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I was sitting with the founders of a company we’ve funded the other day talking about their competition. I love this product and I use it every day. It doesn’t yet have widespread adoption, but it as extremely actively used by the early adopters.
This company has several competitors – long time incumbents with somewhat stale, but useful products, and several new competitors, including well-funded and noisy ones. I use several of these products regularly in different situations and have encouraged the founders to use them also.
During our conversation, we started off by talking about pricing and go-to-market strategies. As part of this, we were talking through a strategy to change the current game being played in the market, both from a product and pricing perspective. We had clarity on the product side (we have several fundamental architectural differences that enable a powerfully different approach at scale) but thrashed for a while on the pricing perspective.
I realized I wasn’t very clear on the pricing strategies of the competitors so we went through them on-line. While this was sort of useful, our knowledge of their products, how they work, and what the current limitations of them are was more enlightening. Ultimately the product differentiation drove the pricing differentiation discussion, which resulted in our hypothesis about how to change the game which we are now testing.
If we hadn’t all be active users of these competitors products, we would have had a stupid conversation. While we have limited visibility into the competitors’ product roadmaps, we know how hard it will be for them to change several dimensions of their products. Sure, we should assume they can and will do this, but as we enter the market in a serious way, I think we can carve out a unique and very significant position for ourselves by leading with the product differentiation and supporting it with a pricing strategy that undermines theirs. In the absence of the product information we have from our experience using their products, we wouldn’t have been able to tie these two constructs together, and our resulting approach would be weak.
My general approach to competition is to “obsess about their products while completely ignoring the company.” If you can identify competitors, use their products continually, if only to have that knowledge when the moment comes that you have the conversation about how you are going to change the game.
If you’ve been following along at home, you know that we recently created an AngelList Syndicate called FG Angels. Our goal is to make 50 investments through AngelList before the end of 2014. We’ll contribute $50k to each investment; our FG Angels Syndicate will contribute up to $450k.
Shortly after doing our first few investments, I got a really nice email from a member of Impact Angel Group, a Colorado-based angel group that organized an investment in the FG Angels syndicate. It shows a second order effect of what we are trying to accomplish with FG Angels. I thought it was worth sharing.
I just wanted to say thank you for all of your work in breaking through the red tape to put together FG Angels. I believe all of our committed members have completed their investments as individuals and we have made our first investment through the LLC we put together.
We really appreciate the time you spent to answer our questions and work through the details. I thought it might be helpful for you to see the positive impact you are making for our small group, which I’m sure can be multiplied a hundred times over. As you all know, herding angels and getting new angels to actually pull the trigger is not an easy task. FG Angels has helped us address all of our major angel-herding challenges through the following:
- FG Angels increased the amount of capital our group has committed since our official founding in 8/13 by 103% which will certainly help us with deal flow, member acquisition etc.
- 18 of our 37 angels pledged to participate and 14 are actually participating. Our members have a variety of different backgrounds and interests, so this is the largest participation rate for one deal that we’ve seen to date.
- 15 of the 18 had never visited AngelList prior to researching FG Angels.
- 6 of the 18 who pledged and 4 of the 18 who participated are never-ever angels.
- 7 of the 18 are making their first investment as Impact Angel Group members.
- 2 angels are considering creating their own AngelList syndicate as a result of their experience.
- We created an LLC of 145k to allow some of our newer angels to participate at smaller amounts. 1% of the carry will go to the Entrepreneur’s Foundation of Colorado. 1% of the carry will go back to us to help us support angel investing in Colorado.
- I learned an incredible amount about SEC regulations, crowdfunding and the logistics of AngelList.
A few weeks ago we had a summit for the women execs in our portfolio. About 40 women attended. Overall we identified about 70 women in our portfolio in leadership positions, which I estimate is about 15% of the exec positions in our portfolio.
The event was organized by three of the women – Joanne Lord (until recently CMO at BigDoor, now at Porch), Nicole Glaros (Techstars Boulder Managing Director), and Terry Morreale (NCWIT Associate Director). Like many of our internal summits, the agenda was organically developed and the event was a lightly structured, high engagement day. It was an all female event until 4pm, when I joined for a 75 minute fireside chat followed by a nice dinner at Pizzeria Locale.
This morning I’m heading over the NCWIT annual employee retreat and participating in the first session, which is a retrospective on the past year and current state of NCWIT. I’ve been chair of NCWIT for nine years and am amazed and what Lucy Sanders and the organization has achieved. Personally, I’ve learned an incredible amount about the issues surrounding women in technology and have a handle on what I think are root causes of the challenges as well as long term solutions.
Last night I gave a talk at Galvanize on failure for Startup Summer, one of the Startup Colorado programs. About 10% of the people in the room were women. After almost 90 minutes of talk and Q&A, the last question was an awesome one about the women in the room and what we could do to encourage more engagement by and with women in the startup scene.
About a year ago, we realized that none of our active companies had a female CEO. Today, three of the 58 do: Moz (Sarah Bird), littleBits (Ayah Bdeir), and Nix Hydra (Lina Chen). If you are looking for a percentage on that, it’s 5%.
5%, 10%, and 15% are low numbers. But at least we are looking at them, measuring them, talking about gender dynamics in tech, and taking action around it.
If you are in NY on 7/24 and want to have your mind blown by one of my favorite companies ever, go to the Oblong NYC Open House to see their new demo center.
In addition to an amazing demo and good food, Christopher Walsh (Director of Product Effectiveness for McGraw Hill Financial S&P Capital IQ) is going to be talking about how his organization uses Oblong’s Mezzanine to change the way they work.
It’s Thursday, July 24th from 5:30-8:30pm EST. Register here.
In today’s installation of the Techstars Mentor Manifesto, we deconstruct #3: Be Authentic – Practice What You Preach.
Authenticity has once again become a trendy word. When I started blogging in 2004, it was all about transparency. Fred Wilson led the way and I happily followed. And if you want to really understand transparency, look at Rand Fishkin’s epic post on Moz’s $18 Million Venture Financing in 2012. Now that’s transparency.
Today, it’s all about authenticity. I’ve always been amused when someone says “I’m authentic” or “I’m transparent” or “I’m entrepreneur friendly” or “I’m a value-added investor.” Whenever I hear that, I automatically insert the word “not” in between “I’m” and the rest of the phrase.
It’s not about stating that you are authentic. It’s about practicing what you preach, all the time, and in every way. Sure – you will make mistakes, but when you do you need to own them, apologize, correct things, and move forward.
As a mentor, this is especially important. The entrepreneurs you are mentoring look up to you. They immediately vest responsibility in you as a mentor. Authenticity in your behavior is key to maintaining this relationship, which you get by default.
It’s easy to fall into the trap of “I’m doing this as a favor to the entrepreneur so they have to put up with me.” Wrong. You are setting an example for the entrepreneur. They are watching your every move. In some ways, the pressure is even higher on you as a mentor since your behavior is going to rub off on your mentees.
This comes up in all contexts. It can be as simple as being on time. If you emphasize to the entrepreneur the importance of shipping on time, but then are consistently 15 minutes late to meetings, that’s not particularly authentic. It can be around content. If you stress the importance of a personal voice on the company blog, but then have a marketing team handle your own content for your VC firm, that’s not particularly authentic. If you have a public persona of being calm and constructive, but then throw temper tantrums to get the attention of your mentees, how do you think that’ll impact them.
Now, you’ll be late. You’ll have infrastructure the entrepreneur doesn’t. And you’ll get frustrated and lose your temper sometimes. But when you do, own it, and apologize. Let the entrepreneur know when you are inconsistent in your behavior. When they realize it’s ok to screw up, as long as you recognize it, they’ll understand the power of truly being authentic.
Focus on the phrase “practice what you preach.” That’s the core of authenticity in a mentor / mentee relationship. You are preaching regularly as a mentor. Do your words match your actions?