Personally, I think David Heinemeier Hansson (DHH) is correct when he says that the VC, angel investment is a gamble, and that entrepreneurs should be very careful when taking money from investors. DHH is the founder of Ruby on Rails and Partner at 37Signals. I recently listend to an interview with DHH on a podcast, and I’ve been listening to DHH’s thoughts and philosophies ever since I started on my own entrepreneurial journey.
Bootstrapped Business VS Angel/VC-Funded Startup
When I was just starting out as an entrepreneur, I would listen to DHH’s point of view of the long-term, sustainable, profitable and bootstrapped business, and I would compare it with the view of actual angel investors, venture capitals and the general startup media’s portrayal of the hero entrepreneur who gets millions of dolars of investment.
My first ventures would all be bootstrapped. But as my startups gained traction, I did try out the angel, VC-route.
My most recent startup originally gained traction on a very smal team withe bootstrapped funds and a few grants. Nevertheless, when I joined an incubator, the pressures of getting an angel or VC investment started to influence me, and i thought: “Why not take the money?” And I did pitches in front of investors, met up with investors for coffee at their offices for “chats”, and eventually we did take money from an investment firm.
1) We were distracted with chasing money, rather than focusing on building value
While the experience was very useful to understand how to pitch, raise money and woo investors, I think we did waste alot of time trying to get money instead of actually building the business and providing more value to customers. DHH is right in that you lose focus and raising money ends up being like a “drug”, and you always are trying to get a bigger and bigger hit (infusion of cash from investors).
2) Investor has different values & agenda to us
What really bothered me in the end thought was not so much the waste of time, but what irked me was that the investor we ended up going with actually had different values to us. Not only that, they tried to heavily steer the direction of the company even though their number of shares was minimal and I felt they actually had no personal experience in certain matters that they were so adamant about. It felt as if they thought they knew the business better than we did, even though they had no entrepreneurial experience nor no experience in the field of the business. The investors really pushed us to make short-term profits and hitting those targets instead of considering about building long-term value for customers. They also forced us to make certain hires that was in their interest, but not in the interest of the business.
3) Investor did NOT help us when we needed it, even though it would have been so simple for them to do so
Furthermore, whenever we asked them for help, they never gave it. For example, we knew they had some contacts with certain clients and I asked them for an introduction and they said they would arrange it, but never did. That annoyed me. More and more we questioned their value to us. They couldn’t even do basic tasks such as following up something they said they would do to help us, and yet they would totally flip if we had different opinions to them and wanted to do other things our way. The attitude seemed to be that the investor just wanted to give us money, then dictate for us what to do, and then not even genuinely help us wout when we needed it. I now see the value of smart money, and if I were to do it all over again, I would not take their money. I would rather take investment from someone who truly would help us (at the very least, if it was simple for them to do), and to give us advice because they actually had first-hand experience as an entrepreneur in the same field as my business.
Can You Build a Profitable, Fun, Bootstrapped Business that Lasts 10+ Years?
Having sold that business, and having a few months break of reflecting on it all, I’m ready to move on and try another venture. This time around, though, I will take on DHH’s advice to go at it alone, bootstrap, and focus on a business that I am personally passionate about, without having to chase money and investors and getting tripped up by the whole vicious circle and reliance on funding. I’ve started businesses in a bootstrapped fashion, but never grew and sustained them over 10+ years, which DHH has done. I wonder if I can do it, and that’s what I’m aiming to do now as I move forward.
Are you stuck trying to figure out how to come up with a business idea for your next startup? This post will help you, based on my current experiences tryin to figure out a new business that I will launch.
Take Time to Think Through Your Business Ideas
In my post yesterday, I talked about how I recently sold my previous startup business, and I am now in the process of transitioning to move on to another idea. So this post is just as relevant for me right now as it is for you.
I’ve been reflecting on what sort of things I want in my next venture. What sort of factors should I consider for it? What makes it a good business idea versus one that will suck and won’t work?
3 Factors For Your Next Business Ideas
Here are 3 things to think about to help you brainstorm some business ideas for your next startup:
1) What are Your Passions & How Could You Turn That Into a Business?
Think about what you are passionate about. What gets you excited? What turns you on? Do you have a hobby that fixates your mind and attention? And what if you somehow turned that passion into an actual business?
It’s certainly not impossible. That’s something that I am personally trying to do right now. I love languages!!!!! So for my next venture, I am certainly thinking of ways to get into the language learning industry because I feel that I naturally am inclined in this area, and I would do well in it compared to others who aren’t passionate about it.
2) What are Your Skills & Connections & How Could You Use Them For Your Startup?
Consider your skills and connections. Even though you may be passionate about something, you may actually suck at it in terms of your skills. So another area to be brutally honest with yourself is in regard to your skillset, and your connections.
I’ve actually been learning languages for 10 years, and am very familiar with all the different ways to learn foreign languages. Not only that, I recently began teaching English in foreign countries to high school students, businesspeople, diplomats and lawyers. Therefore, I have skills in learning and teaching languages and I also have a number of networks and connections in the field.
3) What are Markets or Industries That Fascinate You & What’s Their Market Size
You MUST think about the market you’re going to get into and its market size. This is very important. It’s crucial in fact. Don’t just be selfish and consider your personal passions and skills. Also, take into account the market that you will help with your passion and skills. The market must be big enough.
Don’t Waste Your Time on Startup Ideas That Will SUCK
Overall, there’s a bit of an art and a science to coming up with business ideas. Just consider these factors to get you started and to screen your ideas so that you don’t get too overwhelmed. Screening your ideas in this fashion can also help you to save time and money!!
Should you quit your startup or keep going? This is one of the saddest posts that I’m writing, as it signals defeat of my startup and also personal failure. But this is an informed-kind of defeat, and it is an important decision to make, because you don’t want to waste your time and your life on a startup that is essentially dead or part of the “walking dead”.
It Feels Hard to Quit A Startup You Built from Nothing
Recently, I’ve sold my startup business operations in Latin America. I’ve had to let it go. I’ve also chosen to wind down to a slower pace the operations in Australia. This is so hard to write about, and my heart and soul feels so burdened just by writing about it.
Because I spent the past 3 years or so building the startup with my all: My blood, sweat and tears. And now I have chosen to let it go. If you’re a startup founder or social entrepreneur who has built something from scratch and later have let it go, you can empathise with me.
5 Reasons Why You May Want to Quit Your Startup Now
If you’re pondering about potentially letting go of your startup too, either to sell it, stop it and move on to something else, then here are 5 reasons why you may choose to quit. I’m writing this because, like me, you may be so internally torn about whether or not to do it. Hopefully this helps you
1) Too much stress/unhappiness
Entrepreneurs and founders are often portrayed as heroic, unbeatable figures. But we’re human too, with flaws and feelings.
If you feel that your startup is bringing more negative stress that makes you feel depressed and screws up your body and mind (not in a positive way that challenges you to be better), then it may be time to let it go.
This was how I was feeling with my startup operations in Latin America. Investors were taking our startup on a different direction to what I wanted, and I felt so conflicted and unhappy.
We felt it was better to start fresh and cut ties with that investor than to keep going – in order to stay true to ourselves.
2) Not profitable
If your startup has been operating for a number of years, and you STILL have not figured out how to make it profitable or sustainable to keep it going and growing at a scalable pace, then it may be time to let it go.
As much as my startup helped thousands of people, and helped raise more than half a million dollars in fundraising to help families with their medical bills, it never reached a level of profitability and scale that could take it to the next level globally.
3) Too much competition
As you’ve been working on your startup, you may also find brutal competition. You would be fighting an uphill battle against the competition, and that’s what we found in the overly crowded crowdfunding space.
4) Better idea
Your current startup may also be involved in a relatively small market or a market that has several disadvantages. As you work on it, you may actually discover other markets that are much larger and easier to penetrate.
5) No passion
Finally, another strong mark of whether you should quit is if you have lost your passion for the business. Are you dragging yourself to work?
I loved the work of our startup because we impacted so many lives. I just didn’t like the fact that our investors in Latin America were forcing us into the wrong direction for it, and were focused too much on the short term profits rather than the long term value that the service could provide. It made me feel so depressed, and I began to slowly lose my drive and passion for it.
Is Selling a Startup Success?
Some would say that selling a startup would be a success, but for me, the startup was such a personal expression of myself that I wanted to grow it and help much more people than I did.
So, while it was great to sell it, I felt there was still so much more that we could have done with it, and so much more people I wanted to impact and help. In that manner, I feel it didn’t reach its full potential – or perhaps, I feel that I myself didn’t reach my full potential yet with it.
Hi everyone its Matt from MatthewAlberto.com. Where I’m passionate about tech and social entrepreneurship. I’m here today to help you figure out the difference between your vision, your mission, your goals, and your values.
Founder Asks for Help Establishing Her Organization
So apart from leading, and founding and running my own enterprises, that try and change the world through technology, and social entrepreneurship. I also from time to time, consult and help non-profits, and also social enterprises, to get their own visions laid out. And to get their projects up and running.
So recently I had a lady from the US, who’s originally from Africa, but now is in the US. She’s actually trying to set up a non-profit base in the US, but need linkages to Africa and other developing countries. And I was looking around with setting up her missions, her goals, and her values. One of the challenges that she was having was being able to communicate all of those things, in a clear concise way.
When she came to me, she actually showed me what she had thought was her vision, her mission, her goals, and values. And I found that even in all of them, she had actually been reiterating the exact same thing. And so my purpose for this post today, is to help you figure out for yourself.
Are they the same or different? Vision, Mission, Goals & Values
What is the difference between your vision, your mission, your goals, and your values? And if you’re trying to set up your own tech startup. Or you’re trying to change the world, through a social enterprise. How can you lay out the foundation, for your budding organization? And you need to know these things, so that you can communicate to your stakeholders, from your employees, to your partners. The other co-founders and even investors. You want to communicate to them about where you stand, and what you believe in, and what your organization is all about.
And that’s what those 4 things really try to encapsulate, but they are different. And I want to point that out first and foremost, that the vision, mission, goals and values are different things. They’re related, don’t get me wrong. But when you’re setting them out in your business plans, on your website, or through communicating to others. You should distinguish between them. So I want to just take a few minutes to help you write it out, and to get to know in my perspective is the difference.
1) What is Your Vision?
So first vision. In my view, your vision is what you see in your ideal world. So that could also mean, what in your world do you envision want to see.
What can you describe your ideal world to look like?
And when you’re describing it, try not to have any negative words in it, such as “it’s a world that doesn’t have” something. Don’t focus on the problem, focus on the solution. Try to make it a more positive vision, using positive words. Essentially it’s what you see in your perfect world.
2) What is Your Mission?
The next aspect of the basis of your organization is your mission. For me your mission is, just a short statement that tells people what you do, and it should be quite short. It shouldn’t be pages and pages, about what you do. And it should be specifically about what you do, but more on a general level.
And in terms of your mission, you can talk about, what is the problem that you’re trying to solve. And you can also talk about the solution in general terms that you’re trying to put forward. So in the case of the consulting I’m doing, with the lady from the United States. She’s trying to set up a girl’s education non-profit. And so for her mission, we talked about the problem of gender inequalities, and the education gap. And her mission would be to empower, and encourage girl’s education worldwide. So we talked about something like that.
3) What are Your Goals?
The third area is your goals. So in my view, goals are essentially just dreams, but with a deadline. And goals should be a lot more specific, than your mission. And the goal should really focus on the solutions, and the specific actions that you, and your organization is going to take.
You can also talk about the result or outcomes that you want to achieve as a result of your actions. So that’s goals. It’s more specific, it’s got a deadline, and it’s more action oriented.
4) What are Your Values?
And finally there’s your values. And in my view, values when you’re writing them out are different from the others. Because they talk more about your beliefs, and ideals. So they need to talk about what you believe in, as an organization.
And if you’re the founder, then often your organization will reflect your own beliefs and ideals. And you should try and find beliefs and ideals, and values that are related, and represent your organization. So for example, if your organization whether it’s a tech company or it’s a social enterprise. If it deals with the law, and somehow providing legal services. Then one of your values in terms of your beliefs and ideals could be the value of justice. You can talk about how this belief in justice, has empowered your organization. And you’ve found it to work on a start-up or organizations, that trust, promote this value.
Or another example of a value for a non-profit that deals with education is value in education for all. So in that statement, that’s the value education for all. And it’s the belief or ideal that, you believe that educational opportunities should be available for all people, regardless of your gender or your race.
A Wrap Up of Missions, Visions, Goals & Values
So in a nutshell, those are the differences between, a vision, mission, goals, and values. And in summary.
So a vision is what you see in your ideal world.
A mission is a short statement that tells people what you do.
Goals are your dreams, with a deadline talking about specific actions, or results.
And your values are your beliefs and ideals.
So I hope that helps you figure out, the difference between them. And to communicate what your start up, or organization is about.
Hi, everybody. It’s Matthew Alberto here at matthewalberto.com. It’s been quite a while since I posted. I realize that. I’ve actually been busy, being on the ground, really working hard, working on my start-ups, working on my ventures, trying to make an impact on the world, trying to change the world and make a dent in it, to do something great. It really meant some time off my blog and really focusing on my projects. The projects have been going well, and I think it’d be great to just come back and really start blogging again and to share my learnings, my findings, my lessons, and share them with you.
Startup Chile – The Global Startup Accelerator in South America
This post today is about the five start-up lessons from my Start-Up Chile adventure. I was actually a part of Generation 9.2 of Start-Up Chile and that was one year ago. Right now, it’s actually my one-year anniversary since I was accepted, along with my co-founder, Fufu, for our start-up, PeoplePledge, the medical crowd-funding platform, that aims to change lives around the world and help families with their medical bills. Overall, my time with Start-Up Chile was a great experience. They’re great people, some really driven people from all around the world who wanted to make a difference with their start-up and do something creative and innovative and new. That was something different that I hadn’t experienced before.
In the past, I’d been working on my start-up projects mainly on my own with my co-founders, and often it felt like a lonely journey. This time, being a part of an incubator, Start-Up Chile, which actually is an international incubator, it actually made the dynamic different and it really made me juiced and excited about what I was working on because through the people there you really get pumped. There was great food as well, here in Chile, from the hamburguesas and the avocados and the lovely delicious fruits and vegetables, because they have great produce in the country, not to mention the parties that I attended with the other start-up folks. Just the overall start-up culture in Chile is really great. I am actually recording this right now here in Chile.
I was here in Chile for six to seven months last year. After that, I got married as you can probably see in my previous post, and I’m actually back here in Chile now because, thankfully, we got follow-on funding.
I want to share with you five start-up lessons learned from my Start-up Chile adventure and hopefully it will help you in your start-up journey whether you want to change the world through technology or some other start-up idea that you have.
1) How Startup Communities are Formed: From Down Under to Latin America
So first lesson that I learned is that start-up communities can be formed and created, and I learned how they can do that. Here in Chile, they are actually trying to emulate the Silicon Valley culture and experience here in Latin America, which really interesting is that the country as a whole is trying to move towards that innovation center and that tech industry. Chile wants to be the next Silicon Valley or at least the Silicon Valley in Latin America, and it’s certainly well positioned to do so. It’s one of the wealthier countries in the region. It is part of the Americas, but in the south, and it is a Spanish-speaking country, so being here in Latin America, it is well positioned to be a leader or, as they like to be called, the “Chilecon Valley” of the region.
I was heavily involved in how Start-up Chile was trying to promote start-ups and start-up culture in the region. When we were in the program, we actually were provided with funding of around $40,000 USD, but in return, no equity was taken. We did have to go out into the Chilean community and share our knowledge about technology, about innovation and about start-ups. That was a really interesting experience.
One of the experiences was that we went to a number of major universities in Santiago, the capital of Chile. I shared my experiences about innovation. There was actually as Master’s class for innovation being taught at one of the universities here, and I talked about the concepts of running lean and the lean canvas, how you can innovate and create new products and projects into the marketplace, but you can do so in a lean and scientific way.
Overall, through that Start-up Chile experience, I learned that although Silicon Valley in the US is really prime and well-known throughout the world as being the main hub internationally for tech innovation, I do believe that there are still pockets of innovation and pockets of cities around the world that can innovate too, that can provide a platform for harnessing and enhancing and encouraging entrepreneurship, and they are certainly doing that here in Chile.
Creating a start-up community doesn’t have to be too expensive in the sense that it’s not really about the money where you get all these VCs and angel investors and then that will sort things out in creating a startup community. I think another way that startup communities can be formed is just through the sharing of knowledge and the transfer of technology. We certainly demonstrated that though the activities of going throughout the Chilean community and sharing our knowledge of innovation technology and how we built our start-ups and doing it at a more personal level.
2) Internationalizing Your Startup
Second major start-up lesson that I learned during Start-up Chile was how to internationalize a startup, the pros and cons of it. We started our start-up in Australia, PeoplePledge started there and it was going quite well. English is my native language so coming to Chile was quite nerve-wracking and I was worried. I wasn’t sure what I’d expect. But coming here, it gave me a new perspective on the world, that there certainly are other markets around the world where there is potential for your start-up to grow. Especially in places where, perhaps, there is a lag in terms of the technology that is transferred there. I did see that here in Chile and across Latin America, that there certainly are opportunities for innovative start-ups to come here and bring ideas here. That’s one of the major advantages of internationalization.
It also pushed me to my limit in terms of also the language and the culture, the differences there. I did have to learn some Spanish words and phrases. I’m actually still trying to learn Spanish, but one of the things as well that I learned is that the cultural difference can have an effect on your start-up and that you can’t just cookie-cut your start-up from one country to another country, especially if there are major differences in the language and the culture. There certainly were major differences there between Australia and English-speaking countries as compared to Chile and other Latin American or Spanish-speaking countries. That was evident just in the fact that when I came here with the name “PeoplePledge” and I started talking to a number of different locals and other Spanish speakers, many of them actually had a problem saying the word “pledge,” which blew my mind. I didn’t even think about that; it never occurred to me that that would be a concern.
Now that we’re here back in Chile trying to implement something similar in the region, we are looking into changing the brand and looking at different ways that our messaging and our positioning is put across to the local market.
3) Mentors Will Push Your Startup Further
Another start-up lesson learned from Start-up Chile, my third major lesson is the power of mentors. One of the great aspects of the Start-up Chile program is that it provides you with a ton of great mentors. I was fortunate enough to be part of one of the top 16 start-ups during our cohort. I think there were about 80 to 100 start-ups that came during my generation. Fufu and I, we were really privileged to have been chosen as one of the top 16. As part of that, we were then provided with mentorship. Every single week from the beginning of our Start-up Chile journey, we met with mentors. Actually, every single week we met with our peers, which were called platoons, where we then gave updates about our start-up journey and we also heard their problems and their issues and their updates. We shared back and forth ideas to help them and they would share ideas to help us. That happened every week where it was entrepreneurs helping entrepreneurs.
Then, it was every month, once a month, that we met with high-level mentors. The mentors that we got during our time included that chief marketing person for a major retail chain here in Chile, the CEO of a web development and major blog network in Latin America, a venture capitalist and also the co-founder of a major crowdfunding website. What we had learned during that time is that mentors can really push you to dream bigger and to think bigger and to look at your business and your opportunity in different ways.
Before that, we actually hadn’t ever considered dealing with mentors, and this was really the first time that, on a regular basis, we met with them. Every single time that we met with them face to face in a small room at our co-working space, it really opened our eyes and it really got us pumped by the end of it. We would get out of the room and Fufu and I would just be wide-eyed and excited and pumped to get cracking to implement some of the ideas that we had discussed and to move the start-up to the next level so that the next time that we would see our mentors we could then give them another update and then talk about another aspect of the business. That was really exciting, and we really want to take that to where we want to head in the future with the power of mentors.
4) Learn to Pitch Like Other Entrepreneur Greats
The fourth major start-up lesson learned was that pitching really matters. Throughout our Start-up Chile journey, we did a number of pitches. When we first got there during the first few weeks, we did an introductory pitch where each of the start-ups had to stand in front of the others and give about a three- to five-minute introductory pitch or speech about what you do and what you are about. Then a few weeks later, we then had an initial pitch competition, where the winners would then be chosen to then have special mentorship and special attention, which we then got, which helped us get the mentorship. Towards the end of our six-month Start-up Chile journey, we then had the quarter final pitches, semifinal pitches and then finally the finals for pitches. We did all of them. It was really tiring. I admit at sometimes it felt like it was distracting us from actually working on our start-up, but it really helped us hone our skills to pitch and to present our start-up to investors.
Although it took some time to write up the pitch, to make the pitch [inaudible 00:12:06] and to practice the pitch, every time there was a pitch, before it we would always aim to make our start-up better to focus on what really mattered. Those were the metrics of traction. Every single time, our aim was to ensure that our start-up got better and better, and we did that. That’s why we got to the demos, the final demo day, which was really exciting, pitching in front of dozens of venture capitalists and angels here in Latin America.
Apart from the Start-up Chile pitches, we also pitched to Microsoft during one of their app accelerator camps, and that was also interesting here in Chile. Unfortunately, we didn’t end up getting any investment from Microsoft, but it did help with the practice and also to build the contacts and to learn more about their offerings.
At the end of the day, when we finished with the Start-up Chile demo day finals, we did eventually get follow-on funding and that’s what brings us here now in Chile. I really learned that how deliver your pitch, how you synthesize the information, how you focus on your metrics, it really matters in what you say and how you deliver your presentation.
5) Startups are Hard: Most Fail, but Breakout Success is Possible!
The fifth and final start-up lesson that I learned from my Start-up Chile adventure that I’d like to share with you is that, while it sounds exciting and it was adventurous coming to Chile and the parties were great, the people were interesting, at the end of the day, now that it’s been one year since I started Start-up Chile a year ago, I have learned that start-ups are hard. There’s this ideal of start-ups being so cool and so awesome and it’s a great way to make money and you get pumped because you have investors and you have pitches. It is all that, but apart from all of this hype of it being awesome and cool and exciting, I just want to point out the reality of it, and that’s start-ups are really hard; they’re difficult. Now that it’s one year after we started Start-up Chile, I’ve actually noticed that one of the graduates from my cohort, generation 9, a lot of them are no longer working on their startup. Their start-up either died or the founder gave up.
I was talking to Fufu the other days; it’s really exciting looking back on the people we met who were really interesting and the ideas that they had. I’ve talked to some of my friends from my generation and it’s interesting that some of them are now working, some of them working in Silicon Valley, some of them went back home to their home countries and some of them went back to go get a job, some for financial reasons or just some that their start-ups just didn’t work out. They didn’t get enough traction or they didn’t get follow-on funding.
It wasn’t too surprising, and I do remember the acceleration manager of Start-up Chile once presenting and saying that they expect that 90% or more of the start-ups during our generation were going to fail. I thought that was kind of ridiculous, but now looking back on it now, he was actually correct. So 90-95% of them are gone, dead, kaput. It’s kind of sad, but I’m just really thankful that our start-up is still going strong and I’m still working very hard at getting our start-up off the ground.
Even though many of them have failed, I have noticed that there are some other start-ups from my generation that have made it into major accelerators or got additional funding from other sources. I know some that have gone into Y Combinator now, 500 Startups, AngelPad, those major incubators or accelerators in Silicon Valley and in the US or even in Mexico that really matter. That really shows that there are some that actually did get follow-on funding and are still alive and well.
Overall, the lesson that I learned is start-ups are difficult and you cannot idealize it. You really got to put in the work, so you really need to find something that you’re really interested in and are willing to put in 100% of your time and effort.
Those are my five start-up lessons learned from Start-up Chile adventure, and I’m really excited that our team, the PeoplePledge team and I, got into UDD ventures and are now moving on to bigger and better things. We’re back in Chile and we’re hoping to internationalize our start-up, which is really exciting.
Hopefully you can check out more of my posts as I go along. I’m hoping to post a lot more regularly now to share my ideas and to reach out to other people around the world to do something interesting in technology, to get creative and get something started off the ground and to make a difference in the world. See you later. Bye now.