ve ever lived.

I’m not alone, about 76,000 people agree. What many people don’t know is, Bend has an active mentor community filled with successful executives from every industry. Technology, medical, oil & gas, education, legal, software, fashion, film, theatre and sports, just to name a few. We have a lot of 50 “something” retirees who live in the area, looking for worthy startups to mentor. This past saturday I met a retired Navy SEAL commander who is volunteering his time to help as a project manager.  "Failure is not an option" has a totally different meaning for him.  He's impressive and so are all of the other mentors I have come to meet and now call friends. 

With the help of EDCO and the leadership of Roger Lee and Jim Coonan, we’re starting to see these mentors organize. It started as an excel spreadsheet of local “Stable of Experts”, a list of people who are willing to help entrepreneurs in the area, often for no-charge. Now we have our Bend Venture Conference and the VentureBox business accelerator joining the ecosystem.

Recently, I had the pleasure of working with six startups in Bend, Oregon. Five were in our VentureBox business accelerator program. We met each Wednesday (3pm-8pm), for 12 straight weeks.  The founders, working with local mentors develop their business strategy using customer development and other lean startup principles. These companies have taken off and are now seeking business and strategic partners, customers (beta testers and early adopters) and angel investors. 

Here are 6 great startups in Bend, Oregon.

JettStream, Inc. (http://JettStreamInc.com)

JettStream helps children who suffer from moderate to severe cases of asthma. It does this by working with existing medical devices on the market to facilitate the delivery of nebulized medication to the child, while they’re sleeping. The JettStream product ensures the medication is delivered as directed by the pediatrician. It’s hands-free and does not require a mask to be placed on the child, allowing them to sleep, taking slow, deep, breathes. Studies have shown this maximizes the success of the prescription medication. JettStream has filed for their patent, and only requires a class 1 registration with the FDA, which they plan to receive within the next 30 days. JettStream is an add-on to the existing 10 million nebulizer air-compressors in the U.S. and will retail for around $200.00 The CDC estimates approximately 1.3 million new cases of childhood asthma are diagnosed each year. Therefore, the market potential is substantial. Bend, Oregon, has a vibrant medical community with Bend Research, a world class medical research and testing facility, Bend Memorial Clinic and St. Charles Hospital. Each of these organizations has offered time and expertise to help JettStream with their mission to help asthmatic children.

CiviData, LLC (http://CiviData.com)

CiviData helps local government service providers compare utility rates and other fees to see how they stack-up with other cities their same size. Have you ever wondered how they come up with the price for parking tickets, dog licenses, airport parking lot charges or your water rates? CiviData is the first SaaS application of its kind and is transforming how local government service providers analyze and compare their operations to either defend their rates or justify rate increases. CiviData saves cities time and the expense of creating one-off reports annually. In a time when cities can’t afford to add head count, CiviData takes a laborious task and simplifies it, allowing city workers to focus on other projects. The application is sold on a per-seat license and can easily become an industry standard in city government, used by tens of thousands of people who work in, for and with city government. The technology is built, and data is being gathered and rolled out. If you work with city government, CiviData is worth looking into.

RallyCause, LLC (http://RallyCause.com)

RallyCause builds a marketplace of local businesses and local causes. For example, say your high school band is invited to play in the Rose Parade in California, but you need to raise $15,000 to send them. People sign-up and register the cause on RallyCause’s mobile application. Next, local merchants get in the act. They make offers, such as 15% of your entire purchase will go to the cause. When you shop at that merchant, you pay the normal price, but the cause receives a bounty. Pretty cool idea. This can be used by schools and other organizations , and it helps create a connection between local businesses and local causes. RallyCause has the ability to disrupt Groupon and other local coupon sites because both the merchant and the sponsors of the cause will be promoting the use of the application. It’s a win-win.

Zipede, Inc

Dr. Rick Cuddihy is working on a solution to better inform parents before, during and after their child’s doctor’s appointment . As parents, we all know how scary it is when our kids get sick. In this information age, Dr. Cuddihy is working on improving the information by creating custom video blogs containing relevant and useful information around the specific diagnosis. Parents will have the opportunity to prepare and educate themselves before their appointment, receive relevant information while in the waiting room and a recap of the key takeaways once they get home, reminding them what the doctor said. This is all designed to improve doctor-parent-patient communication. It’s a very cool idea and Dr. Rick’s style and approachability comes through in his videos, making it a winner.

Good Peeple, Inc.

Good Peeple engages your Facebook friends to help you find the best local service providers (gardeners, painters, dentists, etc.) in your area. Whether you're looking for a new doctor, contractor, day spa, or mechanic, you should trust your friends more than review sites. Good Peeple lets your friends give you trusted recommendations for businesses that they depend on. It’s a great way for service providers to engage their customers and build a social graph with their customer’s friends.

OwnersAsk, LLC (http://OwnersAsk.com)

OwnersAsk relies on customer's smart phones to give small business owners real-time customer feedback, usally while they're still in their business. Taking advantage of Quick Response (QR) codes, business owners simply visit OwnersAsk and sign-up.  Within 5 minutes they're downloading an unique QR code which they can place around their business. (Check out these QR Code Examples). Customers are given the opportunity to win gift cards and other prizes simply by using their smartphone and a free QR reader to register their feedback and comment on their experience.  OwnersAsk is targeting hospitality and foodservice professionals (fast food, bars, hotels, convenience stores, grocery stores) first, but it can easily expand to any business that wants to track customer feedback.. The real gem of the OwnersAsk platform is the registration system for managing the monthly drawings.  OwnersAsk uses Facebook's registration client to allow customers a one-click experience giving business owners the ability to connect with their customers. Customers opt-in for the drawing which OwnersAsk manages, including name, email address and their profile photo. Business owners receive feedback, connect with customers and can now offer future promotions.  Bars, resturants and fast food owners will immediately see the benefit of this application.

Bend, Oregon – An Entrepreneurial City

As promised, these are six great startups in Bend, Oregon. As I’ve mentioned before, I’m bias because I have worked with these companies and continue to help out as time permits.

Bend, Oregon, has less noise than Silicon Valley and can attract talent because people want to live and play here.

As more and more business executives, entrepreneurs, startups, angel investors, business journalist and venture capitalist visit Bend, and surrounding areas like Sunriver, Oregon, I believe Bend will become more and more popular. The one thing the area lacks is a regional VC or Seed fund so these entrepreneurs can focus all of their time on their startups without worrying about feeding their families.

If you’re an angel investor, or run a fund, and want to put a little money to work to help us grow our startup ecosystem, please don’t hesitate to reach out to me via the contact us form. We have the mentors, if we can add the seed funding and provide a fully equipped office with basic services, we could do so much more.

If you know of other startups in Bend, Oregon or Central Oregon, please use the comment section below and let me know. I'd love the opportunity to meet other entrepreneurs in the area.

…Jim

Eric Ries’s bestseller, The Lean Startup, is a thoughtful book that has created a conversation about startups.  It focuses on how to go from the back of the napkin to a Minimum Viable Product (MVP), to get in front of prospects in order to see if the idea is viable.

As with any new methodology, framework or process for the matter, I do not think audiences can truly measure its viability until they practice it themselves and spend time teaching it to others.
I’ve had the chance to do both, use it with a couple of startups I’m involved in and teach it in the VentureBox business accelerator in Bend, Oregon.

The key principle of The Lean Startup is BUILD-MEASURE-LEARN.  The goal is to come up with a minimal feature set, bring it to market, measure actionable metrics and finally learn from the experience and then start again.  It barrows heavily from agile software development and favors learning from early adopters versus relying deeply on requirements management by someone in marketing.

I’m all for Build-Measure-Learn, what I have a problem with is Minimum Viable Product (MVP).   What is the definition of “Minimum”? I’ve witnessed entrepreneurs get so caught up in this MVP concept, that they test a product too soon and pivot based on incomplete data.  In my opinion, more time, not less, needs to be spent defining the MVP, including who the audience is that will see it, at each iteration.  Don't make the mistake of thinking the MVP is outside of the product lifecycle. 
MVPs should be matched to audiences. For example, your first MVP may be designed to only been seen by the development team, then management, then marketing and then prospects under NDA.  My point here is, be thoughtful about the process and audience.  Showing it to management or marketing, can quickly throw the team off the rails.  An MVP has its own product lifecycle development process, some stages should only be viewed by the core team.

Keep in mind if you’re building hardware, versus software, you have more challenges because of soft tooling requirements.  Also, don’t under-estimate the power of look and feel.  Ignoring UX/UI in some applications can take you down a rat hole you didn't intend. Each product is different. Craigslist appealed to its audience with it's simplistic UI.  Instagram's UX/UI from the get-go is what helped it go viral. 

When showing an MVPs to outsiders for the first time, I recommend you reset expectations and goals for the preview before you dive in with the demo.  Even though MVPs are designed to test the viability of the product and idea, its natural for people to react to UX/UI as if it's a finished product. Setting expectations before the reveal, will get outsiders to focus on the things that matter at that moment in time.

Remember, there is no rule that says everyone gets to see your MVP or how minimal it really is. If you're working to disrupt a market or competitor, your MVP baseline may already be set. I've seen entrepreneurs focus too much on building a Minimal Viable Product, especially in an accelerator with weekly mentor reviews, rather than a Minimal Desirable Product, that focuses on solving a gap in the marketplace. I would contend focusing on desirability over viability is more important.  Anyone agree?

I'd love to hear your comments.

…Jim

Let me start-off by saying, "I love my Xbox 360". It's actually hard to believe it just celebrated it's 7th birthday (May 12th).  According to Microsoft, about 70 million consoles have been sold.  When you think about it, a piece of hardware that has lasted 7 years is pretty amazing. It's a testament to the design team, I tip my hat to them.  

Let me switch gears now and discuss what puzzels me about their strategy. Perhaps some of you can comment and help me better understand what I have wrong.

My living room has an Xbox 360 + Kinect, DirecTV HR20-700 DVR and LG BD670 BlueRay Player all connected to my home theather and Sony 55 Bravia/  It's a nice system, not great in today's terms.  The LG BluRay player is less than a year old, everything else was purchased when we bought our home in 2007.  The piece of equipment I hate the most is the DirecTV DVR.  If you scan our recordings, we only watch like 10 channels on our DTV. It's not worth the $100 bucks a month we pay for it.

In an ideal world, it would be great if my Xbox 360 could be hooked up to receive my free, over the air, HD channels and allow me to record them, like the old Microsoft TV.  That would get me pretty close to dumping DirecTV altogether.  It would be great if they could add the balance of the channels offered on PlayOn (a neat application to sling content from your PC to any DLNA device). It would allow me to turn off my PC, save power and add videos from NBC, ABC, CBS, FOX, Comedy Central, TV.com, TBS, Spike, and a dozen more. I often wonder why Microsoft doesn't just buy PlayOn from MediaMall and grab Jeff Lawrence (President and CEO) and David Karlton (Chief Technology Officer) two smart and passonate guys?  

Next, I would do everything possible to make sure every living room and bedroom had an Xbox 360 in it.  Here are some of the things I would talk to the team about:

• Skype - Microsoft owns Skype, so I'm not sure why it's still not supported in the Xbox 360 + Kinect?  The new line of Samsung Smart TVs has Skype built-in and they don't even come with HD cameras, it's an extra $170.00 bucks!
• Apple's Airplay - Anyone who has used AirPlay, loves it.  It's a great way for Microsoft to tap into Apple's AppStore.  Want to watch TED talks on your TV? No problem. With the number of iOS devices on the market today, this has become a must have feature.  Even companies line Denon and Pioneer are adding it to their new midrange AV receivers.
• Other Services - I'm a pretty fierce competitor, so I wouldn't let companies like Roku go unchallenged. All their apps should be available in the Xbox 360 app store.
• Media Sharing - It would be great if all the Xbox 360s were connected in the house and they all could share eachother's hard drive.
• More Apps - I don't understand why my LG BluRay has more apps in their AppStore than my Xbox 360? I'd love to know why.
• 3D BluRay Player -  I know all the reasons Microsoft didn't add a BluRay player, and yes I know things are moving to streaming, but dammit, my grandkids love watching the same old disney DVDs all the time. Why does Microsoft want me to go out and purchase a 3D BluRay player and add it to my home theatre?  Honestly, I wished the Xbox 360 team got pissed when we added any additional equirement to our receivers, because I want the Xbox 360 to be it all.

There you have it, I welcome your comments and suggestions below.

• ...Jim

Ten years ago, I couldn’t finish a dinner with my friends without someone asking me a computer related question. Even though,  I was a software guy, I was their go-to guy all things PC. The last two years it has turned to smart phone applications.  Now that I’m involved in startups and an accelerator, the dinner chatter often turns to startups.

Last night, all they wanted to talk about was Facebook’s acquisition of mobile photo sharing application, Instagram for a cool $1 billion dollars.  Was Instagram, which is still pre-revenue, worth $1 billion? Yes.  A company’s worth is measured by another company’s willingness to pay.  At this moment in time, Instagram and its team of 13, are worth $1 billion dollars. That shouldn’t be the main question.

To me, the true lesson here is about the founders. I wish I could say I know them, I do not. I’ve never had the privilege to meet Kevin Systrom and Mike Krieger. Based off what I’ve studied about their product, I can tell you that they are intensely driven by the user experience (UX). Instagram user interface is efficient and elegant.  For them, their Minimal Viable Product (MVP) had to have a WOW experience, which is why 25,000 people downloaded the application on their iPhone the very first day it was released in October 2010. Ninty days later, over 1 million people had it on their iPhone.  Today, it’s close to 30 million subscribers and with last week’s release for the Android market, that hockey stick is likely to continue.

So, what are the lessons we can learn from Instagram’s early success?

1. UX (User Experience) matters.  The lean startup and MVP principles don’t always mean your interface can (or should) suck. Also, you have to give credit to both founders for making sure the back-office was well designed and could scale. They clearly learned from Twitter and MySpace’s early failures. In order to have an awesome UX, the total user experience needs to be awesome. The fact they were able to pull this off, with their explosive growth, is impressive indeed.
2. Focus on what matters. Instagram is available only as a mobile application. Unlike Pinterest, you can’t view it on a website. This was another great decision because it allowed them to stay insanely focused on the user experience.  It also plays well for the type of photos they’re looking for. They want photos of people living life. Pinterest’s market is decidedly different. Just compare the photos on Instagram and Pinterest and you’ll see what I mean.
3. Keep it lean. According to CrunchBase, Instagram funding was $57.5 million from Benchmark Capital. A total staff of 13, they kept the group agile. Most companies with $50 million in funding would immediately grow to 100 to 200 people. This is impressive to me and something we can all learn from.

So even though I don’t know the Instagram team, I want to tip my hat to them.  Anything is possible, dream big!

…Jim

Yesterday, President Barack Obama signed into law the Jumpstart Our Business Startups Act (JOBS), a measure that includes U.S. Sen. Michael Bennet's "crowdfunding" amendment, easing securities regulations in a variety of ways with the goal of aiding small businesses. Many of us have been pushing for easing the requirements needed for startups to raise initial seed money from the public.

In the past several years, the term “CrowdFunding” has been kicked around. The website Kickstarter is jumped out as the clearer in the space creating a marketplace for startups and users to barter startup capital for products or other incentives, other than equity.

It’s always amazed me that anyone could go to Las Vegas and invest $1,000 on the craps table, yet if that same person wanted to invest $1,000 in a startup, they needed to be an accredited investor, meaning you must make $200,000k a year (for the past 3 years) or have a liquid net worth of $1 million or more. The JOBS Act removes this barrier.

Now for the first time in the United States the average Joe Investor (non-accredited) can make investments based on their income or net worth. Companies will be able to raise up to $1 million in a 365 day period.  There are some requirements we know about already, they include:

• Companies must provide CPA reviewed tax returns or audited financials based on the amount they raise, here is the breakdown:

1. 1. Less than $100K: You are required to provide your income tax returns and have your financial statements certified by your CEO.
   2. $100K to $499K: Your financial statements will need to be reviewed by a public accountant.
   3. $500K to $1 Million: You will need to provide the investors with audited financials.

• Companies must have a defined communication plan to communicate with its investors. Since investors can’t look up a stock symbol to get their news, another plan must be developed.
• No single investor invests more than a specified amount in the offering, namely:

1. The greater of $2,000 or 5% of the annual income or net worth of the investor, as applicable, if the investor has annual income or net worth of less than $100,000; or
2. 10% of the annual income or net worth of the investor, as applicable, if either the annual income or net worth of the investor is equal to more than $100,000, capped at a max of $100,000 invested.

• The websites offering CrowdFunding services must register with the SEC as a Registered Broker or “Funding Portal”.

There are a lot of additional conditions, including background checks on the issuer. For a complete list, check out CrowdSourcing.Org

The skeptics of the equity CrowdFunding bill are concerned with entrepreneurs dealing with hundreds of inexperienced investors funding startups. This is true with anything new. People will need to learn the pit falls of investing in a non-liquid asset.  It will be interesting to see if markets will be started to trade these assets. Who knows what the future will bear?

It will also be interesting to see what happens in the current investor models.  We’ve already seen Angel investors and Angel funds lead in SEED and Series A funding, pushing the VCs to later stage companies. Will companies that use CrowdFunding sites for their seed capital have problems in later rounds of funding from institutional or accredited investors?

The next step is for the SEC to craft guidelines and rules for the law that CrowdFunding portals, investors and entrepreneurs can work with. The SEC has 270 days ( nine months), to make final changes to the regulation.  So nothing will happen until next year.

…Jim

The Power of a Smile

It was a cold, dark January morning. The clock on my truck read 5:32am as I pulled out of my garage for a business meeting over to Portland. Two tons of steel was protecting me from the outside elements, yet I shivered as the ice mist hit my windshield.

My brain needed a jolt, so I headed over to Dutch Brothers Coffee, pulled up to the window, and was greeted with a big smile - “Good morning, what can I make for you this beautiful morning?” I’m charmed by her positive, friendly outlook. The combination of the friendly service and fresh roasted coffee resulted in a great way to start my day.

Can a smile change where you do business? As I drove to Portland I reflected on my own experiences and thought about where I spent my money.

Magazines like Entrepreneur, Fast Company and Small Business have been writing articles covering great customer service for years. I love the legendary story of the Nordstrom clerk who accepted a return of automobile tires from a customer, even though Nordstrom doesn’t sell tires. However, most businesses simply can’t relate to that tale, and never focus on what they can do to improve repeat business. Can it be as simple as a smile?

I used to be a fanatic Starbucks fan. There was a time it was the only coffee cup I would hold in my hand, even if the line was out the door. Then one day I was in a hurry and decided to try Dutch Bros. Coffee. When I drove up to the window I was greeted by a cheerful employee, glowing with a smile - “Good morning, how are you today?” She loved her job and it showed through her bright white smile and bubbly approach. We had a nice chat while she fixed my coffee. In short, we connected.

A simple smile can be a powerful ingredient to creating your customer loyalty program. I tested all five Dutch Bros. Coffee locations near my home and each visit started and ended with a smile. Each was engaging, as if it was an old friend making my coffee. While making your drink they make an effort to connect with you on a personal level by asking how your day is going or to comment on the weather. It’s an enjoyable experience that leads to you looking forward to your next visit.

A smile is just good business. Businessweek’s Carmine Gallo writes about Del Taco, “Walk into almost any Del Taco restaurant and you'll find a counter card promoting the chain's new menu items. On the back of the card, visible to employees, is a reminder to smile and make eye contact with customers.”

Del Taco studied their customers and figured out they do respond differently based on how they’re greeted. Taking the time to make eye contact, greet them and thank them for their business builds customer loyalty. Customers will travel out of their way to do business with people they connection with.

Seventh grade student Mackenzie Westphal from a little town in Missouri tagged along on her mom’s weekly trips to Wal-Mart. On each visit she was greeted to the store by seventy-seven year old Clyde Smith, who prefers to be called “Grandpa” or “Smitty” by the kids and teenagers as they walk into the store. Smitty always took the time to ask Mackenzie how school was going and listened as she caught him up on everything going on in her life. Smitty and Mackenzie connected and as a result Mackenzie never missed the opportunity to go to Wal-Mart, just to see Smitty. One day, Mackenzie decided to build a Facebook Fan page for Smitty so she could meet other people who also adored Smitty. The fan page quickly took off as word spread through the area. 500, 1,000, 2,500 people signed up and shared stories on how Smitty brightened their day with his contagious smile. So many people told Smitty about his Facebook fan page he had to go out and purchase a personal computer so he could read the messages and see the photos they posted.  Smitty’s Facebook Fan page reached 18,000 subscribers before he retired this past January.

Successful customer loyalty programs are often built on a solid foundation of good citizenship. Smitty is a great example of this. He took the time to make his community a better place. He took the time to connect with customers and treated other people, including teenagers, with respect and dignity.

The smile and greeting also has another purpose. It makes you feel welcome to be in their store.

I like to shop at Home Depot and always take my dog, Morgan, with me.

As my dusty truck approaches Home Depot, Morgan starts barking in excitement and can’t wait to get in the store.

As we walk into the store we’re greeted with a smile and “Can I help you find anything today?”, followed by a “Can I give your dog a biscuit?” Almost every Home Depot employee has dog biscuits in their orange aprons. I know this because Morgan seeks out each employee as we walk around the store. It’s amazing to watch her and to see her expression change when she sees an orange apron. Do not ignore the power of positive reinforcement!

Consumers want to connect with business owners and staff. This shouldn’t come as a surprise to anyone, just look at the popularity of social networking sites like Facebook. Marketing staff need to pay attention to this social trend and give their staff the tools and training to create a more “human” business environment.

Dutch Brothers Coffee and their drive through coffee stations took a business challenge of only being able to serve one customer at a time, and turned it into a very positive customer experience, by engaging the customer while the coffee is being made.  Best Buy on the other hand just announced they're closing 50 stores because they can't compete against Amazon and other online retailers.  It begs the question, "What can Best Buy do to connect with local shoppers and earn their loyalty?" I'd love to read your comments on this.

For your business, ask yourself these questions:

• How are your customers greeted? (Smile, eye contact & verbal greeting) 
• Does your staff connect with them on a personal level? 
• Do your customers get excited by the prospect of visiting your business?

Don’t make it harder than it needs to be. Start with a smile and go from there. It worked for Smitty, Home Depot and Dutch Bros. Coffee. Remember, customer loyalty begins with a smile.

...Jim

You could say I’m an old dog in terms of technology. I started my first business in 1986, back when a Hayes 2400 baud modem was the hot ticket. Fast forward 25 years later, president of two public companies (Mustang and Starbase), a couple corporate turnarounds (Web Associates, Starbase and Alchemy) and two startups (Mustang and EventMingle), you could say I’ve earned my battle scars.

For those of you who have been following my blog know, I have recently been working with 7 startups though our VentureBox business accelerator here in Bend, Oregon. Startups live in the constant state of thinking of ways to disrupt competitors and pivot business plans to grow rapidly in order to increase cash or traction. This week, I had a lot of time to think a lot about the differences between startups and well established businesses. One of the questions that came to mind was: “When is it ok for an older company to stop focusing on cash and traction?" I tried to pick my words carefully. Note, I didn’t say stop altogether, I said stop focusing.

Businesses, as they mature, develop large customer bases they have to support. They have infrastructure in place. They have made decisions about their back office systems such as accounting, CRM, work flow, servers, operating systems, technology partners, etc. Next thing you know, years have gone by, you have tens of thousands of customers and 1,000 employees. Cash and traction may no longer be a focus. Every decision needs to take into account, how will it affect my customers? How does the change impact my back office? Next thing you know, your company is not as agile as before and you ask yourself, "How did we get here?"

Each of the turnarounds I led had major back-office issues. Web Associates built web content for HP, Apple and other companies, yet didn’t build the internal controls to track the cost of producing those pages. They assumed we made money because it was a six-figure sale. You can't improve margins if you don't know - to the dollar - what the margin is. Just like in a startup, find metrics you can easily track in a graph.

Starbase’s accounting system didn’t talk with the customer support ticket system, which resulted in customers getting support even if they never actually paid for the software, which resulted in longer DSOs then we had to have.  We couldn't easily inform customers when the defect was fixed by engineering because the CRM app didn't talk to the defect tracking system and version control. These disconnects cost us margin and didn't help us build raving fan customers.

As your business grows, your IT strategy and vision MUST keep up. If it doesn't, your IT costs will erode into your margins resulting in making you less competitive. This can have disastrous effects when you’re challenged by a low cost competitor. Let me put it this way, if a competitor has established a price ceiling and your product or service is similar, then the main weapon you have against that competitor is better customer service and a lower cost basis – through technology innovation. This will allow you to maintain margins if prices move lower. Each time a customer calls or emails support, your profit margin is hit with a cost. Look for ways to eliminate the call or email all together.

When I arrived at Alchemy we were using two different CRM packages because one system couldn't do everything. This resulted in placing orders and registration keys in multiple systems, with a lot of cut and paste. It was awful. It would take 20-30 minutes to enter an order and errors would occur if during the order entry process the rep got a phone call and disrupted them. The previous leadership thought this was acceptable. No one tracked the total average cost per order. No one tracked how many orders went in the system wrong, resulting in unhappy customers and terrible first impressions. These are all costs that need to be faced. If we had a system to enter an order in say 10 minutes, without cutting and pasting, we could process more orders per day, with fewer errors and have more profit per order. Also, consider the cost of training. The more duplicate entry you perform the harder it is to train people to do it, which leads to higher costs and, you guessed it, lower profits.

Which brings me back to the main topic. When you’re in startup mode you’re focused on efficiency. You have to be, you don’t have a large staff. So you look at every single touch point to make sure your UX and work flow is nice and tidy. You look for cloud solutions versus on-premise servers you need to constantly maintain. You look at package software solutions for accounting, CRM and work flow instead of spending time to code it yourself. As your business grows, I urge you to think like an entrepreneur when it comes to your Information Technology and Back-Office needs. Each time a customer calls or emails, ask, “How could this have been avoided?” Conduct annual IT audits and track things like order entry to see how many they enter per day, per person. This is similar to knowing revenue and or cost per employee and tracking it over time, but you're doing it by department or task.

Look at your customer's experience across all functions and see how you stack up with your competitor. For example, if your competitor allows their customers to go online, change their profile, order products or contact support, and you don't, then they're likely doing a better job managing the overall customer experience and business efficiency. 

In my experience, you’re usually competing on more than just price alone. When you’re a startup you spend a great deal of time ripping apart the competition. If it’s been awhile since you’ve done a deep dive, put on your startup hat and give it a go.

…Jim

The work with our startups intensifies this week as we continue to work on Customer Development and The Lean User Experience. As our Founders move closer to defining their Minimal Viable Products (MVP), they have gone out in the market and interviewed potential customers of their products. As a result, some of our startups have made pivots in their business plan.

I like to celebrate these pivots with our startups. We're six weeks into the process, we've saved monthes of development time by not building software no one will purchase. We're learning more and more about their market segment each and every day. One interesting observation is, with each pivot, the founders are becoming even more passionate about their business. I contribute this to the fact the nine founders are going through this together\, and they're gaining positive energy from the team. This is another benefit of an accelerator; you push through the challenges at a much faster pace.

The importance of WHY, before HOW and WHAT.

Simon Sinek, an adjunct staff member of the RAND Corporation, one of the most highly regarded think tanks in the world. He wrote a best seller, "Start with Why: How Great Leaders Inspire Everyone to Take Action". Yes, his principles focus on leaders and the importance of communicating "why". I could write about this topic for pages, but I want to stay on point for this post, so...

Sinek believes you should communicate to your customers: WHY your product/solution matters, than HOW it does it and finish with WHAT it does. We believe most companies do this in reverse. Starting with what features the product has, how it does it so well and finishing with why you should but it.

"Sell to people who believe what you believe." Says Sinek. "People don't buy what you do, they purchase why you do it."

He spoke at a TED talk back in September 2009, it has been viewed by over 4 million people on YouTube.

He does a nice job of explaining his point and connecting it with Geoffrey Moore's Crossing The Chasm principles that help you understand the importance of getting wide spread adoption of your product by the early and late majorities, which is where the "big" sales come from.

Here is his presentation at TED, enjoy!

...Jim

Our VentureBox founders have finished week 5 of our 12-week Venture Launch program. The pitches continue to get better each week.  Feedback is critical to the learning process, so after each pitch we give the founder a breakdown of what we've heard, what worked and what didn't.

TechStars, a popular high-tech accelerator, has a great video series called "This Week in TechStars". This past week they did a breakdown of Flixmaster's pitch.

Enjoy!

I recently sat down with one of the VentureBox startups I'm coaching, and we were reviewing their short term goals, over the next 30 days. They had a lot on their plate; it was time to groom the list. So I asked them a simple question:

Does it create Cash or Traction?

The moment of clarity helped force them into critical thinking. Entrepreneurs need to remain focused on moving the company forward every single day. Time is a scarce resource, use it wisely.

For each decision you face, ask if it will bring your company cash or traction. If the answer is no, then ask yourself why you're spending time on it? Is it really that important?

If you're overwhelmed with your to-do list, give it a try and let me know how it works for you.

...Jim

This Week In Startups - A Damn Good Show!

If you have missed the first couple hundred shows, like I have, don't sweat it. They're all online. I actually subscribe to their iTunes podcast, and have been catching up on them while I hike with my dog Morgan. The last couple weeks have been remarkable, however, if you truly want to have fun, listen to some of the old tapes from 2009 and it will confirm just how fast our tech industry changes.

This Week in... is a web television network covering a wide variety of topics from tech to entertainment. Produced out of our Culver City studios, the shows feature guest experts, founders, movie stars, comedians, technologists and CEO’s — all keeping you up to speed on what’s happening this week with a fast and funny style. Informative and entertaining, ThisWeekIn is the place for whatever your interests may be.

The company was founded by Jason Calacanis (co-founder of Weblogs, SVP AOL, CEO of Mahalo), actor Kevin Pollak and Mark Jeffrey and is based in Culver City, CA.

I've been listening and occasionally watching some of the Podcast and have found them informative, educational, insightful and entertaining. Jason Calacanis is an excellent host with an amazing memory. If you're an entrepreneur or angel investor, especially if you don't hang out at all the startup events, you'll want to catch this show each week.

One of the things I love watching our 9 founders go through our VentureBox Venture Launch program, is the energy they get from each other. As the class finishes week 4 today, it’s really fun to watch the team development among the founders. Each are struggling with many of the same challenges, however since they’re going through the class as a group, they’re managing those challenges better than going it alone.

Don't underestimate the power of the team dynamic in a business accelerator. Even though each founder is working on a completely different product or service, they're all doing it together. No question is dumb, and the answers often apply to each of the startups anyway. So it's all good.

That brings me to Kickstarter. If you haven’t heard or visited this site I encourage you to do so.

What is Kickstarter?

• Kickstarter is the world's largest funding platform for creative projects. Every week, tens of thousands of amazing people pledge millions of dollars to projects from the worlds of music, film, art, technology, design, food, publishing and other creative fields.
• A new form of commerce and patronage. This is not about investment or lending. Project creators keep 100% ownership and control over their work. Instead, they offer products and experiences that are unique to each project.
• All or nothing funding. On Kickstarter, a project must reach its funding goal before time runs out or no money changes hands. Why? It protects everyone involved. Creators aren't expected to develop their project without necessary funds, and it allows anyone to test concepts without risk.
• Each and every project is the independent creation of someone like you. Projects are big and small, serious and whimsical, traditional and experimental. They’re inspiring, entertaining and unbelievably diverse.

What I like about Kickstarter is the fact an Entrepreneur can take their idea and pitch it to the crowd. If the crowd likes the idea, they will pledge dollars for some benefit. When you think about it, this is what Lean Startup and Customer Development is all about. Not wasting your time (or money) on something no one wants. If your pitch sucks, and you don’t hit your pledge goal, then maybe your idea needs additional refinement or ditched all together.

I found Kickstarter to have another benefit. It allows you to browse the thousands of ideas and simply be inspired by the creativity and passion of entrepreneurship. If you’re leading a startup and feel like you’re on an island alone, spend an hour on Kickstarter and I bet you'll get re-energized. 

Every Kickstart begins with some type of pitch, similar to an investment pitch, but you’re not selling equity. Think of it more as an advance sale where you pre-order today for a discounted price or basket of goodies. When the project is completed, you get the item, warts and all of a version 1.0. Most of the time people are asking you to pledge the cost of a nice dinner out, though you can pledge a serious amount if the basket of amenities appeals to you. The power is with the crowd, if many pledge a little, it adds up to a lot.

Here is an example, Tim Schafer is an industry veteran in the software gaming industry. He decided he wanted to publish a classic point-and-click adventure game. He estimates the game will cost $300k to produce (seems low to me). To make things interesting, he teamed up with a video documentation company to film the process for another $100k in costs, bringing it to $400k. You can watch his video pitch here.

So far, 70,630 people have pledged an average of $34.71 for this project, well exceeding the $400k needed for the project by over $2 million!

Here is what a $30.00 pledge gets you:

• The finished game in all of its awesome glory DRM free on PC, Mac, and Linux, or via Steam for PC and Mac, exclusive access to the Beta on Steam, access to the video series, and access the private discussion community.
• HD download of the documentary series with extras, Digital game soundtrack, Digital documentary soundtrack, and all previous reward tiers.

Keep in mind, the more you pledge, the more you get. The full menu of options are available here. For example, $10k get you lunch with the founders, office tour, signed posters and other goodies. As of this writing two people have signed up for this top honor.

Should all startups use Kickstarter to fund their projects? No. It’s not a one size fits all. Should all startup founders consider crowd-sourcing as a funding method? Yes, I believe so. I think it’s good for you to go through the exercise and ask if it's right for you.

At a minimum, I think all of us need to be inspired by our fellow entrepreneurs, Kickstarter.com is a site that does that for me.

Enjoy,

…Jim