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January, 2010

  1. Dear Startup Lawyers, Please Blog.

    January 30, 2010 by Matt Mireles

    As an entrepreneur, I've long been befuddled by the utter lack of transparency and overall opacity of the market for legal services. From what I understand, this is how the VC world was just five years ago. And then guys like Fred Wilson, Chris Dixon and startups like theFunded popped up and changed the game/disrupted the model. 

    The legal/startup world? Well, there's the Startup Lawyer and the Startup Company Lawyer (very creative naming, btw). And they're useful enough resources, I guess. They cover technical matters well, or so it seems, but they don't have a whole lot of personality. And as an entrepreneur, I want not only focused technical info but also big picture analysis and creativity. That's what's gonna draw me back and make me read the RSS feed on the regular. I've never seen a law firm do this. And if you're Wilson Sonsini, you probably don't need to. Startups find you.

    But if you're a brand new firm trying to represent startups, this represents a huge opportunity.

    If you blog about startups & related legal/corporate issues in a way that is smart and thoughtful, then folks like Fred & chris & others will link to you or retweet your posts. This will earn you credibility and make guys like me more likely to seek you out. Sure, it will probably increase your overall client flow as well (and maybe you can hire more lawyers cuz the good ones will self-select and seek you out cuz you're doing something cool), but you'll be able to pick/choose the best of those. 

    Also, meeting clients at non-standard locations (and announcing it publicly) is a great way to make yourself approachable and cool. Not only will this be fun for you, but it will attract young founders who hate/are scared of lawyers.

    Think of it as the freemium model applied to law: you use your blog to give away a little bit of your brain power, and in turn it creates demand for the premium version, your actual legal services. Again, think of how Chris & Fred's blogs affect their respective investment activity.  Smart people who do their homework self-select and seek you out.

    If you're gonna do this, there's blog that should be on your radar: VentureHacks.com. Very awesome. If you decide to blog, make it your goal to get on Venture Hacks radar.

    If you do this right, the best clients and talent will find you––and you'll be able to grow both your revenues and partner-base. I'm just shocked it hasn't been done already.

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  2. The Apocalypse Startup: A How To Guide (Part 2)

    January 26, 2010 by Matt Mireles

    I founded SpeakerText during the financial apocalypse of October 2008. We launched the company in January 2010 after burning through just $4k of our cash reserves, the bulk of which was a loan from my dad. Along the way, I learned a few things that I hope other founders and even proto-founders will find useful…

    • Sell the Vision, Not the Reality. You may or may not have a working product. Your product may or may not suck. But that doesn't matter. What matters is your vision of what the product will be and how it will change the world. That is what gets people excited. That is what will make people work like dogs for no money and drop everything just to get a product built.
    • Treat everyone you hire like a co-founder, but try them out first.  In normal jobs, people put up with a lot of grief and bullshit because they're getting paid to do so. In a startup, you don't have that option. Treat people well, be honest, and don't bullshit them. Trust is all you got. That said, don't promise equity upfront. Specify some sort of trial period where the person is to accomplish a specific, delineated task. Make sure you own all the IP created during this trial period, and make no promises for later. After the month or so is over, then sit down and talk equity. 
    • Yammer is a great tool for fostering camaraderie on distributed teams. Use it.
    • Raising money is a waste of time: First build something people want. The word for "visionary investor" is "entrepreneur." If you're an unproven schmo like me, people generally––and investors in particular––will laugh at you and your silly idea. It will take 6 months if not more to raise money, and in the meantime, someone else with your same idea will probably build and launch your product. (If you're a former Google VP, then you can probably ignore this tidbit.) The only––and the strongest––track record you can have is the product you've built and the market feedback you've gotten.
    • Need legal advice? Do the Lawyer Hop. Every lawyer will give you an hour of their time for free. Remember that. Need 10 hours of legal counsel? Talk to 10 lawyers. Need to learn about IP, patents, etc.? Call a patent lawyer! More questions? Call another one! Don't feel the need to restrict yourself to a local geography. You can call up America's leading legal luminaries and get an hour of their time for free, every time. This won't work for producing legal documents, but it will work for fundamental questions of "is this legal?" "do I need to patent this?" etc. Also, different lawyers have different perspectives, so the lawyer hop a good way to get a holistic, composite understanding of a particular issue. Plus, when you need to actually hire a lawyer, you'll know what a good one sounds like––and have a fat rolodex of people you've already talked with to draw from.
    • Patent lawyers always say yes, except for the good ones. Most patent lawyers, it turns out, are not technical geniuses. Asking them, "Is my invention patentable?" is like asking a car mechanic "Does my car need any work done?" Unless you find a good one, the answer will always be yes. That's how they make their money, but not how you make yours.
    • Persistence and determination alone are omnipotent. A lot of people "start" companies, but very few actually have the tenacity and drive to bring a product to market, hire people, etc. People will expect you to quit, and part of how you will impress them is by simply keeping at it, iterating your idea/product/vision, and making progress.

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  3. The Apocalypse Startup: A How To Guide (Part 1)

    January 25, 2010 by Matt Mireles

    I founded SpeakerText during the financial apocalypse of October 2008. We launched earlier this month after burning through just $4k of cash, the bulk of which was a loan from my dad. Along the way, I learned a few things that I hope other founders will find useful…

    • Fake it ’till you make it. No one is interested in the company you’re going to start. Starting is a declarative act. Just go for it. People won’t follow unless you lead. 
    • ‘Stealth mode’ is a disease. Rid yourself of it. The difference between your initial idea and your ultimate product is the difference between a slab of rock and the David. There’s a thousand problems you need to solve, and the only way you learn about them––much less solve them––is to pitch, pitch, pitch and pitch again to every smart person you meet. Listen to what they have to say and regardless of how jumbled and contradictory their suggestions or complaints are, try to look for patterns and distill the deeper underlying pain points or problems with your model. Think of it as crowdsourcing. The masses have much to teach you, if you let them. 
    • Advisors, they’re easier to find than you think. This goes along with my above point about pitching everyone you meet. Most people with big ideas are afraid of embarrassing themselves, so they keep quiet, especially around successful, important people. Don’t. I landed my first advisor, Joe Kennedy, the CEO of Pandora, when I pitched him after he gave a talk at Stanford. He gave me his card; I followed up. I never wasted his time, but I was persistent and, most importantly, I listened and kept him updated on my progress.
    • You need a Co-Founder, not just a CTO. Lots of business-y, idea-type people who say they’re looking for a co-founder are, in reality, looking for an “engineering bitch.” Here’s how the pitch sounds from the engineer’s perspective: ‘For ten whole percent of equity, you will slave away to build a prototype of my bad idea, not have any say in the decision-making process…and oh yeah, you could be fired at any point.’ This does not make for a happy long term relationship. Instead, find someone you know and trust––I called up an old college friend––who will call you out on your bullshit and push back when you overreach. And split the equity equally. It just makes life easier down the road.
    • Recruit college students. They’re young, hungry and don’t need of a living wage. Experienced, talented software engineers have lots of options in life, and most of them involve getting paid. College students, on the other hand, have fewer options, and probably have their living expenses covered by financial aid. Thus, your startup is more like a resume-enhancing ‘extra-curricular’ than a regular job. The right person will love the responsibility you’re handing them. Win-win.
    • Go to job fairs. You’ll be the only startup there. I went to the Columbia Engineering Career Fair in October 2009 and left with ~150 resumes. We hired three guys from that batch and paid them in iPhones. Doubtful we’d have access to such a rich employee pool any other way. 


    Tomorrow: Dealing with lawyers, Vision vs Reality, and more.

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  4. Nepotism at Union Square Ventures?

    January 24, 2010 by Matt Mireles

     Fred Wilso Andrew Parker USV
     
     

    I made a disturbing discovery this week: Fred Wilson, Managing Partner at Union Square Ventures, has hired his very own son to work there as an Associate. As the pictures above show, the two are clearly related, although for some reason Fred's son goes by the name "Andrew Parker." Perhaps he's simply an illegitimate child from Fred's fast-swinging early years. Despite failing to acknowledge him as offspring, it's nice to see that he is helping the young man out. 

    I wonder what Gotham Gal thinks?

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  5. How to raise money without lying to investors – Venture Hacks

    January 24, 2010 by Matt Mireles

    VCs and entrepreneurs collaborate to lie about the future

    Instead of bringing entrepreneurs back down to earth, some investors push them further into orbit. Some VCs ask a seed-stage, pre-product startup for a detailed five-year financial plan. When I was a partner at Polaris Ventures, I saw many of these spreadsheets built “for fundraising purposes.” We didn’t ask for these spreadsheets — entrepreneurs had usually built them after meeting other, less early-stage, investors.

    I find the process of planning — and understanding how a founder thinks about a business — educational and valuable. But pushing the exercise to the point of assumptions layered upon assumptions is not just wasteful, but dangerous, because it sets the wrong expectations.

    After a few pitches, entrepreneurs realize that the distant future is safer territory than the immediate. It’s easier to boast about 30 must-have features your product will have in three years, than to show the three must-have features in the current prototype. It’s easier to talk about how you’ll recruit world-class CXOs when you’re big and successful, than to show a detailed plan for bringing in an amazing inbound marketing specialist, when everyone on the team is getting paid below-market rates to conserve cash.

    via venturehacks.com

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  6. Wanted: NYC Startup Job Fair

    January 15, 2010 by Matt Mireles

    UPDATE: My prayers have been answered! There is now an official NYC Startup Job Fair happening on Friday, April 9th at the AOL HQ, 770 Broadway. It is hosted by the NYC & Columbia Venture Communities. 

    After last night's Hackers and Founders event, I went out for beers with founders from Udorse, GoodCrush and TrustCloud at Stand in the Village. Eventually, we got to the subject of finding talent, which has turned out to be a bit of a recurring conversational theme and profound pain point for other founders. 

    At SpeakerText, fortunately, we don't have this problem. Back in October 2009, I paid $300 to attend the Columbia Engineering Career Fair, via a discount hooked up by my peeps at the Columbia Venture Community. Best $300 I ever spent. 

    I showed up halfway through the job fair in a jeans and tshirt with a couple hundred printouts of my grand SpeakerText product vision manifesto (with sections entitled "How SpeakerText changes the Internet" and so on) and setup shop between a couple big name engineering firms. Within seconds, I had people lined up at my table. Within an hour, I was totally swamped. I left 5 hours later with ~150 resumes. 

    Within a month, we hired two hotshot college kids to freelance for us as developers, making it totally clear that we were a startup and had close to no money. For compensation, we bought them iPhones. 

    Earlier this week, we hired another engineer from that batch to revamp our search index. He is a Search/NLP genius with an MSc in Computer Science from Columbia. We are getting him an iPhone. 

    The key, however, is that if the person works out, we'll happily give them equity on extremely favorable terms (acceleration clauses, etc.), as we are about to do now with one person. But no promises.

    Anywho, the real point of this post is that New York City needs a Startup Job Fair where Hackers, Founders, Proto-Founders, and Startups can find each other. And it needs to be hosted at and sponsored by a major university (*cough* Columbia). It should include the usual tables and resume distribution, but it should also include a stage where startups can demo and founders can pitch. It should be at a venue large enough where both of these things can happen simultaneously. And it should be backed by a syndicate of NYC Venture Capital Firms so that startups can afford to get a table without breaking the bank. 

    Do this twice a year––say at Columbia in the Spring, at NYU in the Fall––and watch the startup ecosystem explode.

    Disclaimer: I want NYC to overtake Boston and one day rival Silicon Valley as a Startup Hub. Entrepreneurs are my people. New York is my town. 

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  7. SpeakerText Lets You Watch Videos and Read Text from Videos

    January 13, 2010 by Matt Mireles

    I can think of a few ways that I could utilize SpeakerText. The site allows you to watch videos from YouTube and easily find what they're saying within the video, since it gives you a transcribed copy as you're watching it. Let's say you're checking out one of the recent keynote speeches from CES on YouTube and want to grab a quote. Easy, peasy.

    Just play the video and pause at the moment you want, or find the words within SpeakerText that you need. You can use the SpeakerText transcription to move backward and forward in the video and even highlight the words in SpeakerText, copy, then paste them in your blog. The hyperlink will then take your readers right to that moment in the referenced video. It's a cinch to use and is really great for bloggers, teachers, students, or anyone who has a hard time hearing what folks are saying!

    via www.geeksugar.com

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  8. Reflections on a Decade

    January 12, 2010 by Matt Mireles

    Ten Years Ago today I just had just turned nineteen. With a single semester at UC Berkeley under my belt, I was unsatisfied. I was still a virgin, but goddamnit, I wanted adventure.


    And so I dropped out. That was probably one of the most important and best decisions I made in the past decade.


    More than anything, dropping out set a precedent: I would live my life how I wanted to live it, not how others expected.


    It’s been a scary, fantastic ride ever since.

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  9. This Moment in History: Unprecedented Leverage

    January 12, 2010 by Matt Mireles

    Today was an exciting day, as we (the SpeakerText team) spent the morning getting interviewed by New York Magazine for an upcoming feature on the New York startup scene. After the reporter left, I thought a bit about some of the stuff I'd said and sent her the following in an email. I thought I'd share…


    Just to re-iterate: I think we're at a special moment in New York and perhaps human history. The world, the economy is changing. Wall Street is shrinking. The media is undergoing a full-blown metamorphosis. People's faith in the powers that be has been shaken. At the same time, the web is exploding and the barriers to entry have never been lower. The tools you need to create a world-beating web service have never been cheaper and more accessible.


    The scale, the leverage that a couple of dudes with no money, a big idea and an internet connection can achieve is just totally insane. Never before in human history have so few been able to do so much with so little. It's like Björn said: in the late-90's, people thought all this stuff would be possible, but so much of it turned out to be vapor and a mirage. Now, 10 years later, the vapor of the 1990s is suddenly real, solid and amazing.



    The key is to get the word out. University computer science departments aren't educating students properly on the enormous leverage they can get using these tools. It's only later after they've left school, that the immensity of this opportunity becomes apparent. And that's bad. Each year, each month that goes by makes you more risk-averse, more accustomed to the standard "get a job, live for the weekend" career path. Repetition ingrains patterns on the mind and they become unquestioned habit.


    But what people really need is someone to get up and tell them "Hey motherfucker, you with all your talent and creativity, you don't have to waste it working for the man. You can build something. You can create something that people want. You can put your gifts to work, take ownership of your soul, make the world better and get rich in the process. It's not either/or." It's like Samantha from Sex in the City would say:

    You can have it all. But someone needs to tell people that. It's not normal to grow up thinking that way. God knows our educational system doesn't do it. And that's why I think such a large percentage of entrepreneurs come from families of entrepreneurs. Hence, in my mind, schools need to step up and fill in the knowledge gap.


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  10. Mobile Computing: The iPhone and Beyond

    January 5, 2010 by Matt Mireles

    It's not by accident that everyone in the SpeakerText team has either an iPhone or a Droid. Even the hotshot college kids we hired. How did we pay them? iPhones. 

    As Marc Andreesen told Charlie Rose: "the iPhone is the first true cellphone that is actually a full computer."

    And that really matters. Having a computer in your pocket changes what you think a computer should be able to do. Form defines function. And when you're building a software company, you gotta understand huge trends like this at a very deep level. 

    Thus, for SpeakerText and for me, mobile computing is not just a cool fad that we follow because it makes us look hip. Again, Marc Andreesen:

     It has a full operating system, it has the ability of support, a large number of applications, it has a software development kit that you can use to build applications, it has a way to distribute applications over the network onto the phone.

    No, having our engineers and managers own iPhones is a strategic move. 

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