The wireless connectivity of tomorrow promises significant improvements over our current systems.
Learn more about these future developments at the Tuesday evening, May 14 edition of the Austin Forum. Titled “5G: The Wireless Communications Technology That Will Transform Society,” this session explores how these advancements will enable new classes of increasingly powerful devices, applications and uses — including making connected cars feasible, smart cities more integrated, and ultimately produce the fabric for achieving the vision of a comprehensive Internet of Things (IoT).
Speaking about 5G at this event are Fawzi Behmann (founder of TelNet Management Consulting), Dr. Arun Ghosh (the Director of Advanced Wireless Technology Group with AT&T Labs) and Amber Gunst (the interim CEO of the Austin Technology Council).
One lucky attendee of the Tuesday, May 14 edition of the Austin Forum will win a free badge to SXSW 2020. RSVP here to save your spot at this event. The Austin Forum occurs at Central Library (710 W. Cesar Chavez). Doors open at 5:45 pm and presentation begins at 6:15 pm.
Hugh Forrest serves as Chief Programming Officer at SXSW, the world’s most unique gathering of creative professionals. He also tries to write at least four paragraphs per day on Medium. These posts often cover tech-related trends; other times they focus on books, pop culture, sports and other current events.
Regardless of what startup bible you read, the most consistent thread is undoubtedly this. Getting as close as you can to both users and their problems, gives you the best shot at building the right thing, and user research is your vehicle on which to do so.
But it’s not quite that simple. You see, depending on your stage in the process and what you’re trying to achieve, there are an array of user research methods and tools at your disposal, and using the right ones at the right times radically improves your chances of success.
So we’ve compiled this practical guide to user research, helping you understand what to do and when, and what to use to give you the best outcomes. Each section is broken into four key components:
Objective: what is it that you’re actually trying to achieve
How: The way we suggest you should approach your research with this in mind
Tools: Some frameworks and services best suited to getting this done
Outcomes: Where you should expect to be as a result of completing this research
1. Research your big ideaObjective
You’ve got your big idea for a startup, but how do you make sure it’s an idea that will actually work? You want to understand who your customers are and whether this idea might be a meaningful enough problem for them that you can or should solve.
Surveys enable you to gather a large number of responses at speed and in turn can be easily analysed. Following this we recommend timeline interviews, as they will enable you to dig a bit deeper into the respondents current behaviours and where their biggest pain points might lie.
Be sure to speak to people beyond your friends and family — they will be biased and will tell you what they think you want to hear. Speaking to potential customers will give you richer insights and real anecdotes. Search for where these people hang out (online and offline) and find your way in.
You’ll start to see patterns and common themes that keep coming up across the interviewees. From this you can build personas and identify ‘archetypes’ within your customer base. For each of these you should be able to distinctly articulate their goals, motivations, pains and frustrations.
2. Prototyping your ideaObjective
You’ve identified and understood the problem, but you need to validate if your product is going to actually solve it. You may actually have multiple product ideas aimed at tackling the same problem so are trying to identify the best place to start.
Create a simple prototype or demo of the core journey/functionality of the solution you have in mind and get feedback from 5 potential customers — maybe engage some friendly people that you spoke to at the interview stage and ask them to give the prototype a go. With each round of feedback, iterate, refine and retest your solution over and over until you have a prototype that you are confident fits the problem.
For prototypes, I would always suggest to start on paper. This is a really quick, cheap and easy way to get your ideas out of your head and visualised. Don’t be afraid to show these early sketches in order to get super quick feedback from people.
If you think a richer, more realistic UI would help with testing, design tools such as Sketchor Figma may come in handy.
If you want to focus your energy on testing the journey or UX itself, Marvel or InVision are two prototyping platforms that allow you to create clickable prototypes.
If I’m conducting tests remotely, I use video conferencing software such as Skype or Zoomand share my screen. I will always try to record these sessions (be sure to ask the permission of the tester) to ensure I have something to refer back to if I need clarity on what was said.
By the end of this set of testing, you should have a refined prototype of the core journey and functionality, with a high degree of confidence that it solves the problem and serves a purpose.
3. Fleshing out your first productObjective
Building your product or service itself can be a costly investment. You want to be sure that your product is usable — both easy to use and easy to learn for your prospective customers. You want to identify key usability issues before you build (e.g. can users find your most important call-to-action? Do users get stuck when they go through the check-out process?)
Create a richer, more comprehensive prototype of the complete solution (including all the edge cases) and then test in depth with 5 potential customers. Once again, iterate, refine and retest the solution based on any common themes you’ve heard from the feedback.
The tools for this stage are very much the same as the previous stage, but we’d recommend placing greater emphasis on using design tools in partnership with prototyping tools now to create a much richer, realistic experience.
By now you should have a prototype that closely resembles the product you hope to launch, which both satisfies the users problems and needs, as well as doing so with relative ease.
4. Building your techObjective
As you begin building product, you want to get feedback from users to ensure you’re still on track, and to further stress test the usability and relevance of your features and functionality.
Provide access to early builds to potential users at relevant and timely milestones during the build, taking on their thoughts and adapting quickly to common themes in the feedback received.
If you’re building a website, providing access to a staging environment or a password protected version of the site is a simple way to test behind closed doors.
If you are building an application, TestFlight and AppCues are great options to distribute builds and receive feedback.
You should now be ready to soft launch your product, confident in the quality of the experience and robustness of the build (but fully prepared for some bugs and issues to show).
5. Soft launch your first productObjective
You want help identifying any show-stoppers, whether that’s features that you simply can’t launch without, or any major issues or bugs that need to be fixed.
Provide access to a small number of friendly pilot users via a private beta release. Ask these users to explore the product and assign tasks for them to complete, as well as their feedback on the experience of using the product over an extended period of time.
Set up regular check-ins with the pilot users via phone/email/in-person to see how they are getting on and what (if any) issues they have encountered.
Send you pilot users a survey at the end of the pilot program to easily quantify their feedback and identify common painful/delightful moments during their experience of using your product/service
If you have Intercom installed, it can be a great way to talk directly to potential and current customers that you haven’t already built a relationship with
The end of this period should be marked by having a bug-free product, that is measurably creating value for users or customers, and is ready to be scaled to many more users.
6. Full release of your first productObjective
With your product in-market and slowly building a user base, your focus now switches to optimisation for conversion (if relevant), usability and ongoing feature release.
Now is the time to analyse your user data to spot trends in user behaviour. Get stuck into your analytics tool of choice and start to build an understanding of how people are actually using your product. It’s the perfect time to get a better understanding of your conversion funnel and to pin-point where most people drop-off.
Alongside data analysis, reach out directly to your users. Speak to those who didn’t convert and find out why they dropped-off, but also get to know your paying customers to understand what they like and what they’d like to see. Making both sets of users feel heard is a valuable way of building advocacy for you and your product.
Plug-ins like Intercom can allow you to reach out directly to users — but email can work just as well here if this proves too much of a cost at your stage.
Having conducted the above, you should be in a place to reassess your product roadmap and update your priorities. Doing this on an ongoing basis, with every new feature release and update, is essential for staying on top of your game!
Capital Factory is pleased to announce the $100,000 Defense Innovation Challenge focused on identifying solutions to two of the U.S. Army’s modernization priorities. This will be the finale of the J.P. Morgan Texas Startups Roadshow, a unique gathering of the country’s top tech investors and innovators who are investing in Texas.
On June 6, the 75th Anniversary of D-Day, five technology startup finalists will be judged by a panel of successful entrepreneurs, defense industry leaders, and venture capitalists. All five will be accepted into the inaugural cohort of Capital Factory’s new Defense Innovation Track, and one will walk away with a $100,000 investment that day.
The U.S. Army is on a mission to update its forces and equipment with new ideas and novel technology to address some of its key challenges. The two topics for this challenge were selected from among the Army’s top six modernization priorities. Capital Factory wants to help the Army deliver technology overmatch to warfighters by finding and investing in startups with “dual-use” solutions that were developed for the commercial industry but could also be used by the Army.
Who is eligible?
Any U.S.-based startup company with a solution to one of the two problems identified below can apply to participate. If selected as a finalist, you will join the new Defense Innovation Track at Capital Factory and, if you win, you will receive a $100,000 investment from Capital Factory on a convertible note.
Here are the problems:Better AR/VR network optimization and data compression technologies
There is a need for network optimization and data compression technologies to ensure delivery of scalable AR/VR capabilities with low-latency to no latency, on a distributed and global basis, even in bandwidth and computationally-constrained environments. Based upon the current training environment performance, there are needs to: optimize training network performance to support AR/VR graphics and scalable data delivery and response; compress data to provide low-bandwidth, low-latency, and high-fidelity streaming of AR/VR graphics and data in bandwidth-constrained environments; and, implement advanced edge computing and networking architectures and solutions to deliver optimized network performance.
IoT and AI/ML training assessment tools
There is a need to enhance its current measurement, assessment, and optimization of training activities conducted through this new training capability. While training is monitored and assessed today, most of the measurement and analysis of training by organizations of all types is conducted manually. Thus, specific opportunities have been identified to enhance the existing capabilities by providing: automated collection, monitoring, and measurement of training performance activities of individuals and groups during training activities in virtual, live, and hybrid training environments through IoT and other solutions; training outcomes, assessments, and recommendations on additional training or areas of improvement through predictive analytics, including AI/ML and other approaches; automated training performance measurement, analysis, and optimization — including adaptive learning and intelligent tutoring systems — through novel applications; and other automated training assessment capabilities.
Defense Innovation Track
Earlier this year, Capital Factory opened the Center for Defense Innovation — 23,000 square feet of collaboration space with the Army Futures Command, AFWERX, Defense Innovation Unit, MD5, The National Geospatial-Intelligence Agency, and a team of Booz Allen Hamilton’s defense innovators as initial tenants. This unprecedented collaboration between the public and private sector brings entrepreneurs and government innovators shoulder-to-shoulder in a coworking environment where they can learn from each other and have a kind of serendipity that can’t happen behind high security.
This new center of gravity for defense innovation brings together military leaders with entrepreneurs, innovators, and established defense industry leaders to co-create solutions that ensure our armed forces are poised to meet the threats of tomorrow. The Defense Innovation Track is a new program designed to give special attention to startups who have the potential to solve problems for the defense industry and to help make the connections to the investors, customers, and talent that startups need to be successful.
All Participants in the Defense Innovation Track will receive:
Mentor network that includes special access to an A-List of Texas’ top entrepreneurs as well as defense industry veterans
6 months of unlimited co-working at Capital Factory for your whole team
Hundreds of thousands of dollars in total hosting credits from Amazon, Google, Microsoft and other major hosting providers (each individual offer is different and subject to change)
Think you’ve got a shot? Apply now on AngelList to be one of five teams selected to pitch. You could walk away with $100,000 and a new home at the Center of Gravity for Defense Innovation! Application deadline is May 24th.
Capital Factory is the center of gravity for entrepreneurs in Texas, the number one startup state in the U.S. Last year more than 200,000 entrepreneurs, programmers and designers gathered day and night, in-person and online for meetups, classes and coworking. With boots on the ground in Austin, Dallas and Houston, we meet the best entrepreneurs in Texas and introduce them to their first investors, employees, mentors and customers. According to Pitchbook, Capital Factory has been the most active investor in Texas since 2013.
Austin is known for a number of things — temperate climes, great barbecue, and hosting multiple internationally known music/film/tech festivals each year — but it’s not a place ordinarily discussed among with the likes of Venice and Berlin … unless Airbnb happens to be the topic of conversation. While it may come as a surprise to locals and visitors alike, the short-term-rental (STR) unicorn considers Austin to be one of its 24 global “super cities”: destinations that routinely generate the company’s largest revenues, and are viewed as having the strongest prospects for future growth. Last year Austin managed to edge out Venice and Florence in terms of 2018 Airbnb revenues, and it nearly beat Berlin as well. It was also one of only a dozen cities worldwide included in last year’s launch of Airbnb Plus, which Airbnb CEO Brian Chesky described at the time as one of the “biggest changes to our platform in our ten-year history.”
Austin is also a destination market for many of the increasingly large segment of startups that manage STRs one could describe as either “aparthotels” or “boutique STRs”: a modern spin on the corporate apartment concept, if you will. Most of these companies employ variations of a similar model: they typically lease sizable blocks of apartments in upscale buildings; furnish them in varying degrees of style (but nearly all in a contemporary / modern fashion); and rent them out on a nightly basis, both via Airbnb and other online sales channels. Nearly all of the major online travel agencies (OTAs) — including Expedia, Travelocity and Hotels.com — now include listings for boutique STRs, oftentimes placed directly alongside ones for traditional hotels, but the second-biggest player in the space is believed to be Booking Holdings, the new moniker for Priceline that it adopted in 2018 after acquiring Booking.com. (Booking also owns Kayak, OpenTable, and a variety of smaller OTAs more broadly known outside of the U.S.)
Among the myriad startup aparthotel ventures, The Guild — which is headquartered in Austin, and had 97 keys under management at the end of 2018 — is one of the companies most worth watching. It completed a $9 million Series A funding round last fall, and is using its capital to further grow in Austin and Dallas (its main existing markets) and expand into Denver and Miami. It also generated an impressive $2.6 million in Q4 2018 revenue from its Austin units alone, or roughly $26,800 per unit, according to a source with knowledge of the company’s financials. A relative newcomer, Locale (based in Austin as well), also recently announced it had secured $2.5 million in seed funding, though it already had 150 apartments under management in Austin, Houston and Nashville beforehand. Like The Guild, Locale plans to use its capital infusion to expand into both new markets and further so into existing ones.
The Austin STR hubbub is all the more remarkable considering its city council banned most new STR licenses three years ago, and plans to phase them out entirely by 2022. (That said, most industry observers consider this possibility to be a remote one, and many initially thought the Texas Legislature would vote to preempt local STR regulations — which would likely nullify Austin’s ordinance in its entirety — by the end of its 2019 session in June. Even if it doesn’t, there’s little realistic chance the ordinance will survive an ongoing lawsuit over it — one in which the Texas attorney general has directly intervened.) The curious part — which appears to have been overlooked by the city’s many vociferous STR opponents — is that even in its current form, Austin’s STR ordinance allows for precisely the types of home rentals managed by Locale and The Guild.
The ordinance breaks down local short-term rental properties into three categories. Type 1 STRs are owner-occupied homes that can be rented out when their owners are out of town. Type 2 STRs are both the most predominant and most contentious variety by a wide margin: they’re defined as non-owner-occupied “permanent STRs” in predominantly residential areas that are rented year-round on a short-term basis. The apartments rented out by startups like The Guild and Locale fall into a third category, however: Type 3 STRs, defined as units in multifamily buildings located inside areas zoned for commercial and/or mixed-use purposes. Some of the parts of the city that qualify as such are downtown and most arterial roads that were rezoned as “vertical mixed-use” (VMU) over a decade ago, including South Lamar, East Riverside and Burnet Rd. Up to 25 percent of the units in such buildings can be used as fully licensed STRs — a fact that The Guild apparently discovered early on: all eight of the Austin apartment complexes where its units are housed (as of the end of 2018) fall into this category, and the ones I’ve seen in person have their official STR licenses posted adjacent to the units’ front doors. Although Austin’s daily newspaper, the American-Statesman, ran a particularly hyperbolic article on the subject last fall, no problems of note — and no crime to speak of — have been reported to date at any Type 3 STRs.
Is ‘Type 3’ The Key?
More broadly speaking — and regardless of the fate of Austin’s STR ordinance — the “Type 3 Model” could end up being implemented in some fashion throughout the country, which would bode particularly well for many of the boutique-STR ventures. The idea certainly makes sense in many ways: one can reasonably argue that it represents a happy medium between the needs of travelers who either don’t want to stay in hotels or simply can’t afford to do so — not to mention business travelers who may stay in units for an extended period of time, a market to which The Guild (among others) is explicitly targeting — and long-term residents (both owners and renters) who worry about an endless stream of transient visitors on their streets or in their apartment buildings. A number of the aparthotel startups have begun taking proactive steps to address such concerns, including keeping out-of-town visitors from commingling with full-time residents in the apartment buildings they utilize. In Austin, for instance, The Guild has announced plans to lease apartment units on a full-floor basis going forward, and also already runs background checks on all prospective guests.
While some of the concern over STRs may be overblown, the issue of Type 2 full-time-rentals-in-single-family-houses variety — in Austin and elsewhere — is likely to remain a salient one. New Orleans is another city with a plethora of “whole-home” STRs — though unlike the situation in Austin, many are reportedly owned by out-of-town operators, and also much more commonly used as “party houses.” (It is New Orleans, after all.) In response, its city council voted in January to prohibit whole-home rentals in most residential neighborhoods altogether, though owner-occupied residences with homestead exemptions are still permitted. City officials in Savannah also banned STRs in residential neighborhoods last year, although the Georgia legislature has more recently debated a bill that would prevent cities from enacting such prohibitions — similar to the legislation being considered in Texas, although as a home-rule state Texas has considerably greater veto powers over municipal regulations. Still, it’s notable that both cities followed Austin’s lead, even if indirectly, in allowing existing STRs to remain largely as-is in commercial areas and/or multifamily buildings.
All of which begs the question: is the boutique-STR model — limiting many, if not most, rentals to multifamily buildings where they’re both legal and have been explicitly leased as such by their management companies — the solution to the vexing problems of out-of-towners “invading” predominantly single-family residential areas, as well as “corporate” home rentals in leading urban destinations? Should cities thus consider restricting single-family-home STRs in residential neighborhoods to local operators, but allow corporate rentals in multifamily buildings outside of such areas — particularly in parts of cities already zoned for hotel use? There may not be any one-size-fits-all solution in this regard, but by all appearances companies like The Guild and Locale seem to be on the right track.
To be clear, however, both startups face formidable competition — including from Airbnb itself, considering its Airbnb Plus offering is explicitly intended to add a degree of standardization to the STR experience. Among competing boutique-STR startups, the biggest threat is likely Sonder: the San Francisco-based venture emerged from stealth last August after closing an $85 million Series C funding round, and announced it had secured cumulative funding of $135 million. Last week The Information reported that the company is finalizing a deal that would add an additional $200 million to its coffers. Nipping close on its heels is Lyric, also headquartered in San Francisco: the company recently confirmed reports (first reported by The Information in December) that Airbnb itself would be leading a sizable Series B investment round in the venture. Its final funding amount was larger than initially expected, and the most to date in the boutique-STR space — depending on how one counts it: $80 million in cash plus another $80 million in equity. Still, Sonder appears likely to leapfrog Lyric’s funding either way in the immediate future.
In terms of its Austin operations, Sonder has dozens of apartment units under management in multiple parts of the city, including the Domain area 20 miles north of downtown — along with seemingly odd options, at least for tourists, such as South Congress near Stassney Lane and the East Riverside / Pleasant Valley area — and a source with detailed knowledge of its plans indicated the company is currently in negotiations to rent apartment blocks in new-build complexes in “multiple parts of town.” Lyric, which made its public debut in February 2018 with a splashy Wall Street Journal story featuring a sizable photo of one of its Austin units, appears to be pulling back from the market: although it still operates its Austin properties, including one at the Seven high-rise downtown, its new home page — introduced last week following its funding announcement, and which includes a direct booking engine for its units in seven cities, including Houston and Dallas — has no mention at all of its Austin presence.
It’s presumably stating the obvious that The Guild’s $9 million in funding and Locale’s $2.5 million are relative chicken feed compared to the nine-figure sums raised thus far by Sonder and Lyric. On the other hand, The Guild in particular has what could well prove to be its ace in the hole: it has Chip Conley on board as an investor and advisor. Until 2017 Conley served as Airbnb’s global head of hospitality and strategy, and despite his departure, Conley was arguably one of Airbnb’s smartest hires to date. He was one of the earliest pioneers in the boutique-hotel space: as the founder of the Joie de Vivre (JDV) boutique hotel chain, Conley acquired the Phoenix Hotel in San Francisco’s Tenderloin neighborhood way back in 1987. Even today — in a city that now has the highest median home prices in America — the Tenderloin remains a deeply troubled neighborhood, one where locals know not to wear open-toed shoes while walking in the area because of the danger of stepping on a discarded heroin needle.
Thirty years ago the area was effectively a no-go zone, and acquiring a hotel in such a neighborhood was a colossal gamble. Not only did it pay off, however, the Phoenix soon became quite literally a rock-star hotel, one where A-list bands often stayed while playing local gigs. JDV has since opened dozens more properties, and is now the second-largest boutique-hotel operator in the U.S. — in significant part because of Conley’s leadership. He’s also widely hailed as having played a critical role in Airbnb’s formative years, given his nearly unparalleled hospitality background. (One might also note that Airbnb has experienced myriad problems since Conley’s departure in its rollout of Airbnb Plus, its higher-tier verified-listing initiative first introduced in February 2018. Many of the early doubts about the program have proven true, including the pitfalls I pointed out in an article about it last April, and thus far it’s signed up only a fraction of the 75,000 homes Airbnb CEO Brian Chesky originally claimed at its launch would be added into the Plus program by the end of 2018.)
Moreover, both The Guild and Locale incorporate an element that’s decidedly lacking in Sonder’s units in particular: original interior design that explicitly embraces a heavy degree of local flavor. I’ve stayed in a Sonder property for an extended period and visited a dozen others in four cities: speaking as an admitted design nerd (one who began his career in web design and once launched a high-end home design e-tailer), I’d describe Sonder’s furnishings as blandly modern and effectively interchangeable, with few decor variances in varying cities — on top of being notably lacking in quality. Many of its furniture pieces are available from the likes of Wayfair, a purveyor of made-in-China decor even cheaper (and cheaper-looking) than most sold at IKEA.
The Guild, in contrast, features apartments designed by local decorators, and they include luxury bed linens from Parachute along with witty design touches such as “Guildtone” displays featuring the Pantone colors of local landmarks such as Austin’s “I Love You So Much” mural and the water at Deep Eddy Pool, the oldest swimming pool in Texas (built in 1915). Locale units, meanwhile, offer bath products from Gilchrist & Soames, a high-end British supplier, along with Nest thermostats, in-room yoga mats and five types of sugar for one’s morning coffee. (For the record, the Sonder unit I stayed in had nothing but plain white sugar and Sweet ‘n Low — not even any Equal, let alone Splenda or stevia, and no half-and-half — and only enough for my first two days there.) Further still, The Guild and Locale appear to have locked up some of the central city’s most desirable apartment properties, most of which are located either downtown or in hot destinations such as East Austin and the South Lamar corridor (all of which qualify for VMU zoning).
Still, we’re in the comparatively early days of this niche in the broader STR space, and it’s far too early to ascertain which ventures will prevail. Sonder and Lyric have an obvious funding advantage, but at least in Texas Locale and The Guild have a decided hometown one: at present The Guild’s per-unit revenue is far higher than Sonder’s, and as noted Lyric appears to be abandoning the Austin market altogether. Sonder was effectively an unknown barely six months ago, but will likely soon have a war chest of over $400 million in total funding. If they play their cards right, there’s no obvious reason The Guild and Locale can’t do the same.
Mitch Marchand, founder of Vybe Software, working at Sputnik ATX accelerator in Austin, TX
First off, and full disclosure, I operate an accelerator program (Sputnik ATX) and have strong opinions on this subject as a participant in the “helping startups” market. I put that in quotations, because, as I’ll expound, there is a start-up industrial complex that is designed to fleece novice founders from their seed capital with predatory fees, terms, etc. Also, I’m going to start just writing accelerator, because writing accelerator/incubator over and over just reads poorly. OK, enough with disclosures. Read on!
If you’re a breathing human, you’re confused by the veritable potpourri of accelerator and incubator options clogging your inbox. Need help evaluating which one is right for you? How to know which one may or may not help you out? I’m here to help. Here’s a list of questions you should ask to see if your start-up benefits from a program:
Does the accelerator write checks or take checks? Accelerators that give money, usually as equity investments and sometimes as a grant (whoo-hoo if you can get it), are often those who have real “skin in the game” and want to align their interests with the founders. They’re willing to put their money where their mouth is, and back your company. It is important to also ask how they help you get your next check. Some, like Sputnik ATX (yea us!) also write follow-on checks and will lead or participate in seed rounds or A-rounds beyond the pre-seed investment typical of most programs. Programs that do not write checks to the start-up may also be helpful, but you should expect them to add a lot of value in other ways if they are asking for money or even equity (yikes), without making an investment. For example, it may make sense to give up a few points of equity or pay a fee if you have very high confidence that the program will help you double sales, get major traction, or something else that is material to your success, and not just helping you prepare a nice pitch, some simple introductions, etc.
Does the accelerator help me do something I can’t do for myself or speed up a hard thing? Good accelerators identify and invest in companies where they can add value and have experience to offer the founders. Ask the accelerator how they’re going to help you, and be specific. If they can’t tell you how they can help you solve a tough problem or complete a hard thing, move on. Too often, startups believe that just getting into a program will raise their profile, and so they sign up for something that wastes time and money doing things they could have done faster for themselves. It is OK to recognize that a program isn’t going to accelerate you as advertised. One program here in Austin that really does this well is SKU, an accelerator to help CPG start-ups. SKU has a focus niche where they have deep expertise and networks that help companies get onto store shelves, something that is quite hard to do without the industry know-how and experience.
Is the program just trying to get me to buy something? What I mean by this is some accelerators are just trying to sell startups other services, and offer little in the way of help. Good accelerators don’t see you as a customer, you’re a partner that they want to help. A generative relationship should exist between the startup and the accelerator, where the accelerator is spending its time helping you to succeed. If you’re just there to buy products and services from the “accelerator” then the program may just be a marketing channel used by a business to sell coworking space and other advisory services to start-ups without offering much value added. Some coworking spaces may have excellent accelerators, and you’ll only know if they’re awesome when you compare the cost of the required stuff you’ll buy versus the benefit from the space and program.
Is the program merely providing free access to services I can get elsewhere? Some accelerators take equity in exchange for providing services like desk space, credit on cloud services, or “free” consulting. Let me address some of the more common services one by one:
Desk space — if you have a place to sleep, you have an office. Giving up equity for a desk is a sub-optimal business decision. If you really need a desk, drive Uber/Lyft for a day and use your earnings to pay for that workspace without diluting your equity. As a bonus, you might meet a cool VC while driving (I met a cool company or two this way, the founders pitched me while driving).
Credit on Cloud Services — accelerators get this free from Amazon, Google and Microsoft, so they’re not paying for the perk they offer you. Plus, if you attend some of the Amazon, Google and Microsoft cloud events, you can get this same perk for free directly, without selling your soul.
“Free” consulting or advisory work is garbage. Advice should always be free to founders. Anyone who has successfully founded and exited a start-up will usually help you out for free because they know how hard it is to launch. Anyone who needs a paycheck from you is not legit, and is usually someone who is preying upon start-ups to make a living because they failed to do so as an entrepreneur or flushed out of corporate life and have no clue how to successfully start their own company (or they’d be doing it already). For this reason, Techstars has a policy of not permitting advisors or partners helping companies in their program from charging any fees to the company while they’re in the program. If they have value, prove it first. A good policy.
What do the program alumni have to say about its worth? Ask program alumni companies if it was worth it, and then ask yourself if that company has a credible opinion. For example, someone may say a program stinks, but may just be blaming the accelerator for their own business failure and faults. On the other hand, if a successful founder who built a nice business tells you the same program didn’t help them that much, that opinion has more gravitas. Then, find out why it did or didn’t help them, to better understand if the program will help you.
Overall, take some time to learn more about the program, how they add value (if at all), and if that value is what you require at this time. If the value is there, then ask yourself if the cost is worth it.
There are some great accelerators out there, so go find the one that works for you.
As I mentioned at the beginning of this series/ebook, over the years I’ve noticed that I tend to frequently share certain Lucky7 posts with entrepreneurs we’ve backed, team members at data.world, or other startup investors I know. In totality, these posts are at least as long as most business books. So I’m packaging the best of them up for you here in a new series called The Entrepreneur’s Essentials. This series/ebook will be at least 20 posts long, and I’ll add some commentary on how I’ve personally applied the lesson on my sixth startup, data.world, to bring them “up to date”.
For the seventeenth selection of The Entrepreneur’s Essentials, I’m going with recency bias yet again. Recently one of the startups in our portfolio, eRelevance, failed, as the Austin American-Statesman documented. As I wrote about in my post on Seven critical lessons learned in angel investing, this is painful and you must have a diversified portfolio to practice angel investing and actually make money. In the same time period (the past few months), we’ve had some exceptional financial returns that counter this financial loss. But I digress — this post is all about the resilience required to keep going as an entrepreneur, not as an angel investor. Bob Fabbio was the founder and CEO of eRelevance and he was the man in the arena here — and I bet he’ll be back. This wasn’t his first rodeo, as we say in Texas.
So here we go with the seventeenth lesson from The Entrepreneur’s Essentials. This lesson was first shared at Lucky7 on December 7, 2013. I made very few edits to the original post, mostly in the area of readability and grammar (not in substance of content):
AT AGE 46, HE STARTED HIS FIRST COMPANY AND IT FAILED MISERABLY… BUT THEN, ON HIS SECOND…!
For all of us Austin fans, I’m talking about Cotter Cunningham, the founder and CEO of RetailMeNot. Last night, Cotter was one of our keynote speakers, along with Mark Cuban, at the University of Texas for Longhorn Startup Demo Day (the event was just fantastic, by the way, and Josh Baer, Ben Dyer, and Bob Metcalfe deserve a huge round of applause for it).
As of today, RetailMeNot is worth $1.33 billion as a public company (it went public in July and just filed for a follow-on offering). It is just four-years old — for a value creation of $333 million per year. Who says Austin can’t do B2C now? HomeAway is another one of our five tech IPOs in the last five years. It is worth $3.4 billion today as a public company (it went public in 2011). It is just nine-years old. Yes, we haven’t produced a Facebook or Twitter size outcome — there needs to be a higher volume of failures (entrepreneurial experiments) to do that — but don’t forget we did produce a Dell, a National Instruments, and a Whole Foods.
As Cotter explained at Longhorn Startup, as well as when I interviewed him as part of my Entrepreneur-in-Residence Speaker Series at the McCombs School of Business Herb Kelleher Center for Entrepreneurship, his entrepreneurial journey at age 46 started out with the euphoria of being his own CEO followed by a gut-wrenching pivot. Cotter bucks the flavor-of-the-day entrepreneurial stereotype: the college dropout popularized by both our own Michael Dell and recently Mark Zuckerberg and the great movie The Social Network. Michael and Mark are business savants, just like Michelangelo was an art and engineering savant (by the way, I’m pretty sure Michelangelo would have made a damn good entrepreneur in this day and age).
But most of us simply aren’t savants. I don’t consider myself one — I didn’t start my first business until I was 24 and earning my MBA. And I didn’t hit on something big enough to drop out of my MBA so I proudly finished and then chose Coremetrics. Cotter’s first company was called Divorce360.com. After more than a year, it was a miserable failure. And the funny (and fortunate) thing is — Cotter has never been divorced! Instead of crying in their beers about it, Cotter and Tom Ball at Austin Ventures decided what to do next and came up with Small Ponds, which later became Whale Shark Media and then RetailMeNot (named after its largest digital property). No matter the name — the business was the same and through acquisitions it became to be worth $1.33 billion as the juggernaut it is today. Here it is in Cotter’s own words, as I interviewed him at U.T. Austin while I was the Entrepreneur-in-Residence there. This is well worth the watch:
The line between success and failure is sometimes very thin indeed, and that is the subject of this blog post. To be very upfront, my goal is to help Austin entrepreneurs shrug off failure more easily — after accounting for the important lessons learned — and just “keep walking”.
We all know the famous story of Apple, which at one point kicked out its co-founder and CEO, Steve Jobs. After his walk in his wilderness, both literally and figuratively, he returned with a vengeance. Today Apple is worth $510.96 billion, or $100 billion more than Exxon Mobil, making it the most valuable company in the world. What if Steve Jobs had not shrugged off failure and gotten his mojo back?
Do you know the story of OneSpot? It started in 2007 here in Austin and was founded by my friend Matt Cohen. It had a gut-wrenching pivot as the first business model didn’t work and today is thriving with its new one. Matt and his new CEO, Steve Sachs, just raised $5.3 million from principally Mohr Davidow Ventures (Hurt Family Investments also participated), and Bryan Stolle joined their Board of Directors. Bryan is an amazing entrepreneur and is very focused on investing in Austin startups, even though he is based on the West Coast. Bryan and I were together on Tuesday talking about how Matt deserves the entrepreneurial persistence award and how thin the line is between success and failure. Bryan related it to sports — he said if you carefully watch one of the big games there are usually just 3–4 plays that make — or break — the game.
Have you met Mike Maples, Jr.? He was previously of Austin entrepreneurial fame as the founder of Motive, which went public, and is a very active West Coast VC today (who, like Bryan Stolle, also invests in Austin startups, including Bazaarvoice, Outbox, Mass Relevance, and many others). He talks about the brutal, gut-wrenching nature of the pivot that OneSpot successfully completed in this video (source: TechCrunch’s “You Have to Be Willing to Throw it all away”). This is one of the most important training videos for entrepreneurs, in my opinion, and very much worth the watch. Mike’s most famous seed investment is Twitter. Much like Cotter’s Divorce360.com, Twitter started out as a failure — with Odeo. Odeo needed to pivot, it simply wasn’t working. Mike helped Ev Williams and Jack Dorsey capitalize Twitter, and the rest is history. Twitter is worth $24.85 billion today, after only seven years in business. Ev and Jack are worth billions now based on the value of their Twitter holdings alone, and both are off and running other successful businesses (everyone knows the success of Jack’s Square). What if Ev and Jack hadn’t pivoted Odeo to turn it into Twitter?
One of my friends is going through a “failure” right now. The market for the product simply wasn’t a good one. It is an emotional time for him, but you simply can’t know this until you try. At the beginning of Coremetrics in 1999, the market risk was whether or not companies would embrace the outsourced model (what we called ASP, or Application Service Providers, back then, and are now called SaaS, or Software as a Service, or “cloud” providers). At the beginning of Bazaarvoice in 2005, the market risk was whether or not we could convince retailers to embrace both the positive — and negative — voice of their customers and talk them off the ledge that negative reviews wouldn’t tank their overall sales. These may sound like easy challenges as you are reading this but I can assure you they were not. There were only around three retailers in the US that offered customer reviews on their websites. And both Bazaarvoice and Coremetrics would have turned out very differently had the market not been “ready enough” to allow us to convince them. The bottom line is that when Debra and I make seed investments at Hurt Family Investments, we realize that the market risk is very high. There is nothing like execution to find out. Even the best laid plans don’t matter if the market doesn’t buy it…
And at Coremetrics, it turned out we were too early. Our original investors made very little — unless they kept investing through the pivot. Our pivot wasn’t a business model pivot — it was a target market pivot. We started Coremetrics in 1999 selling to dot-coms. We were very successful at it, signing dozens of dot-coms who loved our solution, and grew to 100 people strong in just one year. Then almost all of our customers went out of business. We pivoted to sell to traditional retailers, which had only begun to sell online, after letting go of 2/3rds of our people, many who I considered close friends. It was one of the most gut-wrenching experiences of my life. Wal-Mart was an early win after that pivot, and then we took off. If it wasn’t for a fierce conversation that I had with Arthur Patterson, the co-founder of Accel Partners, Coremetrics would have gone out of business in early 2001. Arthur stepped up and made a big statement by leading a huge round of funding in our company at that time (archive). This near-failure story is well documented by the Austin American-Statesman in this interview. Trust me, I know all too well how thin the line can be between success and failure.
Remember: most people read the news and the rare few make the news. Those who make the news set the tone for the rest. Sometimes it is very, very hard to make the news, and the line between success and failure is sometimes very thin.
Keep walking, Austin… no one said it would be easy to be an entrepreneur, but the journey is the reward… reflect on and learn from your mistakes but don’t marinate in them, just keep walking…
So that is the end of the lesson as I wrote it almost six years ago on Lucky7, with some edits and seemingly now extraneous omissions. You can see the original post here, and the long comments thread below it.
How does this lesson resonate with me six years later?
Well, first of all I believe Austin entrepreneurs and VCs have become much more resilient. This is great — it’s progress.
Second, wow have Mike Maples, Jr. and Floodgate gone on to become even better VCs. Mike has to be feeling very good now that Lyft is public — he was the seed investor there. And Josh Kopelman and First Round Capital were among the seed investors in Uber, the blockbuster IPO-to-be of 2019. I realize how lucky Brant and I were to work with both Mike and Josh at Bazaarvoice, and my co-founders and I feel very fortunate to work with both of them again at data.world.
Third, here we are six years later and Twitter is still worth more than it was back then at $29.6 billion today, a delta of around $5 billion and over twice what Snapchat is worth at $14.4 billion. So even if you think Twitter has been through a challenging time — and it really has been — it has shown a lot of resilience in the last six years. And who would have ever thought it would be used so much by our President as his official communication medium, for better or worse? I was just at the TED conference last week and saw Jack Dorsey speak in this interview with Chris Anderson. Who would have known when I wrote this six years ago that Jack would become the CEO of Twitter as well as Square. He discusses how he handles balancing two big company CEO roles in that interview (it was my favorite part of his interview, which I frankly didn’t enjoy all that much).
Fourth, OneSpot is still at it 12 years later. It is the ultimate story of persistence, and I’m thankful that Steve Sachs is at the helm. He and Matt Cohen will be able to write a book about that journey once it is complete. I’ve been involved since the beginning, and I’ve learned from watching both of them.
Fifth, after the incredible success of HomeAway and RetailMeNot, which were B2C roll-ups (i.e., built by acquisition), Austin is now home to some great B2C organically-built successes in the making with startups like Dosh and EverlyWell. Dosh recently announced a $44m round followed by a $40m round just nine months later, and EverlyWell just announced a $50m round. We are proud to be among the initial investors in both. And Siete Family Foods recently announced a $90m round, paving the way for Austin’s continued CPG sector expansion. Siete, which is just five years old, started out at SKU, our local CPG incubator, and it has been a monster return for them.
Sixth, you really need to marry this lesson with The Entrepreneur’s Essentials #15 on the fallacy of risk in entrepreneurship. There is a lot you can do through thorough research and great execution to mitigate failure. Luck in market timing will still play a big role, though.
So, what are your “failure” stories? Let’s get a dialogue about this going in the comments below — perhaps we’ll be able to help someone on their journey, which is what The Entrepreneur’s Essentials is all about. I hope that Bob Fabbio will share more of his at eRelevance when the time is right. We invested in eRelevance three times and for good reason. There are some lessons learned there to be shared in order to help fellow entrepreneurs.
A new user playing with BeertenderBeertender is Live!
The day has finally come! Beertender is officially available to download in the App Store. At first, the app was only able to be downloaded by devices most currently updated with the newest version of iOS 12. Our first update to the app was to lower that threshold to OS 11+ devices, considering I had just bought a new phone and STILL could not download it. Nevertheless, most people with an iPhone now have access to it, which means your first order of business is to download it here. Then, after playing with it, getting some recommendations of your own, possibly trying them for yourself, we can discuss your thoughts.
As of right now, our team is not close to being finished with our work. We have some big plans for Beertender and are continuing to expand and refine the app every day. Our next update is in the works, which will clean up the master list and possibly add an About Me page, where you could turn on data saver mode and find our contact information. We also are beginning to send out online surveys and are planning a focus group, which will allow us to get real feedback from new users. Now that the app is out and users are able to actually experience Beertender, we want to know their thoughts. They are valuable and can help us to shape the path for our app to find success.
On top of refining the app and taking user feedback into account, we have some ideas for new features that might be cool and could possibly allow us to monetize Beertender. One of the ideas, something we are initially calling “Beer of the Week,” would be a featured beer each week that is new or noteworthy on the app. Breweries could even let us debut new or reintroduce of seasonal beers to our users to draw attention to them. Obviously, our user base would have to be high enough that any type of paid promotion would make a difference for the brewery, but it never hurts to think about shooting for the stars.
One of the main things that needs to happen right now is expanding our social media presence. It is curious really how social platforms such as Facebook and Instagram will give you some credit to boosts post, which is what we are experimenting with right now. But overall, the plan for Demo Day is to increase our reach and recognition, particularly with the logo.
Another idea we have been toggling with is making some coasters with our logo. These can be used in a variety of ways: handing out to potential users or giving to breweries for them to use on their bars. This would bring attention to our logo, our name, and draw curiosity about the app to potential new users. We also are thinking about taking an approach similar to Bumble by putting stickers everywhere with the logo, maybe including a QR code which would take people to Beertender on the App Store.
In general, we are very excited about the possibilities with Beertender. We do not plan to stop working on the app after graduation, but maybe continue to see where it can go through the summer. Stay tuned for more and, if you have made it this far, check out our first commercial!
We’re Live! was originally published in Austin Startups on Medium, where people are continuing the conversation by highlighting and responding to this story.
Starting a company is many things — exciting, stressful, a little bit crazy and nothing if not a lesson in being resourceful. You learn to make the most of every minute of the day, and of every dollar you’re investing.
Whether you are bootstrapping or not, resourcefulness is as the heart of building a successful company.
Databox pulls data from a source you choose (social, google analytics, etc) into one customizable, visual dashboard. You can drag/drop sections and change timeframes to instantly see how your marketing (and other) efforts are working.
I love Databox because it is visual & informative. As a mostly visual person, I struggle to maintain focus with spreadsheets of data (I know, some of you are shaking your heads but this is a safe space!) so this was a game-changer for me.
This is an example of a Databox dashboard for Facebook ads. Credit: Databox website.
I use this for my social dashboards (Facebook, Instagram) and Google Analytics and feed it into my marketing dashboard. It’s a great and easy way to share updates with my team as well.
3 connections, 3 users and 3 dashboards
Full use of dashboard designer, integrations and scheduling of dashboard updates
Slack integrations and goal tracking
Bonus — People will be very impressed with your beautiful dashboards, and they will actually look at them.
Hotjar is one of my favorite new tool discoveries because it (1) is super visual and (2) lets me see inside the actions of my website visitors in a slightly superpower-esque way. That’s a word.
Hotjar puts together a heatmap of visitor activity on your website and highlights where most of your clicks and movement is coming from. I use this to keep an eye on traffic patterns in an easily digestable way, and monitor tweaks to placement and link content.
Always keep tweaking, that’s my motto.
Up to 2000 daily pageviews
3 heatmaps, 3 funnels and 3 forms
12 month analytics storage
An early heatmap example from our website.Tools to Become a Marketing Superhero
There are so many marketing tools out there, but I gravitate towards the ones that make my life easier on the back end (integrating with my website) and deliver a beautiful customer experience.
I discovered Typeform late in the game, but that’s ok. While everyone else was using these fun, fluid and personalized forms I was over here in the dark ages.
Typeform helps you create beautiful and responsive forms, surveys and landing pages with a variety of integrations. You can make them simple or make them smart (rules & conditions), and of course the design features are pretty incredible.
I am in the process of transitioning some of my forms to this, and the free plan is a great way to test it out on a small scale. You host them with typeform or embed directly in your website.
10 questions per form
They make filling out forms dare I say it, kind of fun?
Shout out to our social media rockstar Dakota Lowe for introducing me to Linktree. This is a simple but beautifully effective tool for linking a bunch of things to your instagram profile and helping your users find the right info quickly and easily.
It’s an easy way to make your Instagram profile work for you better.
SparkMail is an email client that started out specifically for iOS users, but they just added Android — hooray! I have 2 Gmail accounts, and for the longest time was using Apple Mail — which from a UI perspective made me sad but also was simply a bit irritating to use at times.
Spark rescued me, and now I am an organized, email-automating and calendar streamlining machine. And a machine that gets to look at a beautiful UI.
It lets me easily toggle between e-mails, set different signatures, have one cohesive calendar and schedule my emails. I love scheduling emails because my work hours are often odd and I don’t want to be the person sending you an email at 2am.
We all spend a lot of time on e-mail, so I am a strong believer that at the very least our inboxes should be beautiful. Are you sensing a theme?
Up to 5gb of storage
2 collaborators, limited email templates
So far, the free plan is right up my alley.
Ok, your turn — what are your favorites?
I’m always looking for new things to try and ways to be more organized. Send me a note in the comments for what you are obsessed with these days.
Stay tuned to this space as we publish more SXSW startup news in the coming days. If you would like to contribute to this blog, have startup info to share, or if you’re an international visitor here for SXSW, check out our contribution guidelines or tweet at me.
SXSW Edu Day 1 was originally published in Austin Startups on Medium, where people are continuing the conversation by highlighting and responding to this story.
Stay tuned to this space as we publish more SXSW startup news in the coming days. If you would like to contribute to this blog, have startup info to share, or if you’re an international visitor here for SXSW, check out our contribution guidelines or tweet at me.
SXSW EDDay 2 was originally published in Austin Startups on Medium, where people are continuing the conversation by highlighting and responding to this story.