Creating something out of nothing - the Canopy Lx journey so far

We have now been 6 weeks into the Canopy Lisbon journey and here are the results!  Alongside we also have a 5 star rating from our members on facebook so far which is super awesome to see.

The journey is one we will start to tell more about as we go, because it really is a story of making something out of nothing.  We are bootstrapping the Canopy into existence from a zero euro startup balance.  Through revenues we are able to fund things, or else as founders we each have to put our hands into our own wallets and find a way to get things done.

For this phase as well as our own ingenuity we are completely reliant on the kindnesses of many people.  The list of stakeholders and interested parties - people who want to help us make it work - is huge.  Some of friends and family.  Others are customers, suppliers, our landlord, friends of friends and even strangers who have seen the mission we are on as something they want to support.

So far we have had contributions in terms of Chairs, desks, pictures, cutlery, fridges, wooden pallets, a shared risk lease agreement and most preciously time.  One of my personal favourite moments was the crowdsourced party to paint the new space.  Friends, future members of Canopy community and many children came along and helped us make the walls look clean and fresh with a new coat of paint.  It was a hot Saturday and people worked for many hours.  It was awesome to be part of.

So for founders we are very grateful for this support and the reality is it is helping us to believe that we bring something of value to the community here.  The co-working is one part.  The mentorship another and the incubation we hope will be our most impactful contribution.

It is also helping us to mentor and coach other people who are in the phase.  We are literally sitting in a working MVP.  Looking around you can see 100 or more areas that could be better.  You can also see through our photos the 5 iterations we have already been through to make things better.

Right now the first construction work in the space is taking place.  It has been a customer driven change - to accommodate a new team moving in very soon.  It's amazing how quickly this is all moving.

If you would like to see more of the story then come by to Canopy any day - Rua Dom Luis I, Number 3, Piso 2 and say hello.  Watch out also for our VLog which we will be starting in the next couple of weeks.

S.

Why I love the Startup Leadership Program

This year I have taken on the running of the Startup Leadership Program chapter in Lisbon for its second year of operation.  We are just four modules in and I have to confess I love it!

The whole spirit of the SLP is about helping first time founders to have a more rounded view of the skills they need to make a success of their startup journey.  It's like an Executive MBA over 15 modules.

The hardest bit about the format is the commitment in terms of time.  We run a module every two weeks on a Monday evening from 7pm through to 10pm, with people arriving from 6:30pm and invariably discussions or mentoring go on through to 10:30/11:00.  As a family guy this is not easy for me, and I recognise not always easy for the attendees on the course either.  Our choice to be there is therefore all the more strengthened!

So far we have 16 people on the cohort, all first time founders with two not for profits in the mix.  This is more than double the attendees from last year so it's trending in the right direction, probably reflective of how Lisbon is growing as a startup city and that year one added good value to those that took part.

SLP is a not for profit.  It means all the fees go into running the program.  There is no equity exchanged either.  We pick up some sponsorship for the food, drinks and venue.  (thank you for that Startup Lisboa, Compal and Dominos) and use some of the money to send people onto pitch competitions or visit other chapters.  None of the team that run things locally receive payment.

At its heart the course aims to inspire people to change the world - to build startups that deliver real value to humanity as well as financially.

The founder - Anupendra - is a great guy and very inspirational too.  Based in Boston he has managed to create the global organisation that runs across 27 cities as a side endeavour to his day job as a corporate VC.

So, why do I love it so much?  Well experiences like this Monday really make it.
We took a subject like termsheets which can be quite hard for first time founders (and experienced ones too).  The class CEO (one of the cohort) had spent a lot of time learning about the subject and preparing to share the knowledge with the group.  We had four wonderful mentors who volunteered their time to come and help out - bringing real life legal, accounting and entrepreneurial experience to share with the group.  Their interactions were also fantastic.  Of course there was the cohort who all turned up fresh and ready to go at the end of their days and made it so much fun.  They got out what they put in!

And now to the real kicker -> the reason I love it so much ... at 10:30pm when everyone had finished chatting and exchanging ideas I managed to get them out of the building and there on the street as I got into my uber to go home was a group of about 10/12 working out where they could go next to hang out and continue their exchange.  One member of the group was an SLP alumni who was visiting from India and came by to say hello.  He instantly found a new family to welcome him to Lisbon and the entire group was full of energy for their startup journeys and also for each other.

Wonderful!  What's not to love about that!

Already looking forward to the 12th December!  If you are interested come along to check things out.  It would be great to have you there particularly if you are an alum visiting from out of town.

S.

Too old to do a startup?

I saw an article the other day that headlined "Yes, you can do your startup when you are 45!" and it made me smile.  I'd never even contemplated that it might not!  But it seems that some people really do think that this stuff is just for the "youth of today".  A game reserved for the so called millennials (and even younger) as a right of passage, an almost expected part of natural progression from seeds sown by celebs around the world - some of whom have gone on to be President!  

So, I am 43, involved with lots of startups and have been running my own businesses since the age of 26.  Don't feel like stopping, but do very much recognise that the challenges I face now in terms of balancing my passion for entrepreneurship with the other priorities, challenges and joys in my life are very different to when I first started.

Back at the age of 26 I was able to devote significant hours across every day to my ideas and to furthering the business.  Whatever it needed, whatever it took 80, 90, 100+ hours per week I found a way to make it happen.  And despite how tired I became at times, there was aways some resilience there.  Travel too was a big part of it, and a lot of this took place in anti social times.  There were casualties along the way to health, friendships and even relationships but the businesses kept surviving and growing (despite the many setbacks that arose).

My attitude to risk was also different.  There's always a high likelihood of failure in being an entrepreneur but at 26 I was not even remotely afraid of the potential impact.  Give back the keys on an apartment - absolutely!  Find a job - easy!  Declare bankruptcy - messy, but always a contingency option!

Interestingly back then I was quite creative in solving problems, and built a lot of solutions from first principles without the need of guidance, education or reading.  My inexperience when it became a limiting factor brought me to mentors and others around me for help or occasionally I just got got plain stuck or didn't listen.  

Sometimes I felt pretty uncomfortable asking 'ignorant' questions, but if something stood between me and success I felt compelled to find a way round it.  When I didn't do that, there were often consequences I didn't enjoy, and that feeling was worse than the potential embarrassment of asking the question.

Now, I have a lot more experience, and can solve the 'familiar problems' that come up time and time again quite efficiently.  There are 'battle scars' on my back, IP in my kit bag and things I can reuse to handle matters that arise.  But these themselves can occasionally be limiters to creativity, because I have to think through and then past them rather than just seeing the problem for what it is and addressing it uniquely in that situation.  

Emotionally through these journeys I believe I'm a lot more stable and less stressed by the environment, partly because of the reassurance I have from completing the full embryo to exit of a number of entities.  There is always an awareness of potential failure though, which burns and gnaws at times.

A big change since my twenties and early 30s is that I now have my own beautiful family, and there is time they need and time/experiences I want to share with them.  Meeting the ebbs and flows of startup survival while also being part of family routines, disrupted sleep patterns, unpredictable cash flows, long planned vacations and above all being present is not particularly easy and I can't say I am the best at it.  I'm also not the best at saying 'No' to things, particularly when its bringing something new to the world.  This is an area I am consciously working on.

Despite all the reason, reading, feedback and logic to the contrary I instinctively blink when I see a business need and survival issues.  I'm also notoriously bad at being consistent and proactive when things go well for long periods of time.  It's not complacency, I just don't find it as much fun when times are easy and something in me switches off until an emergency arises!  That vibe of new businesses in their first 18 to 24 months seems to be central to my DNA.  

So how will it look 10 years from now, or even 20.  Will I still have the desire or energy to drive a new business?  Well I cant say for sure, but I've certainly met many people in their 50s and 60s who have that kind of hootzspa and I really hope I end up being one of those.   Will I look back and know for sure if the 'juice was worth the squeeze' with the compromises and adjustments I asked of myself or others?

One thing is certain in my mind though - I don't believe that being an entrepreneur is for any one single demographic in terms of age, gender, education, background or orientation but that put simply some people are made for it and some people aren't.  The reasons for their success, or otherwise, will sometimes have common factors but often no two stories are the same.  No two paths to success are similar enough to truly find a cohorent common denominator.  

I've met and shared time with entrepreneurs & Innovators on five continents, in multiple sectors and who have been driving businesses at various stages.  It's been a wondrous experience to meet amazing people of all walks of life who have inspired me and amazed me with what they have endured, achieved and survived in their quests.  Some of them I was able to help.  Some helped me and others achieved heights I will never find.

Amongst it all the most common thread I have identified is that they were endowed with the will to make things succeed.  That when their will was stronger than all the dissent around them the business found its own way to survive and flourish.  Regardless of their unique stories and everything going on around them there was always a point where you could see that quality in their eyes.

If you haven't got that in your DNA, it really doesn't matter how many years you have (or haven't) been on the planet.  You're just better off doing something else.  As for the author of the article that first got me started on this post - perhaps you and I should have a drink some time and chat about this stuff :) 

S.

Virtual Incubation Program - For first time founders all around the world

How are you going to change the world?  It's a question that buzzes around my head.  I've delivered impactful projects and programs in several countries but still feel I can do more and never quite feel like I've done enough.  At the core of my mission is to empower entrepreneurs to live their dreams.  In turn their success will transform lives and communities.  At my own core, I have never felt more successful or fulfilled than when I have helped others to go on and achieve their potential.

Something I have been working out in my head for a while now is how to do virtual incubation for first time founders.  There were two drivers for it really, the first being that for early stage startups the idea of keeping to a rigid schedule can be tough.  The dynamics for the startup are hard enough to balance and so I wanted to find a way to deliver support more on their terms.  Then, there was my experience of mentoring in the USA, India, UK and Portugal.  So many of the lessons were transferable,  but it was always stuck in my head - not easy for others to reach without me being there in person.

As I started to run the Startup Leadership Program in Lisbon this year a few different thoughts came together, in particular how powerful a cohort can be in supporting each other in their early stage ideas.   So I've built a program that I hope will strike a chord with first time founders and am delivering it in a way that is accessible to them all over the world.

It's launching on 14th December - by Webex with the module "How not to be one of the 9 - Why startups fail" and builds on some studies along with personal experience of how and why so many startups fail for avoidable, predictable reasons.  Webex sessions will then be held once per month after that for 12 months.

This, I would say is the MVP!  If you are interested to be an early adopted please signup here by typeform: https://canopycity.typeform.com/to/LGqE8N

Alongside these modules are monthly cohort mentoring sessions by google hangout, one on one mentoring sessions via Savvy.is and a slack group for open Q&A and adhoc support.

Supporting materials, templates and vids will be made available via Slack across the year too.
Modules list: 

1. Why startups fail, 
2. Startup Presentation Skills, 
3. Launching Lean, 
4. Building a founder team, 
5. Raising seed funds, 
6. Term Sheets, 
7. Startup Leadership vs Startup Management, 
8. Managing Board, 
9. Entrepreneurial Sales, 
10. Marking and PR, 
11. Hiring and Firing, 
12. Going International.

The entire thing will close with a Video Pitch Session - where attendees will have 60seconds to pitch their idea in a google hangout and receive feedback from a panel of entrepreneurs and investors.
Places are limited to 15 on this first cohort, with up to 5 places available to Not for Profit founders.
Price options: $50 per month or $500 for the 12 month program***. 


For each person accepted onto the program we will include 4 x one day guest passes for use at Canopy.city locations.


Not for Profit founders are free of charge

*** Make a trade - if it's too early for you to afford this program don't worry.  Make a trade in something that you can add to the program or to Canopy.  Perhaps some digital marketing skills / time or a premium account to your platform, or some home cooking.  Whatever it is, we're open to ideas :) 

If you are a first time founder of an early stage startup or not for profit then I've built this for you.  As we go through the program I'll keep asking you for feedback and ideas to improve things so that we create the most impactful and enjoyable experience for everyone.

#LiveYourDreams
S.

Route 1 Football - the startup treasure map

When you go on any adventure it is a good idea to have a map!  Sometimes a detailed map is important, particularly if you are heading off road and want to know the contours and gradients of the hills.  Sometimes a simple map is all you need!  To that end, in todays post I provide a treasure map of sorts that depicts a 'Route 1 Football' journey for a startup.

At the beginning there is an idea.  "You are Here' kind of point.  Through the MVP (Minimum Viable Product) phase the founders are trying to shape that idea into something that the market wants and needs.  With enough credibility from this phase there is the potential to raise funds, a small amount - roughly speaking up to 500K.

Seed funds are typically used to round out the platform that was put together quickly and with limited scope for a specific set of target demographic.  With this more robust platform the rest of the demographic can be reached.  Then the credentials are needed to raise the next phase of capital -Series A.

With Series A cash, the typical drive is to expand from the first target demographic to another, perhaps more profitable set.  Rarely is seed or Series A cash used to go international.  It might however be to reach a different home state geography.

Over subsequent rounds (Series B, C, D, ...'N'), the capital is used to expand the team, the platform, the demographics, the geographies or the product lines until the point where there is a tangible exit available.

Each round of funds is raised with a specific purpose.  Trying to do too much in any round is sure fire way to secure failure / death to the startup.

Exits principally take three positive forms, and one negative one - Death - which of course may happen at any time.  Of the positive outcomes, the most commonly discussed is IPO (Initial Public Offering) where the equity of the company becomes publicly traded on somewhere like the NASDAQ.  For this to be achieved there usually needs to be more than hype.  There needs to be predictable revenues and robust management structures.  With this kind of organisation another legitimate exit approach is to run it as a mature Private corporation, that pays dividends to its original founders and equity holders.

The third popular exit point is that of a trade sale, typically to a larger - probably publicly traded organisation.  Such organisations seek the innovation, the team, the customers or sometimes just the revenues of the startup and are prepared to pay for them in the belief that they can make more in the long term through the acquisition. 

From idea to exit is typically a horizon of 5 to 7 years.  Any exit prior to that will be for reasons unique to that situation.  Perhaps an acquihire or a spoiler purchase (to remove the idea from the market) or perhaps a purchase by another, better funded, startup looking to grow even quicker.

The use of growth funds is to accelerate the journey faster than could be achieved through revenues / profits.  It is predicated on the notion that innovation can take a while to mature, and that to bring any meaningful innovation to market there has to be a period (of whatever size) where it cannot be supported by its own revenues. 

The people and institutions who invest along the way do so knowing that the startup has a high chance of failure along the way.  Within the first two years up to 90% of all startups will fail and the risk profile gets easier as the years go on.  When balancing their portfolios the investors must therefore seek a multiple of their investment over time.  A 10X return on seed investment is not unreasonable alongside such high failure rates, although it may seem a very high price to pay compared to debt or other alternative mechanisms.

Please keep in mind that I throw this simple map out there as a reference point.  It's not designed to answer all questions or to be the only route for everyone to follow.  It's more of a benchmark from which you can bring some context to your own journey.  I hope you find it useful :)

S.

Get the Yes - Lessons in Startup Sales

Sales is all about getting the word YES!
Sounds simple, but everything else is just window dressing that surrounds that essential word.  You need to be able to provide something that people want and they have to be prepared to pay for it.

Early stage startups are full of teams that haven't done much of this before and people who may have done it before but not in the same context.  For example, "How do you sell something when you have a zero dollar marketing budget?" is a common area first time founders hit a brick wall.

So where to begin....here are my top 4 lessons learnt over the last years of success and failure at sales

Firstly, lets not pretend that startup sales (B2B or B2C) is a part time job.  It is full time, full on and essential.  Good deal flow alongside sustainable pipeline is life blood for the startup.  It is a founder responsibility.  You can't outsource it effectively and you can't delegate it effectively because it is too important to the very survivability of the new venture.

Secondly, lets not compromise our thinking about whether startup sales requires a lot of effort.  It is a hyper responsive, all in, double down, exhausting and continuously demanding activity in a startup that is living on the edge of the product roadmap and cash flows for the business.

Thirdly, lets also recognise that sales requires a particular kind of DNA and that DNA is a key influence on the development of the product, the team and the organisation.  It has to have a voice at the top table of decisions.  An equal voice, but not an unequal voice (up or down).

I've got great respect for people who are natural sales people.  I've met good and bad, and been good and bad at it myself.  Throughout it all I can tell you that a sales process is essential for the best sales people, as well as some form of appropriate tool that helps bring it all together.  That tool can be a spreadsheet or something likes Salesforce.com, but it must be there and integrated to the process for all.

(More about Sales process another time)

Surrounding these four lessons is the acknowledgement that all the theory, planning and work that goes into sales amounts to nothing if you don't get that YES!

Stop failing before you even start - Explore and Validate then build

Lots of startups fail, it's true!  Of the many reasons for this, some are completely predictable and common to so many it could almost be called criminal.   It certainly can't be regarded as sustainable.

Take market validation for example.  Too many startup founders (me included) try to build product without rooting it in the true needs of the customer.  They perceive those needs through their own filters and in their own minds, but don't examine those needs enough with their target demographic and then the product doesn't get the traction they hope for when the market sees it.

Two tools I have found incredibly useful in this early stage (and also to repeatedly use in future stages of product evolution) of the development cycle are the Exploratory and Validation Interviews.

Put simply, the exploratory interview helps you understand your target demographic and their frame of reference.  The interview consists of two or three open questions like "tell me about your last experience going to x" and then listening to the answers.  

Validation interviews are where you take the key learnings from the exploratory interviews and present them to a new set of target demographic so they can validate what is most important to them.  A neat way to do this is with the use of cards - one card per learning - and putting them in front of the interviewee simply ask something like "when you last went to x, what was most important to you?".

They key to success with these tools is to ensure you don't bring your own frame of reference to bear on the subject.  No questions like - "if I built a system that did this would you buy it?".  Let their views and observations flow uninterrupted.  Record them.  Learn from them.  Rewatch and relearn regularly.

These tools are simple, cheap and effective.  You need some empathy, some confidence and an iphone along with a little bit of time to both plan and execute the interviews.  They become powerful when the number of interviews is increased to around 50.  100 accumulative across both sets (Exploratory and Validation) and there should be a really clear message coming through about what your target wants, why they want it and the value they see from having it.

The MVP should be built to address the top 1 (or maybe 2) areas that have been clearly identified as a priority by your target group - not by you!

Founders must never delegate these interviews and where possible these should always be done face to face.  The nuance and interpretation of both the answers and the body language are essential to the end result.  Founder instincts and insights are unique.  As much as I encourage the 'open filter' review, it is the special way that founders see the world that creates a difference in what comes next -> finding a solution.

Why do I keep forgetting this lesson?  I don't know!  

Why do so many others?  I am equally at a loss to comment.  

When we use these tools we are much more likely to build products that people want and need.  That must surely be our goal :)