Relocating & Redesigning

FOUNDATION BY ROUNDS

foundationbyrounds.tumblr.com

I started this blog here because I was familiar with the platform, but, since I've very much enjoyed writing it, I started looking around for more visually pleasing and easier to use tools this weekend. I found the platform I was looking for in Tumblr, and you will find my writing there from now on.

Instilling Creativity

Jeff Carter - Hyde Park Angels

Can You Build Creativity and Innovation Into Your Company?

(original post from Carter's blog)

Innovation is a widely acknowledged problem area for large organizations. Countless books and articles have been written on how to maintain the innovation that brings a company to life, and many solutions have been suggested. Eric Ries goes so far as to suggest large organizations create micro-startup divisions to drive innovation that are insulated from standard oversight. Most people don't go this far, and simply suggest that we build incentives for experimentation and, to some extent, allow for an enlightened model of failure that doesn't punish employees who think outside the box.

In this post Carter refers to a Harvard Business Review article on innovation within corporations (which references this academic paper) to make the following points:

1. Provide financial incentives for new ideas that are implemented
2. Work in small groups
3. Give feedback on ideas that are used

And, Carter adds, don't criticize failure.

Carter's conclusion: This is how you drive innovation in a company, large or small.

Takeaway: Financial incentives to new ideas add a new level of gravitas. When people realize they're going to be taken seriously, they put more time and effort into an idea before presenting it to leadership. Small groups and quick feedback loops allow for a higher level of information gathering and adaptability, which drives innovation. And, finally, while failure itself is not good, it should be allowed when prepared for adequately. 

Funding: Is Money a Commodity?

Jeff Carter - Hyde Park Angels

Can The Wrong Investors Screw Up Your Company?

(original post on Carter's blog)

An angel investor, Carter has significant experience with early and seed stage ventures. In this post he addresses a tough issue in the startup world, "Who should we accept money from?". This is a difficult question, especially for first time entrepreneurs with little or no knowledge of how funding should work.

Key Points:

• Some people say that money is a commodity; that it doesn't matter where it comes from. I disagree.
• Especially at an early stage investors should bring value to the table as mentors.
• Beware of investors that may exert too much control over the venture.
• Don't court any single for too long (more than a couple months).
• Are they ethical?
• Research their involvement with other companies.

Carter's Conclusion:

Be aware of who's money you're taking. Intuit once took a lower valuation from one VC instead of getting a higher valuation with another because they felt that the first was a better mach for their culture.

Takeaway:

When you get involved with an investor you need to be aware of what the relationship is going to be like. Money always has strings attached, and that can be a very good or a very bad thing. Ideally you will be able to find an investor who understands the company and has a vision for it that aligns with yours. Always do your best to understand the relationship you'll have with an investor before you take their money.

Dapps, Crowdsales, and App Coins done right

William Mougayar

Best Practices in Transparency and Reporting for Cryptocurrency Crowdsales

*Mougayar recently wrote an article on the frail bitcoin startup ecosystem. This prompted a response from Fred Wilson in which he references Perez's innovation framework of surges and crashes. In this 3rd post in the series Mougayar clarifies his position and provides particular insight into the world of Dapps (distributed applications) and the modern crowdsale.

Assembly is currently, I think, headed in the right direction for pioneering the practical future of Dapps/DAOs. The system works by assigning valuations in App Coins (essentially equity) to particular tasks for the public to accomplish (i.e. designing the logo, building the backend, etc). I think there's a pretty huge legal grey area here that will likely need to be addressed at some point. For now, go check it out, it's REALLY cool, and there are lots of products that could use some assistance. 

(original post on Mougayar's blog)

Key Points:

• DAO's would probably be considered companies under today's law, even if they don't fit the definition perfectly.
• Before Funding: White papers are cool, but they tend to be weak on implementation details. To gain credibility organizers need to:
• communicate implementation details to the community
• outline credentials and experience of the founders
• essentially: build a public pitch deck
• During Funding: This is the mechanics of the crowdsale itself. Here we address the issuing of tokens, wallets, shares, etc.
• An independent foundation, not the founders, should handle funds.
• Be transparent. Natural virality is best. Be transparent.
• Development: The scary stage when the company goes dark for a year and builds the product they claimed they would.
• Issue monthly transparent reports that include everything.
• Blog posts are good if they have substance
• Link between token and value of Dapp needs to be very clear
• begin thinking about system partners
• Market Entry: In spite of the name, you're not going to be autonomous yet.
• Development should have prepped you to some extent for this stage, but you'll still need to be involved in a guiding role at least.
• You need profits for this to work

Mougayar's Conclusion: This blog post is primarily directed at those individuals currently involved in crowdsales, premines, and the like. You need to be careful and aware of the impact your actions have on confidence in the market and in the broader economy. What you're doing is essentially making yourself a public company from day one, and that's no easy task.

Takeaway: While this post is directed at those already involved in the system of crypto-crowdsales, it should serve as a lesson to all entrepreneurs. We need to be as open as possible with all those involved in our endeavor. Whenever someone invests something in your venture, be it time, money, code, whatever, you are obliged to provide them with an open look into your stewardship of their resources. As a startup, be open with your investors. As a premine or crowdsale project, provide clear progress reports to your backers. As a public company (essentially what these crowdfunded projects are), be open with everyone. Be honest, be humble, work hard.

How (and why) to Make a Phone Call

Mark Suster - Upfront Ventures

It’s Sofa King More Effective to Pick up the Phone

Suster joined Upfront Ventures as a general partner in 2007. Prior to that he was an entrepreneur (twice) and sold his most successful venture, Koral, to salesforce.com. In addition to his VC work, Suster mentors at Techstars.

Key Points:

1. Millennials hate phone calls. They prefer the ability to asynchronously pull together thoughts in an email.
2. Text is tone deaf. Phone calls are effective in conveying meaning and emotion.
3. Here's how to do a phone call right:
• Prepare - know your key points and the reason you're calling
• Banter is good - Base the amount on the person you're calling.
• Let them know why you're calling - "Listen, the reason I called is..."
• Don't "hang yourself" - Don't talk so much they lose focus and start writing an email.
• Ask questions - Keep them engaged, but don't be an interviewer
• Take notes - Especially important in negotiations
• Seek understanding first in tense situations - Listen, understand, then speak
• Don't be long winded - You'll have a harder time scheduling calls if you're known to be a time sink.

Suster's Conclusion:

Stop hiding behind emails when you should be calling people. Calls are a tool that allow for another layer of communication, and you shouldn't neglect them.

Takeaway:

My generation has grown up with instant text communication as the norm. The abruptness of a phone call makes us uncomfortable when we're so used to being able to carefully craft our communications before we send them. The level of interaction that vocal communication provides should not be neglected. Emotional cues provided vocally help us better understand the people we interact with, and Suster's checklist (#3 above) does an excellent job of preparing people who may not be used to phone communication for doing so effectively.

Why Founders shouldn't care about NDAs

Jeffrey Carter - Hyde Park Angels

No Angel Investor or VC Will Sign an NDA

Carter is an experienced angel investor who helped found Hyde Park Angels group. He blogs primarily on politics, economics, trading, and finance. In this post he explains why, as a startup founder, you shouldn't care too much about getting an NDA from a potential investor.

Key Points

1. NDAs take too much time. While you're spending your time going back and forth revising the wording of a legal document so you can talk to an investor, your competition is beating you.
2. It isn't practical for an investor to maintain legal documents on every company they listen to
3. An NDA isn't the only thing that will keep people from stealing your idea

Carter's Conclusion:

Early stage companies are about execution. Who can take their idea from brain to seed stage? Then, who can get it from point A to point B and so on. Those people win the race while the NDA people are waiting for investors to sign.

Takeaway:

A company that is in such an intense competetive environment that they can't speak to anyone without an NDA would be wiser to spend the time beating their competition. Almost all NDAs are too far reaching to be reasonably signed on the first draft. VCs don't want to tarnish their reputation by violating the interests of a company they've met with, so they're pretty much pointless anyway.

Don't waste your time. Don't waste an investors time. Focus on execution, not legal issues.

The Frail Bitcoin Startup Ecosystem

William Mougayar

The Bitcoin Ecosystem is Fragile: Beware of the Next Crash

Mougayar is a serial entrepreneur (over 30 years of experience) with a lot of investing experience. He blogs frequently on various business topics at startupmanagment.org. 

(original post on startupmanagment.org)

Key Points:

• Bitcoin startups could bubble and pop in the same way internet startups did.
• Crowd sales/pre-mines/pre-sakes are too risky.
• Startups: Be responsible. under-hype and over-deliver
• Investors: fund dreams, not lies
• Consumers: be educated and follow those who have done diligence
• Media: research, research, research. Know the space before you publish.
• Everyone: Be careful.

Mougayar's Conclusion:

Be wise. Don't get caught up in unreasonable hype. Don't invest in products that don't exist. Work hard to build great things and educate others.

Takeaway:

As in all things, remain level headed. The crypto world is one in which it is easy to get caught up on an awesome new idea or technology that isn't really something we can make happen yet. In all aspects of our lives and careers we need to do out best to be informed and not get carried away by ideas that don't have any substance.

Take care. This isn't a gold rush, but there will be a few gems to be found in due time.