startups Archives – Page 2 of 2

The Key to Finding a CoFounder

8 years ago By cumeadi

I seem to be getting this question a lot from companies that are just forming or looking to expand. Where can I find a Cofounder? To be honest, there’s no real science to it.

Have you ever lost your keys? It’s next to impossible to find where they are in the exact moment. That sucks.

The common fix to this challenge is you have a specific place you put your keys…whether it’s the foyer, or a hook, or a drawer. You know exactly where to go when you’re looking for your keys.

It’s the same way with finding a cofounder. By the time you’re looking for one it’s too late. One of the key functions of founders/ executives in the making is to always know good people. It’s important to have a solid network of colleagues and acquaintances. Apply the same rigor you would to attracting customers and investors to hiring/ building a founding team. Here are some things I’d recommend just shooting off the hip.

Network. You need to meet smart and intelligent people on a weekly basis that challenge common perceptions, from different fields, and walks of life. It almost needs to be second nature to be attracted to these type of people. I remember one time I went to an interview for a position and I didn’t get it, but I had the opportunity to speak with the company’s founder and his insights were career changing. The chance to speak with truly intelligent and driven people is underrated. Savor those moments because it will come in handy like when you need a co-founder. You can reach out to those same people to help begin your search.
Know your strengths, blindsides, and what skills and experience will enhance your company. You’ll often hear solo founders say, I need someone who can sell, or market, or a tech guy or gal. While that’s a good start, think about where that function should sit in your organizational chart and how it advances your goals. If the skill that’s missing is essential to your unique value proposition, I’d say the person should sit at a founder level. If not, it’s a good move to bring them on in a non-founder role.
Talk to people who are in the same position you’re looking to fill. If you’re looking for a CTO type founder, talk to CTOs in established and up and coming companies. Conversations with people who are in the trenches help you identify common traits that make a good CTO. They are themes. Sometimes, you can see these same themes in people that may not traditionally be on the path to CTO/cofounder status. Same rule can apply to other positions in a company.
Have leverage. If you don’t come from a position of strength and opportunity, it will be challenging to convince someone to leave the comfort of their squishy job or commitment to join your early stage adventure. As a founder, you have to be convincing and show the unique product, market opportunity, and upside in a way that is exciting to potential candidate.
Date. If you’ve filled your funnel of potential co-founders, start dating! I mean… try a one off project together that is super challenging. Get a chance to see how you collaborate in stressful situations. It also gives you more data to evaluate candidates.

(There’s definitely more. It’s time for my Sunday nap. I’ll add more as I think about them. I would also encourage you to add some in the comments.)

Adding a co-founder in the early stage of a company is a major milestone for any team. I believe it’s the beginning of a string of major decisions that set the foundation for what a company will grow to be. Be sure you’ve done you’re due diligence and you feel comfortable about growing and building with the person you select.

What Does a Deal Memo Look Like?

9 years ago By cumeadi

I originally wrote this as a response to a comment. Long story short, when a vc firm is making a decision on whether to invest or not, and they’ve had meetings with your team. They normally make a deal memo to specify the opportunity and explain the pros and cons of the investment. This document helps partners and others on the investment team communicate clearly about the opportunity.

Executive Summary

10k view of the opportunity. Something I would read briefly the first time around to get good context but be definitely asking more.

a. Quick business summary: Background on the company, who they are…where they operate, etc

b. Investment analysis: To invest or not to invest… that is the question…more importantly, why on either side?

c. Risks: What are key challenges the company faces? Team…competition… technology risk?

d. Financing: Round, size, amount already invested

e. Post investment: Use of funds, milestones etc

2. Market Opportunity

Goal of this section is to better understand the market and figure out where the opportunity fits in the grand scheme of things.

a. Key Problem: what is the company trying to solve for?

b. UVP: What is the solution to the problem?

c. Market: How large is the market? Where is the market in its maturity?

d. Competition: Identify current competitors and how company fits into the mix.

***I like to add information about current customers here. The positioning depends on which of the points the customer interviews support. Ref calls can also be added in product space as well

3. Product

Goal here is to paint a picture of the product and the teams ability to defend and improve said product.

a. Product Description: What is the product and who does it serve?

b. Price and scale analysis: What are the cost drivers? What are the margins? How do they reach more customers.

c. Product Roadmap: What features are coming online in the next 18 months? Why?

d. Defense: What are the key deterrents to ward off competitors. (Good opportunity to talk about IP)

e. Challenges: What are some issues with the current product? How is the company dealing with those issues? (customer interviews are good here too)

4. Marketing/Sales Strategy

Goal of this section is to get the hard nums on how they plan to reach their customers.

a. Customer Story: (borrowed from ad world) I want to create representation of who the customer (person making the purchasing decision) so we normally create in depth stories (sometimes ends up being longer than it should but meh..) Who are they? Where does company go to reach them. What are their restraints, and what does the product empower them to do?

a1. What are the similarities of customers? For example, in b2b…Do the customers have the same size company in terms of people/revenue/geographic operation?

b. Nums: Cost of acquisition, variance between channels, sales cycle…etc

c. How do you scale the Sales and Marketing Strategy? (strategic partnerships, bd)

5. Team

a. Who is on the team? (everyone…including board of advisors)

b. What are their key strengths?

c. What are their key gaps?

d. What areas will need to be added as the company expands?

6. Operational Strategy

a.Use of Funds: Where is the investment going to? Which milestones/ goals will the investment be funding?

b. Historical financials (most early stage companies may not have this but still worth identifying.

c. Monthly Burn Rate: Some like quarterly but I like to identify monthly burn pre and post investment.

d. Revenue targets & Margins

7. Deal Structure

a. Current cap table pre investment — ->Cap table post investment

b. type of security

c. Any other information from previous rounds that might be pertinent

8. Exit

Gets into details of who the potential acquires are, what an IPO may look like, and who to compare it to.

9.Le Fin

*****Things normally added to the appendix are other supporting documents, due diligence findings, and full customer interviews.

Pretty exhaustive, but I feel as if i’m forgetting something. This should get the job done for most seed stage deals.

product · startups · Technology · Why?

Design Thinking in the Nigerian Context

9 years ago By cumeadi

It’s 2 AM and the electricity goes out. Annoyed, you walk outside to turn the generator on. In the process of turning the generator on, you realize there’s no gas in the gen. In the pitch black of night, its not difficult to see the large red canister of gas a couple of steps away. You get the canister and start to attempt to fill the gen. You realize there’s too much gas in the canister and its difficult to control the amount that goes into the gen so you start to think… You go into the kitchen and get a used plastic bottle, cut it in half and now you’ve created a funnel and cup. You head back outside, put the makeshift funnel on the gen and begin to fill the cup with gas and pour it in the funnel. You fill the tank, turn the gen on, and go back to sleep.

That story is design thinking in action. I’d argue with anyone that design thinking is not a process that Nigerians are foreign to. In fact, it’s been at the ethos at most grassroots solutions. There are so many small inventions and quick fixes that I see everyday. Why don’t you see some of these solutions in the market? I believe the challenges are threefold:

How do you get people to see their solution as valuable outside themselves?
How do you provide the platform for people to producttize/ commercialize their already working prototypes?
How do you protect ideas and create incentives for people to continue to create?

How do you get people to see their solution as valuable outside themselves?

This is consequence of innovating to live vs innovating to thrive. People are brilliant problem solvers in developing markets because they have to in order to survive. Design thinking concepts tend to become a framework that most people operate in without knowing it. The challenge is being able to think beyond the problem, which is challenging for the problem solvers. I would suggest getting up to the balcony like in this story below:

Let’s say you are dancing in a big ballroom. . . . Most of your attention focuses on your dance partner, and you reserve whatever is left to make sure you don’t collide with dancers close by. . . . When someone asks you later about the dance, you exclaim, “The band played great, and the place surged with dancers.”

But, if you had gone up to the balcony and looked down on the dance floor, you might have seen a very different picture. You would have noticed all sorts of patterns. . . you might have noticed that when slow music played, only some people danced; when the tempo increased, others stepped onto the floor; and some people never seemed to dance at all. . . . the dancers all clustered at one end of the floor, as far away from the band as possible. . . . You might have reported that participation was sporadic, the band played too loud, and you only danced to fast music.

. . .The only way you can gain both a clearer view of reality and some perspective on the bigger picture is by distancing yourself from the fray. . . .

If you want to affect what is happening, you must return to the dance floor.*-Ronald Heifetz

That often the most challenging place for problem solvers to get to but is central to seeing the value in an idea or a new process.

How do you provide the platform for people to producttize/ commercialize their already working prototypes?

This a more systemic and structural problem. With a lack of manufacturing and capital in developing markets, it’s often impossible to scale a new idea. I believe the improvement of technologies like 3D printing hold a tremendous opportunity to decrease the cost and increase the accessibility of manufacturing to the masses.

How do you protect ideas and create incentives for people to continue to create?

This is an interesting challenge that all countries face now. How do you protect people who create, while encouraging the free exchange of ideas so people can build upon them? Legal spaces like IP and copyright may not be as developed in a place like Nigeria but it presents a great opportunity to re-imagine what IP/Copyright law can look like in the information sharing age.

#productideas · business · product · startups · Technology

Disrupting VC

9 years ago By cumeadi

2 years ago, when tiphub was started, our core team had a couple of initial assumptions that came to be true.

Bootstrapping is important, however majority of disruptive technologies need early capital.
Venture capital is broken. With failure rates that would not be accepted in any other industry, most vc’s continue business as usual. The best ones have found ways to de-risk their investments by leveraging marketing strategies but its not a sustainable model for all vcs in a given ecosystem.
The decision making process for investment selections was purposefully arbitrary. It allows gate keepers to claim a higher power than a regular person at picking companies that have the best chance of success.
Lack of diversity in decision making leads to unequal representation and missed opportunities.

Now, to throw a wrench in it all, bring in the African perspective. Not enough vc activity, not enough opportunities to invest in, not enough capital, etc etc.

The major issue with the private market is that its supposed or destined to be the engine of growth for developed and developing countries alike. However, we don’t have the correct scale-able processes, or institutions in place to really push the needle of investment at scale. The two major problems are;

How do you assess risk in a way that is accurate?
How do you match risk, interest, and expertise to ensure optimal outcomes?

So early on in the inception of tiphub, the idea and the hope was that we would create a platform that would exactly what is missing in the vc community. A platform that could learn, overtime, the best investments for an investor based on different inputs. We called this project tracker.

2 years later, on the anniversary of tiphub, I can say we’ve gotten to the second phase of the tracker which is a platform that will bring together experts, investors, and startups to learn from interactions, and we’ll move on to phase three, where things will start to get really interesting.

Stay tuned as we build what we hope will be a game changing platform that will improve outcomes for all entrepreneurs and investors.