Stortelling

What is Good Stortelling? (Part 2)

In our last post, we talked about the “Hero’s Journey,” the basic premise of most modern storytelling.  We looked at some examples of this story in action, and some examples of it done badly.

Now we’re going to talk about your story as a Startup. 

Starting with Characters and Plot

We start every round at StartupYard with Product Positioning Statements. The structure of a positioning statement has a useful clarity. In essence it’s this:

  • Who it’s for
  • What problem they have
  • What the solution is
  • What the competition is
  • What makes this solution unique

This is the plot of the story, and it introduces key characters.

But it isn’t enough. The key to a great story about what you and your company does is conflict. What are you fighting against? What is wrong with the world?

Building an Appropriate Setting

All stories take place against a backdrop. A time and place, or a certain part of the world or of society, or business. And that setting is a part of the story. The setting changes along with the characters. The characters are affected by the setting.

Your setting is a key part of your story because it helps to define the stakes of the story. Putting a story in the wrong setting can damage its impact. For example, telling the story of your Groupon-clone startup against the backdrop of the mobile revolution might be a bit too grandiose. Likewise, for a company doing something ambitious and far reaching, a setting that is too confining limits the story’s impact.

Your Story Seems a Bit Off

Thus, bad storytelling happens when there is a mismatch between the setting and the actual scope of the story. Increasing the efficiency of a complicated accounting process by 10% is not “making the world a better place,” just as altering the way that people travel and view hotels (such as with Airbnb), is not “increasing the availability of lodging by 15%.”

The stakes you are playing for are important. Don’t go too big, and don’t go too small. More importantly, particularly for early-stage startups: bigger is not necessarily better. We can’t all change the world right away.

Identifying Conflicts

Conflicts don’t always occur between competitors. Your conflict is what makes you, as a startup, different from everyone else.

Your conflict is what makes you unique. They are your reason for existing.

If I’m, say, a home security company, then what is the central conflict of my story? It might be that another security company rips off their customers, and I don’t. That’s a conflict with a villain. It might be that people need to be more concerned about their security. That’s a conflict with the status quo. Or it might be something else entirely.

Here are some examples of central conflicts companies use to define company stories:

  • Sustainability: Being more environmentally conscious than competitors
  • Affordability: Sticking up for the little guy and providing a better service
  • Accessibility: Being available to more customers, or to customers with more specific needs
  • The Underdog: A small company fighting the evils of a large corporation
  • Patriotism: Emphasizing a patriotic or locally-focused attitude
  • Exclusivity: Offering something with limited availability, for discerning customers
  • Charity: Using your profits, business model, or market position to do good for others
  • Design Focus: Emphasizing a high attention to material or visual design
  • The EveryMan: Portraying a company as representative of the average person, or lacking in pretension (often the opposite of design focus).

Why do we call these conflicts? Because in every case, the central conflict is put into contrast with an opposing force. Your company is sustainable, but others are not. Your company is charitable, while others are greedy. Your company is focused on normal people, while the competitors are for specialists or geeks, etc.

There is always an opposing viewpoint in brand positioning: there is always someone on the other side of the fence.

Putting Your Conflict Into Words

In Part 1, we talked about how all great stories are human stories. And so the conflict at the heart of a startup’s story has to be a human conflict.

Very often, startups get bogged down in talking about how they see themselves. They’re smart. They’re design-focused. They’re “fun.”

But what is smart? What is design-focused? How do we define fun? Why do we want a company to even be fun? We want those things because of how they make us, the customers, feel about ourselves. People don’t buy products from a company because the company is cool, they buy them because the products themselves are cool, and because owning them makes us feel cool too.

Your central conflict has to drive your story: it has to be what customers think of when they think of you.

Try a creative exercise: Pick a list of negative adjectives to describe how your customers feel about the problem you are solving for them. That list might be something like this:

  • Annoyed
  • Angry
  • Tired
  • Frustrated
  • Trapped
  • Unhappy
  • Hopeless

Do that step first. Now go back and supply a list of roughly opposite adjectives:

  • Relieved
  • Joyful
  • Energized
  • Pleased
  • Free
  • Happy
  • Hopeful

These are the words with which you will describe your customer’s feelings. The feelings your products give to customers are the opposite of the bad feelings they have now.

Thus, a story about a company helping its customers might go something like this:

“So many ordinary people are tired, and frustrated by X. They feel trapped and hopeless because there’s no way to stop X from happening. That’s why we worked long and hard to create [our product], it frees you from X, so you can enjoy relief, feel energized, and be hopeful for a happy future.”

That’s an extremely blunt story (and it sounds like an advert for hemorrhoid medication), but it is a story of conflict. There is evil, human suffering, sacrifice, and triumph. It’s everything a story needs to be.

Picking A Conflict You Can Win

It doesn’t matter how big your competition is, or how big the problem is that you’re solving. A startup story is about how you are different: how you see things differently from others.

In 2000, Google’s startup story was based on the words: “Don’t be Evil.” For a company positioning itself against competitors like Microsoft and Yahoo, both of which already had a reputation for being sort of evil, this story worked well. Google wasn’t bigger. It wasn’t more powerful. But it was *not* evil.

It shouldn’t be a surprise then that 17 years later, this is no longer Google’s story. Yahoo is gone. Microsoft isn’t a member of the “Big 4” any longer. There’s no one for Google to be less evil than anymore.

Your conflict has to be something you can win at, though. Otherwise it’s just ridiculous. Better logistics than Amazon? Probably not. Better natural language processing than Google? Doubtful. You have to be able to win at something a competitor doesn’t do well. What is that thing?

Identifying Arcs

The way that a character in a story changes is called an “arc.” A character begins as one thing, and ends as another. Foolish to wise. Arrogant to humble.

The arc of a character is best seen as a change in what motivates that character- how what they want changes over time. As in the Hero’s Journey, a character with an arc not only becomes wiser, but also wants different things at the end of the story. He or she learns to see the world differently, and thus change their priorities.

When we talk about character arc, it’s convenient to view it in a binary way. Characters are either “rising” (becoming better), or “falling” (become worse). In this way, almost any character arc in a story can be described:

  • Rags to Riches (rise)
  • Riches to Rags (fall)
  • Man in a Hole (fall then rise)
  • Icarus (rise then fall)
  • Cinderella (rise then fall then rise)
  • Oedipus (fall then rise then fall)

Thus, archetypal characters have arcs that are some combination of rising and falling. But this trope is not contained in just literature. It is all around us. A person’s life story and the story of a startup are a series of these arcs. Telling a story is about showing how a person has changed. Likewise, a startup story is about how the startup, or the founder, or any other character has experienced an arc.

Bill Gates is a Rags to Riches story (not just in the sense of money). He rose from a solitary geek to the king of a software empire. Steve Jobs is a Cinderella story: he rose to the heights of fame, then was drummed out of Apple, but returned to become one of history’s most impactful CEOs.

These arcs are all around us: they play out in every life and in every startup. Which is your arc?

Putting Your Story on Paper

One of the hardest things about my job is getting founders to sit down and commit their stories to words. The anxiety it provokes is very real. Does this story mean anything? Do I sound stupid?

There is a natural tendency for people to avoid exposing themselves for possible shame and ridicule. However, telling your story is a risk: if it doesn’t feel risky, it isn’t a compelling story.

Try to keep in mind the elements we’ve covered here: Your setting, your conflict, your characters, and their arcs. If you’re doing that, you’re probably not doing it wrong.

The Positioning Statement: Finding a Window Into the Mind

The Positioning Statement For Startups: A Window Into The Mind

Originally published on our blog way back in 2014, this post has been one of our most enduringly popular. According to Google Analytics, the average reader has spent over 20 minutes studying it. It is also our most popular piece on Medium. Since that time, we’ve shared this post with scores of startups, and used the methodology detailed here over and over again. This post is updated to reflect all that we’ve learned in the past 3+ years.

What is Positioning?

“Positioning” has often been described as “the organized system for finding a window in the mind.” That’s how Al Ries and Jack Trout described it in their book: Positioning, a Battle for Your Mind, a groundbreaking work from 1981.

Al Ries is often credited with coming up with the term “positioning,” and he describes it as a way of using a customer’s own experience of the world (including with other brands and products) as a way of communicating with that customer. Rather than communicate in a vacuum, companies that use effective positioning target customers who are already familiar with competing products and brands, and use that familiarity to differentiate themselves.

In the book, Ries highlights perhaps the most famous example of brand positioning in the 20th century: that of Hertz Rent-a-Car, which in 1962premiered the tagline: “At No. 2, We Try Harder.” Hertz was at the time the market runner up in rental cars, and the company used that fact to imply that they were more accountable than their competitors, because they had to be.

 

In an early case of position-focused advertising, Avis used their status as 2nd in the market to imply that they were more attentive to their customers, because they had to be.

Positioning is Everywhere

When we stop to think about positioning as a promotional tool, we begin to see that it is everywhere.

Brands use their competitors as foils for their own messaging constantly. Remember those “I’m a PC, I’m a Mac” adverts.

 

Apple portrayed PC users as unstylish and bumbling in a popular series of TV spots.

                                                          

Brands for the the past half century have often focused less on defining what their products are, and chosen rather to define what they are not. Another striking example comes from 7-up, which in the 1970’s sought to gain market share by telling customers that their clear soda was “the un-cola,” explicitly defining themselves as essentially “Not Coke.”

Whereas in the past, consumers may have seen their range of choice as: “drink Coke or don’t drink Coke,” 7-up presented a different scenario: “drink 7-up when you don’t want Coke.”

In presenting consumers with a new choice: either drink Coke or drink 7-up, the brand found a window into consumers’ minds. It suggested that there were many people who would prefer an alternative to Coke that was not available.

By framing 7-up as an alternative to a popular drink, the brand convinced retailers and consumers alike to buy 7-up along with Coke, in order to fill the demand implied by the advert. In 7-up’s ideal scenario, customers would not stop buying Coke, but would buy 7-up in addition to Coke.

In the 1970s, 7-Up promoted the idea of a citrus-flavored soda as an “un-cola,” to break down consumer expectations that carbonated sodas are dark in color.

The product itself also emphasized its differences from traditional sodas. It was not caffeinated, it was sour, and it mixed well with the more popular alcoholic drinks of the time, including gin and vodka, which were gaining market share in the 1970s. “7 and 7″ was a popular drink choice by 1970, a mix of Seagram’s 7 Crown Gin, and 7-up.

The brand thus further differentiated itself from Coke, which had traditionally focused its brand on taste and tradition, using the tagline “It’s the Real Thing.” Whereas Coke was a conservative choice, enjoyed by families and older generations, 7-up was a young brand- enjoyed at night in bars and in cocktails, rather than on sunny afternoons at baseball stadiums or at restaurants.

Thanks to these ads, 7-up rose in the 1970s to 3rd place among sodas, only losing its market share with the rise of diet sodas in the 1980s and 90s, and the decline in popularity of mixed drinks in favor of bottled drinks and beer.

What a Product Positioning Statement Looks Like

Here we’ll focus on a sub-discipline of positioning as a whole: Product Positioning. It’s the same general philosophy, but with its own specific methodology.

When a startup team joins StartupYard, one of the first things we ask them to do is to sit down and write our a “positioning statement.” The format is deceptively simple, and it looks like this:

Product Positioning Statement:

(Our Product) is for (target customers):

Who (have the following problem):

Our product is a (describe the product or solution):

That provides (cite the breakthrough capability):

Unlike (reference competition):

Our product/solution (describe the key point of competitive differentiation):

Why A Positioning Statement Is Important

The positioning statement contains the core elements not only of a product, but also of its marketing and sales strategy. And while most of our teams have worked primarily on ways of describing their ideas, a positioning statement does more than this: it also justifies the notion of that idea becoming a business.

It’s important for a startup to have the concepts of saleability and market differentiation baked into the essence of the product. Writing a positioning statement, like writing a SWOT analysis, can reveal basic strengths and weaknesses in a product while it is still in the “idea” phase.

A Starting Point

Even more importantly, a positioning statement can serve as the basis for validation of a product. If you can’t describe what your company does in this compact format, it’s possible that you aren’t sure yet what your company actually does. You may be sure of what you are doing on a technical level, but what that means in business terms might not yet be clear.

The positioning statement is a conversation starter, particularly with early mentors and core team members, to facilitate early discussions about core strategy, and how the team sees itself in the bigger picture, what market it is really addressing, and what its real competition is in that market.

And a positioning statement, well-executed, can be transformed virtually complete into the core marketing message for a product, once it is developed. Take this copy from Nest’s webpage:

“Our mission is to keep people comfortable in their homes while helping them save energy, and with the next-generation Nest Learning Thermostat, we’re able to spread that comfort and savings to even more homes — and to help higher-efficiency systems perform the way they were meant to.”

Here are all the elements of a positioning statement. If the Nest founders filled in our form, it would look something like this:

Our Product is

For: Upper-middle class and wealthy people

Who: Own homes and spend a lot of money on energy costs and heating/cooling systems

Our product is a: Smart Thermostat and related products

That provides: Savings and increased comfort by improving efficiency of existing systems.

Unlike: manufacturer provided systems

Our product/solution: Learns and intelligently adapts to the inhabitants to increase comfort at all times, while saving money

A Positioning Statement Tells the Truth

The above “translation” of the Nest positioning statement doesn’t say exactly what their marketing copy says of course. They don’t mention wealthy clientele for one thing. But at $130 for a smoke detector, and $250 for a thermostat, that is surely the market they are targeting.

Their products are priced high enough to be clearly exclusive, but low enough not to seem extravagant or make a money-wise customer feel foolish for purchasing. And anyway, that messaging is not only found in the price, but in mention of “homeowners,” and of “higher-efficiency systems.” These subtle cues indicate to customers that the product is made for people who value performance, and are willing to pay to get it.

Features ≠ Differentiation

Notice too that none of the positioning statement deals with the exact features of the product. It’s all about the outcomes the product promises.

This is key: their competitive differentiation is not on a feature-by-feature basis, but holistic. They frame their competition as not only out of date, but barely worth mentioning at all. They indicate that their competitors (the providers of the systems), are not even in the same business as they are, and that therefore competing products are not even worth comparing in a more granular way.

These are all elements of Nest’s marketing that are informed by the market segment they have chosen to address, from the quality of the products, to the design, to the sales language and the pricing. And so the marketing message that says: “this product is for you,” when speaking to its target client, is backed up by a product that is built with that person in mind. The mission is clear: this is not a product for anyone, but for someone very specific, so that when the customer comes across the product and thinks about buying it, he or she can immediately see that it is made for them.

Who, Not What

There’s a reason the positioning statement starts with “who.” Over the years, we’ve consistently observed that the first thing most startup founders do is try to talk about the product before talking about the customer.

But here’s why that’s a mistake, and why the positioning statement doesn’t do that: understanding the target market is the first hurdle in actually validating a new product. Features are a distant second consideration to clearly enumerating who the customer is, and what their problem is.

A laundry list of features doesn’t really address the problem of “who” the product is for, but only “what” it is for. And that “what” that a feature describes doesn’t necessarily give any indication of what problem is being solved. Startups that are dealing with complex technologies can easily skip over the core user benefits of the technology, in favor of describing the technology itself.

Common is the startup that pitches “a revolutionary new method of transforming leavened wheat products into crispy squares by employing concentrated on-demand heat conduction derived from electrical coil technology,” instead of pitching: “toast whenever you need it,” or even “a less boring version of bread.”

People Buy Outcomes, Not Features

Customers ultimately buy solutions to their problems, not technical specifications. And those problems are not always the same as the ones that the feature list actually addresses.

Consider this, when thinking about buying a car, what are the first things you’re likely to check?

Probably it isn’t technical specifications. Most people will answer one of two ways: they will check either prices, or reviews.

That indicates that the customer is very aware of what their problem is. They need a car, and they need it at a certain price, or at a certain minimum level of comfort and safety, or both. Car companies rarely list their prices up front on their websites precisely because they know that this is what customers are looking for, and so they are able to ask for customer information in exchange for information on their pricing.

Cars rely heavily on marketing to differentiate themselves, but the marketing is typically not focused on what the cars actually do. And that’s because cars all pretty much do the same things. So the problem being solved for the customer is not “I need a car,” but “I need a car that fits my personality/lifestyle/class/status and/or specific needs.”

Look carefully at a car commercial, and you’ll be assaulted with subtle and unsubtle cues about price, lifestyle, class, education, and culture, but not much about fuel injection, or anti-lock brakes, or all-wheel drive. These things may get a mention, but the whole object is to present the car as being a great value, in consideration of all that it offers for the price being asked.

 

Lincoln’s famously ponderous commercials for town cars are definitely not focused on features.

The goal of a typical car commercial is to convince a customer that they are buying the status and the culture that is associated with the car; that their decision is not motivated by price, even when it usually is.

That is how powerful positioning is. By showing a very clear understanding of who their customers are, car companies can turn a price-motivated decision into a statement about who the customer is, and about their place in society as a whole.

The Position and the Pitch

The main difference between a positioning statement and a full blown pitch is that the positioning statement says in plain words, what is really true about who your product is for, and what you believe its market fit to be.

This will help you to stay away from visions of (and talk about) your product changing the world, even if it doesn’t really have the capacity or the capability to be a real world changing idea. Not all products have to be for everyone, and many of the best products aren’t.

It will also keep you honest and focused; force you to make clear the needs of the market you are targeting, and force you to live in their shoes instead of your own.

Central Europe Accelerator

11 Things We Say All the Time to Startups

11 Things We say ALL THE TIME to Startups

“You Just have to…”

Paul Graham has an amazing post on his blog, called “Before the Startup.” You should read it. I’ll wait.


Ok, for those who haven’t read it: he talks about how his role as a startup mentor is often just to repeat the same things. After a while, he realized that the problem wasn’t that startups didn’t know things- it was that they were asking the wrong kinds of questions. And they were doing it because they’d been trained in life and education to do it that way.

Instead of asking “what do you think about…” startup founders ask: “how do I…” They do this because the education system and tech culture itself tell them that there are “secret answers” or “key learnings” that apply to almost any situation. Like the college student who asks if a piece of information will be on the test, startups look for “tricks,” asking what they should be doing, instead of asking for mentors to react to what they’ve actually done.

We have much the same experience at StartupYard, and so we thought it would be useful to break down those things we say so often, and explain why it is we say them.

For this piece, 11 Things We Say All the Time to Startups, there will be two contributors: StartupYard Managing Director Cedric Maloux, and Community manager Lloyd Waldo. The original version of this post appeared on our blog in March, 2016.

“It’s Not About You”

Cedric: Startup founders tend to focus, particularly at an early stage, on what they want, and what kind of company they want to be, instead of the problems that they will solve for their users. When they first start talking to their customers, they will talk about “we,” and “us,” instead of “you,” and “our customers.”

So it’s almost always necessary to refocus your messaging early on to make sure that you’re focusing on your customer’s problems, and are bringing them something of value, not just attaining a goal that you have as a company. Less “we need your support,” and more: “you need this product.”

“You Are Not Your Customers.”

Lloyd: Banish this aphorism from your speaking vocabulary. You created a business and risked everything to run a startup on the strength of one idea. You are not like the people who will be your customers. You may know a lot about them, and you may even use your product, but you also created it yourself. That does not give you an excuse to not talk to users, and try to understand them better than you do.

“No One Will Believe Your Projections”

Cedric: When we talk about projections (user growth, revenue), founders can get too caught up in how to make projections that investors might believe in.

But that’s backwards. Investors will never believe in projections, because they are just that- projections. Instead, you need to develop a plan that makes those projections seem attainable. Investors don’t invest in your projections- they invest in your plan, and if that plan makes sense, it doesn’t matter whether the projections are believable or not.

“How Will This Help You Grow?”

Cedric meeting with StartupYard Startups in 2015

Lloyd: Startups come across a lot of ideas about things that might help them grow. It’s important to keep in mind the goal of doing anything connected with so called “growth hacking,” which is to actually grow.

Vanity statistics, like Facebook likes and Twitter followers, are not growth (not alone). But the logic often goes like this: Step 1: Likes on Facebook (or whatever), Step 2: …? Step 3: Growth. Focusing on how something will lead to growth is important- you can’t go from step 1 to step 3 without taking step 2. So what is step 2?

“What’s the Next Step?”

Cedric: Just like startups have to focus on how doing things will help them grow, they have to also make sure that every step they take has something after it. Everything has a desired result. You got a meeting with a potential partner? Great. What’s the next step? If there is no next step, then what will that meeting accomplish? What will that partnership accomplish without a clearly stated goal?

“Where’s the Call to Action?”

Lloyd: Simply put, you shouldn’t be communicating with your customers if you aren’t giving them something to do, or something they value.

Startup founders usually get a sense that they have to be activating their customers, but they also have to activate them to do clear and understandable things. There also has to be a clear way of measuring whether that activation is actually working. Enter the Call to Action: if you don’t have one, in an email, a post on social media, or a landing page, then you are wasting your users’ time and attention for nothing.

“You’ll have to test this and see”

Lloyd: Founders are prone to confusing advice with directions. As a mentor, I can give good and actionable advice, but just because I think it will work, doesn’t mean it works. The only way to see if the advice is sound is to try it, and pay attention to the results. Testing can’t tell you everything, but not testing tells you nothing.

“I can’t hear you.”

Cedric: When you meet with employees, with investors, or with anybody, remember that you’re the founder of a company. Your opinion matters, and you need to be heard, loud and clear. Some founders just don’t know how to make themselves heard, and make their presence felt. Instead of owning the room and controlling the conversation, they react passively, and let others lead. Instead, be the boss, and say what you think in a clear, audible voice. You’re the boss.

“It’s Your Company.”

Lloyd: Leading from that, remember that whatever you’re doing, make sure you believe in it. In an accelerator, you get a lot of advice, and a lot of direction. But it’s your company. If you aren’t happy with things a certain way, then the last word is ultimately yours. You should listen, and be open, but you shouldn’t do things just because people tell you to. If something doesn’t feel right, ask for help, but don’t “go with the flow.” It’s your company.

“Stop Selling, and Start Creating Visions”

Cedric: Selling isn’t about getting money from people. It’s about giving them something they can believe in, and are willing to pay for. To sell in the long run, you have to build a vision that people can relate to, and that people want to be a part of. If you focus on your vision, and on communicating that vision to people, then the money conversations -the selling- are just a detail. A small part of the overall experience, and not the focus.

“You Need to Control This Process”

Cedric: B2B sales are very different from B2C sales. In B2B sales, you need to remain in the driver seat, not waiting for the customer to decide that they’d like to work with you. You need to own the process: move each separate piece like a conductor, anticipate every question and issue, and close the deal. Going at the pace that the client picks is, in effect, accepting the client’s own objections and doubts as your own. If you don’t set the pace, then no one will, and many deals that could happen just won’t.

mentors engaged with founders

How Smart Startups Keep Mentors Engaged

A version of this post originally appeared on the StartupYard blog in January 2016. As a new group of Startups joins us in the next few weeks for StartupYard Batch 8, we thought we’d dive back into a very important topic for them: How do the smartest startups engage their mentors?

But first: why do some of even the most successful startup founders continue to seek mentorship?

Mentorship is Core to Running a Startup

Founders have to balance mentorship with the day-to-day responsibilities of their companies. But sometimes founders approach mentorship as a kind of “detour” from their normal operations- something they can get through before “getting back to work.”

This is the wrong approach. Having worked with scores of startups myself, as a mentor, investor, and at StartupYard, I can comfortably say that those who engage with mentors most, get the most productive work done. Those who engage least, are generally the most likely to waste precious time. 

How can that be? Well, simply put, the first line of defense against the dumbest, most avoidable mistakes, are mentors who have made those mistakes themselves. I’ve seen this happen: a startup decides they’re going to try a certain thing, and it’s going to take X amount of work (often a lot of work). They mention it to a mentor, who forcefully advises that they not do it. The mentor tried it themselves, and failed.

Now this startup has 2 options: proceed knowing how and why the mentor failed, or change direction to avoid the same problems. Either way, an hour-long discussion with a mentor will probably have saved time and money, simply by raising awareness. I have seen 20 minute conversations with mentors save literally months of pain and struggle for startup founders.

Recently, one of our founders reached out to a handful of mentors for information on an investor who was very close to signing on as an Angel. The reaction was swift, and saved the founder from making a very serious mistake. The investor turned out to have a bad reputation, and was a huge risk. As a result, mentors scrambled to suggest alternatives and offer help securing the funds elsewhere. That is what engaged mentors can do for startups.

Engaged Mentors Defeat Wishful Thinking

There’s a tendency, particularly among startups that haven’t had enough challenging interactions with outsiders, to paper-over issues that the founders prefer not to think about. Often there “just isn’t enough data,” to prove or disprove the founders’ theories about the market.

We like to focus on things we can control, and things we have a hard time working out appear to be outside of that sphere, so we are more likely to ignore them, or hand-wave their importance away.

Founders sometimes long to go back into “builder mode,” and focus solely on executing all the advice they’ve been given. And they do usually still have a lot of building to do. But one common mistake -something we see every single year- is that startups will treat mentors as the source of individual ideas or advice, but not as a wellspring of continuing support and continual challenges.

The truth is that a great mentor will continually put a brake on your worst habits as a company. They will be a steadfast advocate of a certain point of view- hopefully one that differs from your own, and makes you better at answering tough questions. But you have to bring them in.

Treat Your Mentors like Precious Resources

I can’t say how many times great mentors, who have had big impacts on the teams they have worked with, have come to me asking for updates about those teams. These mentors would probably be flattered to hear what an effect they’ve had on their favorite startups, but the startups often won’t tell them. And the mentors, not knowing whether they’ve been listened to, don’t press the issue either.

Mentors need care and feeding. They need love. Like in any relationship, this requires effort on both sides.

But time and again, mentors who are ready to offer support, further contacts, and more, are simply left with the impression that the startup isn’t doing anything, much less anything they recommended or hoped the startup would try.

Mentors who aren’t engaged with a startup’s activities won’t mention them to colleagues and friends. They won’t brag about progress they don’t know about, and they won’t think of the startup the next time they meet someone who would be an interesting contact for the founders.

This isn’t terribly complicated stuff. Many founders fear at first that “spamming” or “networking,” is the act of the desperate and the unloved. If their ideas are brilliant and their products genius, then surely success will simply find them. Or so the thinking goes.

Alas, that’s a powerful Silicon Valley myth. And believe me: it doesn’t apply to you. Engaging mentors is just like engaging customers: even if you’re Steve Jobs or Elon Musk, you still need to be challenged and questioned. You still need support.

As always, there are a few simple best practices to follow.

1. A Mentor Newsletter

Two of StartupYard’s best Alumni, Gjirafa and TeskaLabs, provide regular “Mentor Update” newsletters. These letters can follow a few different formats, but the important things are these: be consistent in format, and update regularly. Ales Teska, TeskaLab’s founder, sends a monthly update to all mentors and advisors.

In the email, he has 4 major sections. Here they are with explanations of the purpose of each:

Introduction

Here you give a personal account of how things are going. You can mention personal news, or news about the team, offices, team activities, and other minutiae. This is a good place to tell small stories that may be interesting to your mentors, and will help them to feel they know you better. Did a member of the team become a parent? Tell it here. Did you travel to Dubai on business? Give a quick account of the trip.

Ask

This is one section which I love about Ales’s emails. I always scroll down to the “ask” section, and read it right away. Here, Ales comes up with a new request for his mentors every single time. It can be something simple like: “we really need a good coffee provider for the office,” to something bigger, like “we are looking for an all-star security-focused salesman with 10 years experience.”

Whatever it is, he engages his mentors to answer the questions they know, by replying directly to the email. This way, he can gauge who is reading the emails, and he can very quickly get great answers to important questions or requests.

Audience engagement happens on many levels. Not everything engages every mentor all the time, and that’s important to keep in mind. A simple question can start an important conversation. You don’t know what a mentor has to offer you until you find the right way to ask for their help.

Wins

Here, Ales usually shares any good news he has about the company. This section is invaluable, because it reminds mentors that the company is moving forward, and making gains. A win can be anything positive. You can say that a win was hiring a great new developer, or finally getting the perfect offices. Or it can be an investment or a new client contact. These show mentors that you are working hard, and that you are making progress and experiencing some form of traction.

You’d be surprised how many mentors simply assume that a startup that isn’t talking about any successes, must have already failed. StartupLand in can be like Hollywood that way: if you haven’t seen someone’s name on the billboards lately, it means they’ve washed out.

The fact might be that you’re quietly doing great business, but see what happens when someone asks about you to a mentor who hasn’t heard anything in 6 months. “Those guys? I don’t know… I guess they aren’t doing much, I haven’t heard from them in a while.” There’s no good reason for that conversation to happen that way.

KPIs

Here Ales shares a consistent set of Key Performance Indicators. In his case, it is about the company’s sales pipeline, but for other companies, it might be slightly different items, such as “time on site,” or “number of daily logins,” or “mentions in media.” Whatever KPIs are most important to your growth as a company, these should be shared proactively with your mentors.

If the news isn’t positive, then explain why. You can also have a little fun with this, and include silly KPIs like: “pizza consumed,” or “bugs found.” This exercise shows mentors that you are moving forward, and gives them a reliable and repeatable overview of what you’re experiencing in any given week.

I heard one mentor complaining not long ago about these types of emails. “The KPIs don’t change that much, it’s always the same thing.” But he was thinking about the startup in question. The fact that the KPIs hadn’t changed might be a bad sign to the mentor, but probably the absence of any contact would be worse. At least in this case, the mentor might care enough to reach out and ask what’s going on.

2. Care and Watering

Mentors aren’t mushrooms. They don’t do well in the dark. Once you’ve identified your most engaged mentors, you need to put in as much effort in growing your relationship as you expect to get back from them.

How can you grow a relationship with a mentor? Start by identifying what the mentor wishes to accomplish in their career, in their life, or in their work with you. Do they want to move up the career path? Do they want to do something good for the human race? Do they just want to feel needed or important?

A person’s motivations for mentorship can work to your advantage. Try and help them achieve their goals, so that they can help you achieve yours.

Does a mentor want his or her boss’s job? Feed them information that will help them get ahead of colleagues and stand out. Mention them in your PR, or on your blog to enhance their visibility.

Does the mentor want to be a humanitarian? Show them the positive effects they’ve had by sending them a letter, or inviting them to a dinner.

Does the founder yearn to be needed? Include his/her name in your newsletter and highlight their importance to your startup. These things are all easy to do, and can be the difference between a mentor choosing to help you, and finding other things to do with their busy schedules.

4 Ways to Never Fail a StartupYard Interview

The 17th century French poet Boileau famously said: Ce que l’on conçoit bien s’énonce clairement, Et les mots pour le dire arrivent aisément. Or: “An idea well conceived presents itself clearly, and words to express it come readily.”

Or to put it bluntly: An idea isn’t any good unless it can be explained to someone else. If there were one piece of advice I could drill into the head of every brilliant startup founder I’ve met in my career, it would probably be just that.

But since we have some time, I’m going to go deeper. Here is:

How to Never Fail at A StartupYard Interview 

StartupYard will begin interviews for Batch 8 next week, and in the meantime, we thought we would share with them (and you), 4 key strategies that any startup can use in an interview with us, or any investor, that will help them never to fail.

Now, this advice is not going to win you an investment 100% of the time.

Investments are complicated, and they involve the needs and priorities of multiple parties. A perfect meeting might not produce an investment for a million valid reasons. But I can guarantee that if you follow this advice well, you will not fail to give your best possible impression to an investor.

Follow this advice, and you will not fail for stupid reasons.

1. Answer Questions As They are Asked

Simple and yet incredibly difficult for many people. Answer a question as it is asked, not as you would like it to be asked.

Did someone ask you a question to which you can say Yes or No? Then say Yes, or No. Then explain your answer. If you’ve never interviewed someone, I can let you in on a secret: it is very obvious when someone does not want to answer your question.

It is also very annoying.

And this produces the world’s most frustrating non-answers to simple questions. The below example is not fiction:

    • Are you making any revenue?
    • Well, we only launched about 6 months ago, and we have been focusing on making partnerships with relevant partners who are going to help us scale to our target market, and define the right sales strategy while getting early feedback from customers.
    • But are you making any revenue now?
    • Currently we are in beta and we are talking with a few clients who are ready to become paying customers once the features they need are fully implemented.
    • Are. You. Making. Any. Revenue?
    • No.
    • Thank you.

We don’t ask trick questions. What would be the point? And yet this behavior is widespread among startup founders. It is a learned behavior that must be slowly and painfully unlearned.

We want to know about what we’re asking about. So don’t try to give us the “right” answer. Just give us the real answer. What do you think is worse, us hearing that you aren’t making any revenue, or us leaving the meeting thinking you’re not even capable of answering simple questions?

And the real answer can contain the same information. Just in a slightly different format:

  • Are you making any revenue?
  • No. But we have a few customers who want to pay us as soon as we have the right features implemented. We only launched 6 months ago, and we’ve been focusing on partnerships.
  • Ok, who are these customers, and what features do they want?

Now we’re getting somewhere. And it was so easy! Now we can move to more important questions. This is a real conversation.

If the purpose of an interview is to exchange information and to assess a relationship, we would much rather spend our time doing that, than trying to decode cryptic phrases and hints.

So answer the question.

2. Win the Argument: Lose the Interview

It might be in school where people learn that an impressive, intelligent answer to a question is necessarily the longest and the most complicated one. It might also be in school where we learn that the one who speaks last has won the argument. We probably learn that from watching our teachers. But are these really good lessons?

Among the worst qualities we observe in some founders is the need to triumph, rather than to persuade. But winning an argument is different from convincing someone you may be right, or that you at least know what you’re talking about. Winning is not the goal here.

Trust your interviewers to see you as a human being, and they will like you for it. Treat them as human beings, and they will love you. But make the interview into some sort of contest for control of the subject matter and the upper ground, and they will end up wanting to get rid of you.

So communicate. Don’t argue.

What’s the best answer to a question you don’t know how to answer? Try: “I don’t know.”

You might be surprised how much investors will respect a founder who is not afraid to admit they don’t know everything. In a room full of smart people, there are always going to be things you don’t know that others do.

When answering a question, watch the interviewers, and if they seem ready to speak or unsure what you’re saying, ask them: “is this answering your question?”

So much of what we do at StartupYard involves unlearning and deconstructing the behaviors and impulses that stop founders from being great communicators and effective leaders. Most of that boils down to their motivations in any given situation. What do you want to accomplish here? Do you want to win, or do you want to be understood?

So start with this simple goal in mind: you want the investors to know you. You want to get to know them. If in the course of an interview, you can achieve this basic understanding, on a human level, then you will have succeeded.

3. Look Like You Belong Here: Because You Do

My father wore a suit and tie to work for 30 years. When I got a bit older and started working, I told him I’d never wear a suit and tie to work.

What he said sort of took me by surprise. He said: “we dress according to social customs, not just to show respect for others, but also to show self-respect. We dress to show that we feel we belong.”

I still don’t wear a suit to work, because I work with startups, and nobody does. But still, I notice when a person is poorly or inappropriately dressed for any given situation.

And that can swing both ways: a guy in an immaculate 3-piece suit who wants to talk about his startup is as out of place as the guy in the bathrobe with sleep in his eyes. Neither belong in that situation. Failure to dress like you belong can show that you don’t respect the social customs of your surroundings, but also that you don’t see yourself as belonging to them.

So think just a bit about how you look. Do you look like a startup founder? If you’re not sure, you may need to think more about this. Not too much. But a little.

4. Plan Ahead: Most Questions are Obvious

Here are three things any startup investor should ask you about:

  1. What is the problem you’re solving?
  2. What is the solution?
  3. Who are your customers?

If you can’t answer these three questions clearly, and succinctly, then perhaps you don’t know the answers well enough yet.

And when you sit down to answer these questions, try and imagine an investor hearing this for the first time. What is that person likely to ask you?

  • The problem we are solving is that X can’t Y when Z
  • Why does X want to Y when Z?
  • They just do…

Oops. Do you know why your problem is actually a problem? It might surprise you how frequently founders aren’t all that sure that the problem they’re solving is even a real problem at all.

Because “answering the question,” as in literally stating the problem, is not really answering the question. The object of the question is to get a useful answer: Why is it a problem? When is it a problem? How is it a problem? What is the result of the problem?

So be ready for a follow up. It will come.

Remember, a good investor, especially at an early stage, should be evaluating your ability to think clearly, as much as the idea you are describing to them. They can hate the idea, but be impressed with the clarity of your thinking. That happens to me all the time.

We have invested in companies whose ideas we didn’t fully agree with, because they showed they could think well and be receptive. That’s more valuable than an idea you love, and a founder who can’t answer simple questions about it. In assessing which of those two founders is likely to be a success, the one who can answer questions is the one we pick every time.

Innovation Nest, StartupYard, CEE Allstars

StartupYard Podcast Ep. 3: Chris Kobylecki of Innovation Nest, Krakow

In late May, StartupYard took part, along with two of our alumni (BudgetBakers and Claimair), in a private conference for Central European Startups we called “CEE AllStars.” Put on with the help of Google’s Campus Warsaw, and led primarily by the team at the VC fund Innovation Nest (who co-authored an article with us a few months back about the Polish startup scene.

Cee AllStars

The unique event was put together by a group of accelerators and early-stage investors from Poland, Estonia, Czechia, and Germany (as well as a few other locations), in order to provide a refreshing alternative to for-profit startup conferences in which startups normally compete with a great deal of noise to talk to investors. This event had a 1:1 investor to startup ratio, and every single startup had to be personally recommended to attend by one of the organizing investors.

I sat down with Chris Kobylecki, of Innovation Nest, to talk about the event, and about his take on the Polish tech ecosystem and more. Here is our interview:

(Apologies for the audio quality here: the interview had to take place in a busy venue, but I did my best to make sure our voices were audible).

 

Update: StartupYard in Bucharest: June 6th, Partnering with Bucharest.ai

Update: June 1st, 2017:

We’re pleased to announce that StartupYard will partner with Bucharest.ai to reach out to AI specialists and enthusiasts in Romania ahead of and during our visit on the 6th. Bucharest.ai, a part of the CITY.AI project, will speak about the current state of AI in Romania, and give insights and inspiration to potential founders of AI companies in the region. 

A Talk from Alexandra Petrus: 

We are witnessing a nascent playfield where innovators are building amazing products that address unthinkable human problems.  During this talk, we’ll see the Current State of AI: AI beyond the hype, bold predictions and why build an AI product. This talk will take place immediately following a presentation by StartupYard (more info below)
About City.ai
CITY.AI is a community of 23+ cities that share discoveries in applied AI and connect you to international peers. City.AI powers Chapters throughout the globe. The local communities bring unique contributions, perspectives and are bound by the purpose of collaborative knowledge in the field of Applied AI. By increasing transparency and collaboration, we aim to enable more people to better apply artificial intelligence.
About Alexandra: 
Alexandra Petrus is an experienced operations and product leadership professional, with 6+ years of international startup experience who focuses on new technology products and services. Currently contributing to the fintech & ecomm world through products @2checkout; she ran Products @Reincubate – the app data company, helps build the Bucharest City.AI Chapter as an Ambassador and is igniting her hobby and passion that are the emerging technologies & how to contribute to a better life and environment experience through the side projects that she runs (#healthtech).

 

Are Romanian deep tech startups, those working on AI, Machine Learning, advanced Cryptography, Blockchain, and IOT applications, competitive yet on the global stage? That is what the StartupYard team will explore during a day of workshops and networking at TechHub Bucharest, on Tuesday, June 6th, 2017.

Are you a Romanian entrepreneur with a love of technology and a potentially killer idea for a global business using AI/ML/Blockchain/IoT or something else? StartupYard is your stepping stone to the wider world. Find out more, and sign up for one of the workshops or presentations below:

WHERE: TechHub, Bucharest 

Agenda:

14:00-15:30: Making it Real: Storytelling and Positioning for Deep Tech Workshop with Lloyd Waldo
16:00-18:00: Office hours with StartupYard
18:00-19:00: From Genius Idea to a Global Business: Creating AI Startups from ScratchPresentation with Cedric Maloux

About the Events:

Office Hours with StartupYard:

Looking for feedback, advice, or connections in a specific domain, or on your ideas generally? We’re here to lend you a hand. You can sign up to meet the StartupYard team for a private 20-minute session on June 6th. No obligations whatsoever.

 

Making it Real: Storytelling and Positioning for Deep Tech.

In this spellbinding workshop, Lloyd Waldo, creative marketing veteran of dozens of startups, will show entrepreneurs how early stage companies can apply practical storytelling skills to convince their earliest stakeholders (including cofounders, investors, customers, and employees), of the power of a new idea. Learn to instinctively transform ideas from dry descriptions and speculation into compelling narratives, that put you in control of the conversation. Learn how simple positioning and framing devices can help you to achieve greater clarity in your ideas, and persuade others to believe in what you do.
Hosted by StartupYard Community Manager Lloyd Waldo , 14:00-15:30, Tuesday June 6th at TechHub Bucharest.

 

 

cedric maloux startupyard

StartupYard Managing Director Cedric Maloux

Presentation: From Genius Idea to a Global Business: Creating AI Startups from Scratch

Cedric Maloux has been an internet entrepreneur almost since there has been an internet after graduating in 1992 as an Engineer in Artificial Intelligence. He started his first major online venture in 1996, and sold it in 2000. He’s been starting new ones ever since reaching millions of users around the world. StartupYard, which Maloux runs as Managing Director, helps technically sophisticated developers and makers turn their ideas into real, growing businesses. In recent years, we have helped launch a series of high tech startups including TeskaLabs, Neuron Soundware, Cryptelo, Chatler.ai and Rossum.ai. Find out how these startups went from a brilliant idea, to companies serving clients all over the world with cutting edge technologies. –Hosted by StartupYard MD Cedric Maloux. 18:00-19:00, Tuesday June 6th at TechHub Bucharest.

 

StartupYard Podcast Episode 2: Thomas Patzko of ImpactHub Zurich

This week I visited Warsaw, for Google Campus’s exlusive “CEE Allstars” event, matching investors and startups at a 1:1 ratio for 2 days of pitches and discussions. During the event, I sat down for an episode of the StartupYard podcast with Thomas Patzko, to talk about Impact Hub Zurich, growing startups in one of the world’s richest and most conservative countries, and fundraising for Central European startups.

 


Key Takeaways: 

  • Switzerland, with its high cost of living and conservative society, stigmatizes startups and entrepreneurialism
  • Risk aversion in Switzerland goes back in history to its political neutrality
  • The social safety net is built around employment, not self-employment
  • In Switzerland, salary levels are guaranteed according to a person’s level of education, offering graduates attractive salaries
  • Small traditional businesses are respected, and are in fact the backbone of Swiss society 
  • ImpactHub mentors its members on investor relationships – Thomas focuses on helping startups understand investor motivations
  • Swiss startups can suffer from “over-investment,” causing them to defocus in order to match investor benchmarks
  • Communities like ImpactHub are growing in their importance as a defense against predatory investors or wild speculation. 
  • ImpactHub encourages its members to tackle problems that are outside of their experience

About Tomas:

For Thomas work is more than just making money. That is one of the reasons why he has worked in multiple fields, including a private home for the aged, building and leading various country presences of an insurance corporation, and for nine years as an independent business consultant and coach. His journey of finding possibilities to facilitate real change and encouraging individuals to experience happiness in their professional lives, has led Thomas to the Impact Hub where he curates the relationship with corporate partners and conducts business development. He holds an M.Sc. in economy and business administration and has completed advanced degrees in coaching and sociology.

About ImpactHub:

ImpactHub is built around the belief that the world’s greatest challenges will never be solved by one person or organization alone. We need to work together.

ImpactHub has set out to build a thriving innovation ecosystem where people collaborate across organizations, cultures and generations to solve the grand challenges of our time. ImpactHub Zurich, among the largest of ImpactHub’s locations, has nearly 1000 members, and reaches 10s of thousands of people in Zurich and across Europe. It was founded in 2010, and has 3 locations in Zurich.

SY Podcast: Mergim Cahani, Founder and CEO of the Fastest Growing Tech Company in the Balkans