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Author Archives: T.A. McCann
Today Oracle Team USA won the 34th Americas Cup, staging one of the biggest comebacks in sailing, and maybe sporting history, fighting their way back from an 8-1 deficit to win 9-8 in the best of 17. It was an amazing success and show of skill, engineering excellence and perseverance, all things that go into a building a successful start-up.
I know both sides of this scenario, as I was part of the winning AC team in 1992, (America3) and my last technology company, Gist (acquired by Blackberry in 2011) was considered a solid win in the startup world. I see many parallels between these wins and the Oracle victory.
Start with a vision
When you enter the AC, you need a solid vision and strategy on how you think you can win. This usually starts with a hypothesis on the key areas of innovation on which you can create an advantage. In sailing, this could include boat design, sail design/construction, weather planning, computer modeling, crew selection…and a host of other potential ways where successful innovation will create speed. For example, in 1992, the team had a hypothesis that we could literally invent a new kind of sailcloth, made of carbon fiber that would be significantly lighter and stronger than then current standard. As we look at this year’s AC72s, there were lots of areas of potential innovation with a new class (catamarans vs. monohulls), new sail types (wings) and even different types of sailing altogether (foiling). And, in startups, you have the same approach; picking a market, considering competitive advantage or innovation and creating a hypothesis around what you might build and the edge it will create over your competitors. In Gist’s case, we believed we could build a better contact manager, by connecting to your email inbox and using that to help define your most important contacts (people you email a lot). And, using that list, we could surface important and relevant information about them from news, blogs and social content. We believed this would be valuable for business professionals the world over, all a vision and a hypothesis at the beginning.
Build a great team
With a basic strategy and set of ideas in place, you go about finding the best people and experts in the world to design and execute. This usually involves engineers, and the best ones are in short supply or are being snatched up by your competitors. For any of you technology execs, sound familiar? In the AC, the pool of people is smaller and with the new catamarans and wing sails, expertise is even more limited than normal, so the competition for the top talent was pretty fierce. Oracle had a big advantage, as they knew more about the rules and guidelines before everyone else (the advantage of the Defender) so they were able to snap up the best talent and get to work on building stuff. Once you have unique talent, it’s harder for the other guys to innovate in the same ways. Who you hire and when will be a critical factor on which things you can build and how quickly you might create an advantage.
Get solid funding
To win the AC, it takes a pretty big pile of cash. By some calculations, Larry Ellison invested over 100M dollars to win and we invested over 40M in 1992. That money enables recruiting for the best talent and lots and lots of experiments. Like venture capital in the startup, capital allows you to tryout many areas, thus increasing the chances of a breakthrough. Same same. And, when you get good VCs involved in your deal, like I had with Paul Allen and Brad Feld, you gain confidence in hiring, in investing, acquiring… where you can to create gains. I knew, that if we needed more cash to pursue some crazy ideas, we had their support.
Test and iterate
Most people only see the end result of the work, the event itself or the exit. What they miss is the months or years of grinding it out, working toward a solution. In startups, this is usually thought of software development, broken down into small iterations, we call “sprints”. In these sprints, the team picks a focus area, innovates as much as possible and then “ships to production”. In some areas, it takes many sprints to get to the full extent of and idea realized, but you approach it in small, focused chunks. In the AC, this is the testing phase, which can last years before the event. We (or the team managers) pick an area of focus (say the design of the keel/dagger boards). We set up 2 boats (A/B) and we try different combinations to see which ones are faster. To be accurate, the sailing team needs to keep as many of the other variables constant (wind, waves, sail trim, concentration…) to get to a result of which keel/dagger board is actually better. The decisions are aided by lots of computer monitoring and number crunching, but it still takes the teams focused on every test, for weeks on end to make the most efficient progress. This is just like sprints and A/B testing in software development. It takes “focused persistence” and a special breed of stamina and attitude.
Make big, hard decisions
Along the way you need to make lots of decisions. Did we test this variable enough? Can we move on? Did the other guys make better gains in this area? Can we afford to make another attempt and try something totally different? Deciding what experiments are yielding early and potentially game changing results and which ones to cut/kill is a very difficult. Experience, intuition, pattern-matching and a solid team all play into making these decisions quickly and in a way that the team supports. Some are likely wrong or made too early, but the teams ability to make hard calls and unify around common goals and to charge forward with confidence is crucial to success. In 1992, we had lots of hard choices, setbacks and rebounds. For Oracle, they made a hard choice to change tacticians late in the game, but you could see the team (at least on the water) did not lose a beat, stayed focused and pushed on.
Learn from your competitors
Every good market has worthy opponents who, in their own way, are attempting to lead. In some cases, you can determine where they’re focused and what success they may be having. In other cases, it is very hard until you get to the starting line. My latest startup, www.rivaliq.com is all about learning from your competitors. During this AC, New Zealand came out with an edge. They’d been the first to really figure out “foiling”, especially when at maneuvering the boat. This was a design and boat handling innovation and they were fast. They won 6 or the first 7 races and took a commanding lead. Most, including me, thought the lead was insurmountable. Oracle went to school, studied what the Kiwis were doing and improved, changing their boat and their handling. They got better every day and by the end, were significantly faster than Team New Zealand. A team of lesser character or skill could have given up or given in, but they stayed focused and kept refining. A common trait of great companies, they watch and learn, always improving and outlasting their competitors.
Update (9/30/13) Here are more details on what Oracle may have changed on the boat. Very smart - http://www.yachtingworld.com/blogs/matthew-sheahan/535348/america-s-cup-what-was-changed-on-oracle#lGobZYfDZ42bHg0e.99
All the planning and skill is important, but to be really successful, some things just need to go your way. During this AC, several days of wind limits (too much wind to sail) gave Oracle more time to modify-race-test-modify the boat with only one (vs. scheduled two) race per day. They got faster. And, on day 13, New Zealand leading 8-2, needing only one win to clinch victory. They were leading by a wide margin, the wind died and they couldn’t finish the race before the 40 minute limit. Seriously, that sucks? Lucky for Oracle, devastating for New Zealand. It was a key turning point in the regatta. When we sold Gist, there were many fortunate circumstances that aligned to make it happen, many of which we didn’t control. It involved a good deal of luck.
While my experience is correlated to doing a startup and winning the AC, Larry Ellison knows many parallels as well, referenced here in a solid article in Forbes and detailed in the most recent book The Billionaire and the Mechanic. I sailed with Larry and the team on Sayonara too and he is an intense competitor. He and the other members of that team made huge sacrifices, personal and financial and put it all on the line in an attempt to win. It often takes that same commitment from the entrepreneur and the teams to make it happen when it looks like it won’t work, when the vision will fail and all the work for naught.
At the end of the day, it is about creating something so good, so fast that, even if you switched the crews, your boat (or company tech) would still win as we did in 1992, with Gist in 2011 and as Oracle did in 2013. It’s exciting to be part of the history of the AC (winning and losing) and to be part of the lore of successful startups too. I am fortunate, committed and sometimes lucky.
Congratulations Larry, everyone on Oracle Team USA and to all the successful startups who are demonstrating focused persistence toward victory!
In a startup, you are always racing against a clock. Most of the time this is “when are we going to need to raise more money” but can also be working toward key milestones or trying to outpace key competitors, which is often when you need to raise money. And, as you racing toward these milestones, there are lots of things the team needs to track and measure, many of which relate to one another. For example, if you need to raise money, you want to show a ramp in new users/customers, which is usually fueled by an earlier marketing tactic or key product update. So, you need some form of a “startup calendar” that allows you to look ahead as well as track your progress toward the metrics that matter to the company and can be correlated over time. I have developed a lightweight Google Doc as a start to this process and am using it actively in our latest company, www.rivaliq.com (the best way to analyze and monitor your competitive landscape). It is an open Doc, so clone it, add to it, react to it and help me make it better.
Pay attention to time and make measured progress!Read More
First, happy valentines day to everyone and their partner, and a special one to my love, Teresa.
It was 2 years ago to the day that we closed the deal and sold Gist to Blackberry (Research in Motion at the time). As an entrepreneur and a team, we had set out to build the best social address book ever made and wanted to get our vision to the most people we could, as fast as we could, which was our primary motivation on selling the company. The team at Blackberry understood what we had created and where we wanted to go and that was pretty exciting. That said, there were (and still remain) plenty of challenges on the RIM front, but we all dug in with a hope to make Gist the core of a native Blackberry address book. Over the last 2 years there have been many changes including a total re-org and exit of the people who bought us, a change of CEO and many of the senior managers of the company, tons of hard layoffs, and the development of an entirely new operating system, Blackberry 10, which finally launched on January 30. During much of this turmoil, our team remained focused and lead the development of the Contacts app, which has many of the core features of Gist including rich social profiles, most recent updates, company news about a contact and deep integration into the inbox and calendar. While a few of the lead features of Gist (aggregate newsfeed about all my contacts, contact ranking, and the daily digest…) have yet to surface, we are all extremely proud of the work we did on Blackberry 10 and I think its hands-down the best mobile address book on any platform. In addition, many of us have taken on larger roles at Blackberry with me leading the social applications including Blackberry Messenger, Facebook, LinkedIn, Twitter and IM and Steve Newman (CTO) taking on identity (Blackberry ID), analytics and even Maps for the whole Blackberry platform. Some of the team have moved on to start their own companies, take important roles at other tech companies but the team that’s remained has had a big impact on the development process (more agile, less waterfall) and culture at Blackberry (empowerment, “freedom with responsibility”, self-direction, beers in the fridge and lots of ping-pong). It feels good to have started and sold a company where our investors did well, our team did well, the acquirer got good value and we remained motivated and generally happy throughout and we got to realize much of our vision. Like many things at big companies, that take much, much longer than they should or would at a start-up, it is gratifying to see many of our best laid plans play out. I want to again thank the Gist team, our investors Brad Feld and Steve Hall, the team at Blackberry and most importantly the users of Gist and Blackberry who believed in our vision and helped many dreams come true.Read More
I just finished reading Brad Feld’s latest book, Startup Communities. While I encourage every entrepreneur to read it, it is even more important for anyone who wants to make their city better, more fun and creative by driving a culture of entrepreneurship and startups. There are lots of great anecdotes and examples from Boulder (where Brad lives) and other communities, but the most important lessons for me really boils down to taking action. It’s about the people in each community who invest their time and effort to start things that help entrepreneurs connect, share ideas and support each other. These people take initiative and act in ways best described by the Techstars Mentor Manifesto. I am lucky to be part of the Seattle scene and there are lots of people who are making our approach unique and valuable, so I say “thanks” to them, can I get an alleluia. Everyone plays a part but I wanted to call out a few people who’ve had significant impact on me and inspired me to do more.
- Andy Sack – Techstars – for bringing the program to Seattle, for fighting through cancer to keep it on track and for continued support of the process of starting new companies
- John Cook and Geekwire – for telling the world what we are doing and amplifying our messages
- Geoff Entress and Andy Liu – for often being the first people to write checks and inspiring us all to support companies with effort AND money
- Connie Shaw – University of Washington – for connecting the students- faculty and startup community and driving entrepreneurship into every corner of the U
- Marc Nager and the Startup Weekend crew – for making it easy for everyone to get started, learn on the job and for spreading those ideals across the globe
- Luni Libes – Fledge – for making us think harder about how we measure impact and social responsibility and making companies that really matter
- David Nilsson – EO Seattle – for bringing entrepreneurs from all areas together to get smarter and more connected
- Rand Fishkin – SeoMoz – for teaching us how you run SeoMoz and inspiring us all to be better leaders
- Brad Feld and Foundry Group – for writing it all down, investing in leading companies here in Seattle including Gist (mine), Cheezburger, Big Door, SeoMoz…and for putting the entrepreneur first.
As part of the community and someone who has benefited from all your hard work and commitment, I say “thank you”. We are better because of you!
image credit: http://hrfishbowl.com/2011/11/thank-you-yo/Read More
Tomorrow is Demo Day at TechStars Seattle and the teams are readying their pitches for a group of prospective investors. Following Demo Day, the pace of courting and closing investors will be super fast. Here are 7 tips/actions I have been giving the teams to prepare for an effective and quick fundraising.
- Create a Dropbox with all of your materials. As you get solid investor interest, create a copy of the folder and share it with prospective investors.
- Powerpoint of your short (6 mins) and longer (60 minute) presentations (if you have a video pitch, include it as well)
- Product summary, features, roadmap… get the investor excited about what you are building
- Team background – includes the team bios and social profiles…help an investor get to know you better
- List of current/previous investors, mentors, advisors and contact info – they want to know who else is supporting you
- Customer/User testimonials/profiles – the voice of a customer is very powerful. Show photos, bio info, how they found out about you, how long they have been using the product…If the customers are open to being a reference, note that as well
- Other supporting docs – this may include market reports, press mentions…anything that helps support your perspective on the market and/or size of the opportunity
- Funding docs – term sheets, closing docs…(ask your attorney) – once you get investor interest, you want them to have all the docs they need to review
- Create an FAQ (frequently asked questions) – most investors will ask the same questions, at least to start off, and you should create tight, formal answers to these questions. Have them in a doc so you can respond quickly (likely in email) when you get asked. Include data and specifics where you can. If you get the same question more than 3 times, create a solid answer and write it down.
- Develop company profile pages. You want to make sure users, investors, potential employees… can find you easily.
- Develop a target investor list (Gdoc, spreadsheet) – Fundraising is a sales process and you should have a solid list of prospects. The more focused you can be on who (best investors for your space, stage…) and why (because you are like X where they made money before) they should invest, the better. Here is an example spreadsheet to get you started. Make notes in the spreadsheet or you can use some lightweight CRM tool like Yesware (built right into Gmail).
- Develop a kick-ass summary to be used for email introductions to potential investors. This is likely 2-3 paragraphs, like an elevator pitch, but should be really dense with market data, progress/traction, links to the site, team credibility…Your advisors will use this to make intros.
- Refine your “use of proceeds” pitch and supporting documents. How will you spend the money? How long will it last? What goals do you expect to achieve by the next time you will need to raise money? Most of your spend will likely be for people/headcount, so consider when and who you will hire and their impact on the burn-rate. If you have significant areas of additional spend (e.g. marketing) be as specific as possible about what and when you plan to spend. Investors want to know what they are “buying” into.
- Mobilize your supporters (key influencers, investors, advisors…) to promote and accelerate the momentum. Make it easy for them to take action. Ask them (via email) to;
- Follow, Promote, Share… your social pages, especially Angel List. This will add credibility to your company and build awareness
- Add data and ideas to your Investor list
- Make direct introductions to potential investors
Bonus tip – send regular updates to your “team”. As you close important investors, team members, advisors…keep the momentum going by keeping everyone informed. Good luck!