Expert Advice - How To Use Start Up Accelerators

 Expert Advice

How To Use Start Up Accelerators

Jeff Wallace

Devin Miller

The Inventive Journey - Expert Advice

Podcast for Entrepreneurs

8/20/2020

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The Inventive Journey

Starting and growing a business is a journey. On The Inventive Journey, your host, Devin Miller walks with startups along their different journeys startups take to success (or failure). You also get to hear from featured guests, such as venture firms and angel investors, that provide insight on the paths to a successful inventive journey.

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one thing i see happen very very regularly is that companies think or founders think they've found a solution to a problem that in their mind exists but um this is not my statistic i'm citing it in 42 percent of the business failure startup failures what it turns out to be is there really is no market need and so you have to do validation of the problem you're solving for and the need for the solution you're bringing to market [Music] hey everyone this is devin miller here with another episode of the inventive journey i am your host devin miller the serial entrepreneur that's grown several companies uh seven and eight figure businesses as well as the founder and ceo of miller ip law where we help startups and small businesses with their patents and trademarks and uh today we have a a different episode or a special episode so as you guys have noticed we do our regular episodes every monday wednesday friday we have a guest on and we'll talk about their inventive journey we've also kicked off and are starting to do some guest experts that come on and talk about different aspects that will likely or should be helpful to most of the startup in the small business community so a couple of the previous episodes if you want to go check him out we had a marriage marriage and sex uh coach come on and talk a little about keeping your marriage strong as well as a national marriage therapist came on a different week and both of those to help you guys keep your marriage strong as you work on startups and work all the grueling hours so go back and check out those episodes but today we have jeff wallace and i'll let him introduce himself in just a second but he's a startup accelerator guy or expert whichever you want to call it and uh he helps uh he'll explain a little bit more but a lot of times accelerators for people that are new to startups or want to or just getting into startups or wanting to accelerate hence the name their startup oftentimes will go to accelerators and uh my personal experience there are some great accelerators that absolutely do a great job and are have a great value and there are some terrible ones that absolutely take your money and run type of a thing and i think jeff was on the good side but we'll let you guys make the decision on the air during the podcast but uh jeff has done some interesting things and he's done some work and done some work with uc berkeley he does silicon valley in your pocket and i'll talk a little bit more about that as well as generally what an accelerator is and how what's bench your back will mean a whole bunch of other fun stuff so with that as much of an introduction welcome on to the podcast jeff hey thank you so much devon i really appreciate it i'm looking forward to uh chatting with you today so i gave you a bit of an intro but maybe for those that aren't aware of it i just gave a very high level what is an accelerator or what you know what does an accelerator program do and i know you guys do maybe a bit differently and move to doing it a bit more virtually in that but kind of give everybody that kind of level set of what is an accelerator sure so it's interesting i've been fortunate to be involved in two different accelerators as a co-founder and as an executive within two of them or a co-founder and a leader one of them is in a more traditional fashion and the other one is in a less traditional fashion so i'll talk a little bit about both but backing up to what is an accelerator so an accelerator is really a place you go to to access resources people tools etc as a startup founder which are almost always under resourced you get to join an accelerator and get access to lots of resources typically you'll find lots of coaches and mentors advisors really whatever words you want to put on them it's basically people who have been through a journey of their own or have the ability to help you as a startup founder with your own journey okay so you'll get access to those kinds of resources also most accelerators give access to lots of tools that a startup is going to need like crm tools for their customer relationship management the cloud storage and cloud facilities like aws and google cloud and others like that other technologies like hubspot is another tool like in the crm space for example they're a great partner of ours and many other accelerators as well so you get access as a member within an accelerator to lots of tools that come at either free uh up to a certain amount and they're not in significant amounts they're typically into the five figures in some place uh cases um or massive discounts you know something on the order of 50 to 90 discounts on these tools and they're all just there to help you get your business going with lesser resources required out of pocket okay so one question you know and i don't know i have any particular order of my questions but to get the ball or kicked off so i mean so i've i've never been through an accelerator but i've had a lot of people that i've known that have gone through and you know the i've had i've heard mixed experiences you know some are they sing the praise of accelerator and some of our clients are go through accelerators and they've had great success and other times you'll hear people that are you know it's almost a cuss word or hey you know they they i went in they took my money or they you know they took a whole bunch of equity took over the company they didn't take it anywhere and so what you know how if people are looking and saying okay that sounds great you know i can get access to resources i can get mentor i can get guidance i've never been through this and i need you know i like that help and support how you know other than self-promoting and say yours is a great accelerate how in general do you find what is a good accelerator and one that will actually help versus one that's a little bit more snake oil or they just want they just want your money and as long as you keep paying they'll keep up or keep doing acceleration it's a good question and i'm not going to even remotely profess ours is the best out there ours there's a lot of good ones out there and yeah there's a lot of you know bad intended people as well um or bad intentions uh you know i would recommend looking at either name brands you know there are some big very very well known ones i wouldn't put my own in that level of category i'm talking about the y combinators 500 startups tech stars these are huge names big big names that have obviously you know you could go and research the reputations and what they do find some good information and make an informed decision there are others that are more niche in that they'll focus in say hardware or life sciences so they might be more verticalized fintech etc and again you can look at the various amount of research and feedback that you can find online the reviews also look there are two different types of accelerators there are those that invest they invest money in exchange in uh most cases for equity so they'll take an equity position the idea in that case is obvious they're looking to invest and they're very selective they'll typically take somewhere between one to two percent of the applicant pool so it's pretty tight to get into those because they're making you know investment decisions typically in the high five even as as much as into the low six figures so they're making investments in the tens or even north of a hundred thousand dollars normal ranges would be somewhere between say five to eight percent of the equity so just to give an idea so those accelerators they're less risky right because they're the ones taking the risk by putting up real hard dollars capital into the business and they're taking that in exchange for an equity position then there are others and mine fall into the second category i'm about to describe which charge so they'll charge a fee i find the fees typically nominal um they they'll charge something like ours charges around two thousand dollars and if you go through one of our partners you can even get a discount and it's a three-month program so it's and there's no equity taken so it's a pretty nominal cost if you want to preserve your equity these are the kinds of accelerators that do well by you you don't have to give up equity and then my other accelerator does take equity we charge a nominal fee but we do take an equity in again in exchange for access to all of the vast resources that i mentioned so i think looking and doing your homework and finding reviews i would recommend always asking to talk to people who have gone through the program and get those kinds of reference checks if you will of actual entrepreneurs who have been through the program if i were an entrepreneur going to vet various accelerators that's exactly what i would do and we're always very happy to give we're fortunate we have a lot of happy and enthusiastic entrepreneurs who've gone through both of the accelerators i'm i'm affiliated with and they love to talk and share their experiences good bad and indifferent you know we ask them to just be very honest with people they're out there in touch with so one now following because i think that's good advice and you know i i've heard you know both sides right inventory and i and i'll probably pepper you with lots of questions and this uh there's probably the lawyer would be coming out trying to get all to the heart of it but you know one of the questions i always have in it it's across the board so it's not just accelerators but it's anytime you get reviews from people you know if i referees i'm only going to give you the good reviews right meaning if i know that a client i'm less likely if a client is really unhappy with my service i'm not going to say go talk to them you know they'll give you the honest answer i'm usually going to say here are the ones that had a great experience and so if you're trying to you know so i think that getting the reviews is absolutely you should talk out actually talk with the people has gone through it and see if it makes sense for you but how do you you know aside from that for let's say you had and i'm making up the numbers 100 people that went through your accelerator 10 percent you know so 10 people actually liked it 90 didn't you refer me over to the 10 that liked it then it sounds like it's a great program even though 90 are unhappy so you know how do you i'm just trying to you know give people advices i think that they have there's it serves a good place in the market you can absolutely help people but i think that that's where if i were to hear the number one criticism is that they don't know which one to pick or they don't know if it's worth you know giving up equity in their company if they're getting value and it's hard to tell a lot of times on the front end it is really hard to tell and and by the way to your question of yes that you're going to be given a good reference right they're going to give you somebody who is going to speak your praises ask for multiple references and in many of the cases some of the companies one of my accelerators for example we post are portfolio companies so they're posted on a website go pick the two or three that you think are sound reasonable to you and ask if you could speak to people from those companies that way it's not somebody saying oh talk to my mom she'll tell you how good a son i am you know kind of thing so i understand your point exactly and i think it's fair but look for those ask for a variety don't settle on one or two ask for a number of reference points especially if the companies the portfolio companies are listed then you have access to say hey i looked through your portfolio i'd like to talk to someone from this this and this you know company that way you're picking the companies and it's kind of a you know a random draw so to say for the accelerator as to who you pick and ask for a reference with so that's one thing i would do again is if you have access to that um what was the rest of your the other side of your question i apologize i don't know it's probably bless you but but i'll piggyback on that one thing i found and again this is almost not even accelerators but across the board is sometimes as you add even if they you know they give you all the good referrals you can ask the referrals now who else do you know anybody else that's there anybody that didn't have their cohort yeah even people from their existing cohort yeah so that one's always one and then then you can get you know the one step removed of hey do you know anybody else that you've worked with or anybody that didn't like the program or anybody else you know is of that frame then you can kind of get the all sides of the thing because you know it's kind of like when i go to amazon and i see if there's a ton of five-star reviews or there's a ton of one-star reviews i usually figure the truth is somewhere in the middle meeting all the five star reviews us probably paid reviews all the one star reviews are just people that are never happy but those three maybe four star reviews are going to be where the truth is and so that's how i always figure if you can kind of get that one step removed this one so so now jumping over to a bit more of the acceleration so you mentioned that there's kind of a couple different types of accelerators right one is it's a we'll take your you know take a portion of the equity and we'll take the risk and then you have the other that's the the paid one where you know you come in you put it or make a payment but you get to keep the equity and i could probably make arguments on both sides right on the one side you know taking some equity means that they have skin in the game that they want you to be successful because your success is their success and you know on the and on the flip side you know the ones that you come in and pay you get to keep all the equity so you're saying hey i don't have to come in they're not taking an advantage on me because they want to take all the equity and sure oh and then then i walk out and i don't have anything left for my own company and ownership they got all they cherry-pick all the good ideas so you know do you have a preference of one model or is there a better model depending on where you're at or what kind of business you're at or kind of you know any guidance on you know choosing which path makes more sense yeah so i'll talk specifically about three models the the big model um that a lot of the bigger brands have used um is they'll invest say a hundred thousand dollars just for a round figure sometimes it's a hundred and a quarter uh let's use a hundred and a quarter actually so they'll invest let's say twenty-five thousand dollars for say eight percent of your company so they're valuing you you know at whatever that valuation is uh roughly 12 times about a two and a half million dollar valuation i think that would amount to and what they'll do is they'll do what's called a claw back in the industry it's kind of known as a claw back so they'll say we're going to give you 125 000 investment for 8 but we're going to charge you 25 000 for all of our curriculum and acceleration so you're really going net a hundred thousand dollars but you've given that up for the eight percent because you paid them 25 of 125 back that's why they call it a clawback i'll give you 125 but you got to give me 25 for the acceleration um so that is a very expensive deal that is a hugely expensive deal because you've now given up eight percent for a hundred thousand so you're worth a lot less than if you got eight percent for 125 000 because they did that clawback and and so i i would urge people to just do the math and when you're offered a deal like that look at how much is the clawback how much do they charge you out of that investment of in my example one and a quarter to take the curriculum because that you're giving up equity for all of the full amount even though you're only netting cash for this the smaller amount so that's one thing to be aware of and again just do the math i'm not saying it's good bad just do the math and make an informed decision the other kind is so we have one of my accelerators we charge something on the order of 400 a month for three months and we take a four percent um equity position in the form of a stock warrant which really is just giving us it's like a stock option it gives us as a company the right to purchase four percent of the equity of that company for a period of time at a cr at an agreed upon price typically we do it at the current price and so you're paying a little bit of money out of pocket you are giving up the right to this company in this in this example to acquire four percent of your equity at a for a long period of time at today's price so there's you know some there's incentive because the real value of the company gets is enhancing the value of that equity not the 400 a month that's not doing anything substantive for the company and then the third example is my virtual accelerator you mentioned the name earlier silicon valley in your pocket entirely virtual and we charge if a company came through one of our affiliate partners and they offer a discount they charge 1 200 for a 13 week or three month program so it's less than a hundred dollars a week that an entrepreneur invests in themselves by taking an acceleration program there is no equity involved at all so that's a very reasonable program and in our example that example if you did come through an affiliate partner which we typically refer people through they'll pay twelve hundred dollars and immediately they get access to all the cloud credits from amazon and google both of which are north of ten thousand dollars you don't get one or the other you get both you get up to 170 some thousand dollars worth of benefits for twelve hundred dollars i mean it's actually they can be very good deals and give you access to these kinds of tools and resources at a substantially better price than you would get if you were on your own so those are the three types of accelerators i'm not judging between which is the best i think it's independent you know an independent decision each entrepreneur has to make for themselves okay well but i'm gonna i'll ask the question which is what all good attorneys do when they want to get the answer they want to do right they ask the question differently if you have a startup that you started today which of the three bottles would you pick i personally as an entrepreneur and i was a serial entrepreneur for many years of my own uh journey my own career i always believed that the equity was going to be the most valuable currency it might be the easiest currency for me today at the beginning so to say at the very early stages of my business it's a currency i might be able to use in lieu of cash and cash is often in short supply but i always believed that my equity was going to be worth far more than the cash that it would be in exchange for and so i wanted to preserve cash so i would look to the silicon valley in your pocket style pricing where i'm paying under 100 a week and i'm getting access to really you know amazingly qualified and experienced resources in addition to all those tools that i was mentioning and cloud credits et cetera um that one is it feels like if you can't invest 100 less than a hundred dollars a week in your own business for three months in the beginning you probably have other considerations to think about if that's too much to invest so to say um so to me i that's the only model of the three that actually preserves there's no equity exchange in this case the others each have equity one is a four percent stock warrant so it's giving somebody the option to buy your equity and in the other it's oftentimes an investment in exchange for equity okay no i think that makes sense so now jumping topics just a little bit so one thing that we talked a little bit before the the podcast was on what would be i think you said venture fund or backable companies not necessarily they are backed but they could be backable and you know i guess i'm gonna back up i'll ask that question just a minute what the preloading question um so you take you go through the accelerator you know so you haven't i guess i'll start back even further when you want to go through and you have an idea what stage should you approach an accelerator meaning it should it be hey i've got an idea i need mentorship on how to do prototyping and modeling and you know intellectual property and llc's should it be at that stage you go to accelerator should you already have you know your idea fleshed out to where you're kind of getting to the prototype stage should it be post prototype and you have a minimally viable product or which you know what phase do you go to a an accelerator with that's a good question and various accelerators do focus on different phases so we tend to focus on seed and precede and that's normally a funding level but that generally implies that they are very early stage so they might not have a what industry folks would call an mvp they may not have a minimum viable product they may have an idea and a business concept and they're fleshing out if you will the business model the go-to-market strategy uh the value proposition all these things so we we typically see people at that stage where they don't yet have a product um in the market they're not for the most part generating revenue some are but that that's more the exception than the rule and so pre you know pre-seed seed stage tend to be at that cat level of status in a company if you get into a later stage where it's kind of closer to series a then they've probably got a product out in the market they've probably got customers and some revenue generation happening uh in general that's not to be you know it's not a that brush doesn't hit everybody in those categories but it hits a lot and i think it's good i love the fact to that i'm getting to do now at this stage of my life and career what i wished existed when i was a serial entrepreneur i get to now provide that kind of experience and guidance from from my own experience as an entrepreneur myself to entrepreneurs today and i actually made a decision in 2015 when i started down this journey of starting and running accelerators that i just wanted to go do for other entrepreneurs that had really good ideas uh what i wished i had when i was the entrepreneur because i actually thought i'm probably better at helping a lot of entrepreneurs and i'll probably have more fun than focusing in on another new idea and creating a new entrepreneurial you know one-off of my own so that was a conscious decision to do that okay so if i were to i think just steal down and if i'm putting words in your mouth stop me you know when they should do it is probably when they're kind of almost at the seed round meaning that they've got maybe they've got a business plan or they know at least the beginnings of one or they've got you know a minimally viable product or they have something tangible so probably not necessarily the idea stage of hey i had this idea now help me get it in fruition but they put in a little bit of blood sweat effort tears maybe a little bit their own money and they developed it to a point that now okay we can help you accelerate or take to the next level is that about right i think that's fair i think um you know we even have for example a relationship with the company strike if you're familiar with the big payments player they have a program called strike atlas which even helps companies get formed so it can take an entrepreneur who has an idea and wants to put say a delaware c corporation um in many cases underneath it right and build the business as in that corporate structure so they might come to us without having any corporate structure it could be in the mid to later idea stages and now they want to put an entity together and go get venture funding for that entity so it's not unusual for us to see some companies even at that stage most of the companies we see typically have an entity formed already sometimes it's an entity structure we don't necessarily suggest for investments meaning they might have it as an llc or wherever they got their guidance they might have it as an s corp these are more challenging entity structures to get finding funding from from third-party investors but typically we we see companies that have some form of an entity formed if they don't we just help them through access to the stripe program that gets them a proper entity structured for investors okay no i think that makes good sense so now i'll jump to my next question which is when i started out and then backed up at which is you you talked a little bit about what venture backable means and what you know so what does that mean what do you when you're let's say you go through you get your mvp or you get your business plan together and you're looking to be venture back a bowl or beat and i would maybe need to find different i define the venture basketball is being at the at the level that venture capitalists or maybe angel investors depending on how you define those are looking to invest in money or otherwise or invest in the venture so what does venture back home mean or what is that level you need to be at yeah venture backable to us means that it is a business that has the characteristics that would generate enough return and and could grow enough scale etc that it could generate the kinds of returns that third-party investors are interested in so some of the businesses that don't count for example is venture backable if you were to say as an entrepreneur i want to create a uh a taco truck a lunch truck could be it could be a great business and maybe you can have 10 trucks maybe 20 trucks you know as you grow the business but that's more of a lifestyle business that's the term you'll hear frequently in the space lifestyle businesses they're not bad businesses there's no judgment about a lifestyle business they're just not typically the kinds of business that are going to reach the scale and provide the returns that a third-party investor is typically looking for when they're looking at investing in businesses similarly a services business i mean you're an ip attorney so you are in a services business yourself services businesses don't tend to have the multiples on valuation that a a more leveraged business so if i built an app and a billion people download my app that's pretty high leverage i'm sitting in my home building and writing code to build an app and a billion people can download it that's pretty high leverage you have to sell hours you're selling minutes and hours of a day well there's limit to that it's very non-scalable in the same way that like my software app example so services businesses and lifestyle businesses tend to have a little more challenge raising third-party investor capital what about what about software as a service or a sas company because that's kind of a service kind of not so how do you define that one those sas companies actually are probably a sweet spot for investors a sas company simply means that software as a service so what it typically implies it's not necessarily a given but it's it's pretty typically implied that a sas business is some kind of a recurring revenue subscription kind of a thing so for example i i mentioned one of our partners hubspot they're a crm solution well there's a monthly fee for using you know hubspot so what happens is in the sas business if it is in that format of a subscription and there's all sorts of i mean i use them as one of uh a gazillion examples of companies one people might know is netflix right netflix very very simple right it's a subscription the beauty of businesses like that is you sell once but you collect revenue all the time every new dollar of revenue doesn't require a new transaction or a new customer it's sell once and yet i'm sure you know many you maybe yourself and many of your viewers i'm sure have netflix so they subscribe they pay their 8 10 11 12 bucks a month whatever it may be most people don't know their netflix monthly fee by the way in my experience once you've got a monthly fee period you usually forget about it you'd have to go look it up because you can't remember it's on a an auto charge to a credit card but what they know is they watch it enough to justify whatever the price range they have in their mind is right right and that is a great business because you think about a netflix every new dollar of revenue they can start every year without a new customer and still count on hundreds of millions of dollars of revenue from their existing install base so sas businesses that operate with that type of a model um are very uh lucrative businesses uh in potential you know basics if they become successful very investable very leverageable like that okay no i think that makes sense so all right so the rest and i agree i mean and i and i do work in this at least one i and i met and i can't remember if i mentioned before so i do i split my time between a few startups i'm a part of and i do and then i also do miller ip law um but i certainly get on the ip law side it is a heart but you know it's compounded if you go into and i'm going off on a tangent for just a second but the harder thing is even in legal field is you know first of all it's hard to do a multiple as you said because a lot of it is a book of business right and you can put a price on it but a lot of times the people are more with that person not necessarily with the law firm right so they like an attorney or you know a couple attorneys or that but it's you know with exceptions but generally they're saying that that person leaves i may not stay at the law firm and so it's hard to hard to put a multiple because it's almost on the person but then on the legal side and one you know this is my tangent or my rabbit hole it's even one side because most states they have rules that you can't even have owners in the in the law firm unless you're a an actual attorney so then it makes it double or twice as hard and so i you know the legal field gives you kind of a double whammy where you know it's not invent they're very investable and you can't even get investors even if you could convince them that it's investable and so it makes it so a lot of people have a hard time starting in the legal field to actually build a book because you know there's a lot of other companies you go and you get investors or you go get people that are other partners in that and yet in legal field you're a lot more limited so i'm always at the opinion that they should do away with that but that's a whole longer rabbit hole that we could go down at some point yeah no it makes sense and you're right it does make it the the characteristics you're describing if i strip it back from the law firm if i just said here's the characteristics of a business would you invest most investors would look at those characteristics and say that's not highly leveraged as an investment opportunity the potential is lesser than say a sas business or something like that so it would be less desirable as an investor to look at a business with those characteristics all right well we're getting towards the end of podcast i'll ask one more question and then and then maybe i'll still jump even though it's the expert one you've had enough uh experience with startups and doing your own and that that i'll still ask my two questions i always ask at the end but before i do that so you you work with a lot of startups small businesses you know people are going through the accelerator people that have big aspirations and you know all those things what is the you know top one or two mistakes that you see most businesses make whether it's going to accelerate or not that you would guide or counsel them to avoid so i would say one thing i see happen very very regularly is that companies think or founders think they've found a solution to a problem that in their mind exists but um this is not my statistic i'm citing it in 42 of the business failure startup failures what it turns out to be is there really is no market need and so you have to do validation of the problem you're solving for and the need for the solution you're bringing to market a lot of founders just presume that their instinct is right or the the way they interpret and perceive the problem is very common and like i said 42 it is the number one reason startups fail is no no actual market need so do the proper validation of the problem you're solving for and the solution as an actual and real solution to that problem that's a big big thing the other thing i see happen with i'd say 90 of the time or more in the vast vast majority of the time is founders present to investors like myself or others um they'll talk about a lot of features and um i i like to say they talk in concepts and statistics that's a really hard thing for most people to absorb and consume and interpret and so we recommend a lot present the problem in a way that is really relatable to your audience and so i'll give you just a small example i had one gentleman who's the founder of a company that did blood tests to identify cancers and it was actually quite effective um to identify cancers very early on through a fairly simple and uh non-invasive blood test and his problem slide when he presented that that's typically the first slide out on a on a pitch deck his problem slide had four charts in a quadrant uh four quadrants on the slide and he was showing the ineffectiveness if you will the uh just of other methods of detecting cancer today and i i kind of said to him jokingly i said you know by the time you're done explaining this slide i have cancer like you got to get through this stuff way faster and in a way that i can relate to and so i lost a family member my father passed from cancer and so it was very near and dear to me and if you ask people hey do you know anyone or have you yourself experienced you know your friends family loved ones or yourself experienced cancer most people will say yes so we changed up his problem slide was a photograph of his cousin who died of late stage detective breast cancer and he was super close with her and so the minute he starts saying who she is and why she's not here and but jeez if they had a solution that could have identified her cancer earlier maybe she'd be here with us on this call like that's a very powerful and relatable everybody can relate to that and that is the kind of messaging the way entrepreneurs or founders message has to be thought of from the recipients or the listeners perspective not their perspective and i often times see that happen um in most cases with founders presenting their their their widgets or their solutions all right no i think that's good good counsel good advice the one i'd always so on top of that you know in my more limited experiences when people come in and say now we've got this huge market and it's a multi-billion dollar market if we only capture one or two percent of that market think about how much money we're going to make and i don't know how we're going to capture but we only have to capture this one little percentage and then we're going to be rich absolutely right we recommend against what you're describing i call the top down we don't do top-down market sizing i don't want to hear it's a multi-billion and i need a small sliver we recommend doing a three-year bottoms up forecast because that shows the investors you what steps you're taking tomorrow next week next month next quarter next six months next year all the way for 36 months that way they can see that you've actually thought about it you're not being what i would call lazy and just saying it's a 10 billion dollar market i understand it will be a you know 100 million business that's that's pretty lazy um because you're not really saying how you're going to do it exactly all the questions you just asked so we recommend uh very strongly against top-down uh market sizing and only doing a three-year bottoms up no all right so we there's a whole bunch more rabbit holes we go down along there but in the for the keeping the the podcast a reasonable late we'll forgo that this let's go around but i always ask and i usually don't ask the experts but you're you're you got to be the special exception um for the expert one i normally on the podcast the last two questions at the end and so you can base it off of previous startups you've gone through and that but what's the one biggest uh bit or worst business mistake you've ever made the worst business mistake i've made i'm very comfortable to talk about it and i do get asked this a lot in just speaking about kind of the startup ecosystem the worst business mistake i made i think was timing not understanding timing we had brought a solution out into the market and it was way premature the market just wasn't ready we were my colleagues and i in the business were essentially kind of uh early you know early testers of stuff evangelists of new tech and innovation but that doesn't create a mass market and to give you a sense of it it was literally 22 years ago 1998. we had built the technology much like zoom like we're talking on right now it was video conferencing audio conferencing exactly as we're experiencing data collaboration shared whiteboards etc and you know the internet infrastructure if you will with dsl was an amazing in innovation at that time so it wasn't quite able to deliver the user experience it was ahead of its time and we persisted and tried to kind of force a little bit of a square peg into a round hole by saying no it's ready now we did some good things in that business we partnered with apple and we had some amazing experiences doing some business aspects of what we did but i think not recognizing that we were we were premature in the market timing of our product okay no i think that that that's certainly a mistake but it's one that you know especially if you're on air on the techie side that you can talk yourself and these are the awesome features and people may not be writing almost the internet and that almost goes back to our earlier conversation on netflix i like to read and i always have to laugh my wife always gives me a hard time that i work with startups and do my own startups and then when i have free time i like to read books about startups which is you know that's my hobby but on the one that i read recently was on netflix and they looked at you know this was very burgeoning uh dvds dvds coming out and vhs is still being very popular but starting to phase out but when they started there was like a thousand or 1500 dvds period out in the marketplace and yet they looked at you know if could we do vhs's and they basically came to the conclusion vhs are gonna be way too expensive to ship we're never gonna be a male to make enough money off of it and so they looked at it and so that was one where they got the timing just right but they also waited a couple years before it really caught up you know that was when they should strip dvds now they still do that people off a lot of times don't even remember they ship dvds um and we actually very side note me and my wife actually still use a dvd service all the time because we use that for our date night movie because you can get new releases a lot of times aren't on netflix or you know on the streaming service um but so i think that that's one where timing is a big and you have to look at not just as a cool technology but is it going to be acceptable to the marketplace so that's really nice so second question i always ask and that um is now if you're talking to a startup small business somebody that's just getting into it just getting started what would be the one piece of advice you give them uh that's interesting i've been asked this question before as well and my first answer is ignore the nose meaning so many people you as an entrepreneur and it happened to me as well that you talked to you go hey we think this is an amazing idea a lot of people go well is it really and they'll poke holes at it and i believe you know you have to as an entrepreneur if you've come up with an idea and you have belief in that idea run that ground ball out don't take someone else's word that it's a bad idea it may prove to be a bad idea but prove that to yourself don't take someone else's word for it because you'll always be looking back and asking what if and you don't want to live a life as an entrepreneur that way you want to you want to decide for yourself if you know what they're right or you know what they're wrong and in many cases i think there are a lot of examples of entrepreneurial endeavors that there were more naysayers in the beginning and yet they become phenomenally successful businesses so ignore the nose and i'll even throw one more on top of that if you permit me sure go ahead yeah the other answer i would give to that is become really really good at communicating your message because i don't care how great an idea you have if you can't communicate it effectively to the stakeholders that you need to that could be investors partners clients etc other employees or prospects you won't go very far so you're gonna have to learn to get very good at communicating or surround yourself with people who are you know stay in your in your swim lane if you're an entrepreneur but at least surround yourself with people who do the things that are necessary to succeed yeah and i'd almost caveat that with you know surround you either and i completely agree on you know being a communicator but i think you've either got it's got to be someone that's the founder or part of the company meaning you can't just sometimes that you get into that if i just go get a good sales guy he's going to make all the difference in her business it's going to turn it around we need a good marketing guy or a good sales guy i'm not saying they don't they aren't a good thing for business don't take me wrong but if if you as a founder or co-founder if you can't explain it if you can't make it understandable you're never going to succeed just with a good sales guy so i think you've got to either you or someone very high level founder c level on the team has to be able to communicate your message very clearly because most of the time when you get in especially if you're in the business or venture or others people don't want to hear from the sales guy they want to hear from the actual founder or someone that's actually there on the business i agree with your point and i would say you know you mentioned a founder or a co-founder i would uh i would and i'm not suggesting when you use the word founder you implied this but i interpret it as a solo founder i often when i get approached by solo founders and this did happen in one particular example i can think of off the top of my head a solo founder came to me i liked the gentleman very much i liked his idea quite a bit but i was concerned and i said to him go find yourself a really solid co-founder come back and meet with me with that person and if i like that person then i'll invest and he asked me why and i said because i don't invest in solo founders because i run the risk of the greyhound bus syndrome and he looked at me talked his head he said what do you mean and i said let's say we meet in a coffee shop and we leave we had a good meeting we you step off the curb to cross over to the street and you get run over by greyhound bus my investment's gone you have no succession plan there's no one to carry the torch of the business forward so did i really invest in a business in that scenario the answer is no and so if you really want to get investors to invest in your business there has to be what i would just call the succession plan or somebody to carry the torch forward outside of maybe the one of the co-founders there needs to be a another co-founder and i often recommend doing that in a balanced way if you're a business guy get a tech co-founder if you're a tech guy get a business co-founder if you're a business woman get a technical woman that's a co-founder you know mix and mingle it however you do it have a a mix of skills a balanced set of skills don't get people just like you yeah no and i i completely agree on all of that so yeah so well lots of more things that we could talk through but as we wrap up the podcast i appreciate you coming on so people want to get involved use your accelerator reach out with questions or any of the above or just pick your brain or ask how to get venture or whatnot what's the best way to connect up with you or reach out they can contact me via our website at www.siliconvalleyinyourpocket.com to shorten it you can just use the initialsdiyp.com or you can just email me at jeff sviyp.com and i'd be more than happy to help any of your listeners with any questions they have well i certainly invite everybody to check you out and if it if they line up with what you guys are looking for and it'd be a good match i absolutely think that it'd be a worthwhile program to engage with so thank you again for coming on it's been a pleasure it's been fun to talk through uh all the things the expertise that you're offering and all the advice you can give to the startups and small businesses getting started for those of you that are either wanting to be an expert or wanting to be just a regular guest on the podcast and tell your story feel free to go to inventivejourneyguest.com and apply to be on the podcast and for those of you that are listeners make sure to subscribe so you can hear all the new episodes as they come out and finally if you need any help with any pads and trademarks feel free to reach out to us at miller ip law jeff thank you again for coming on it's been a pleasure and uh hopefully uh people will able or keep us using your accelerator and you'll be able to help lots of startups and small businesses be a raging success fantastic devin thank you so much i look forward to staying in touch with you over the time here and much appreciate you inviting me on today all right have a good one take care [Music] you English (auto-generated) All Startup company Sales Related Recently uploaded