A Sack of Seattle

TechStars is coming to Seattle 2010

I'm happy to publish the press release. I'm super excited about this!  I think this is a great thing for the Seattle Startup community!

TechStars Expands to Seattle

TechStars announced today that it will launch a Seattle program in the fall of 2010, with Seattle-based entrepreneur and investor Andy Sack as Executive Director.  TechStars is a mentorship-driven, three-month-long "startup boot camp" for software entrepreneurs that typically receives hundreds of applications for 10 spots.  The selected companies receive up to $18,000 in seed funding, three months of intensive mentorship from successful entrepreneurs and investors, and the opportunity to pitch to angel investors and venture capitalists at the end of the program.

Sack is already well-known on the local startup scene as co-founder and Managing Partner of Seattle-based seed fund Founders' Co-op, guest lecturer in entrepreneurship at the University of Washington's Foster School of Business, and host of the weekly tech meetup Seattle Open Coffee. 

"We believe that TechStars can energize the startup community in Seattle in a unique way," said Sack, who  had previously served as a TechStars mentor in Boulder and Boston.  "Having experienced it up close in Boulder and Boston, I am excited about working closely with first-time entrepreneurs and involving the entire community in building 10 new companies literally from the ground up, many of which have the potential to change the technology landscape in important ways." 

The leading venture investors in Seattle have committed their support and also will act as mentors to TechStars in Seattle, including Bezos Expeditions, Buerk Dale Victor, DFJ, Founder's Co-op, Ignition Partners, Madrona Venture Group, Maveron, OVP, Second Avenue Partners, Trilogy Partners, WRF Capital, Voyager Capital, and Vulcan Capital.  Boulder-based venture capital firm Foundry Group, the Director of The Center for Commercialization at the University of Washington, and many prominent angel investors also have committed to supporting the program financially and as mentors.   

"It's incredible to see the support TechStars has engendered from the venture and angel community in Seattle," said Greg Gottesman, Managing Director of Madrona and a mentor for TechStars.  "So many key investors and entrepreneurs have raised their hands and said we want to make this effort successful, and we're willing to put our time and resources behind it.  If community support is an indicator of where this program is headed, we literally could not have had a better start."

Mentors for TechStars Seattle include Alex Algard (White Pages), Rich Barton (Zillow), Adam Brotman (Starbucks), Adam Doppelt (UrbanSpoon), Marcelo Calbucci (Seattle 2.0), Chris DeVore (Founder’s Co-op), Geoff Entress (Voyager), Michelle Goldberg (Ignition), Greg Gottesman, Steve Hall (Vulcan), Steve Hirsch (Natural Village), Josh Hug (Shelfari), Ben Huh (Cheezeburger Holdings), Nathan Kaiser (nPost), Glenn Kelman (Redfin), Shane Kim (Microsoft), Dan Levitan (Maveron), Melinda Lewison (Zefram/Bezos Expeditions), Andy Liu (BuddyTV), Ethan Lowry (UrbanSpoon), Bill McAleer (Voyager), Jamie Miller (Blinkx), Josh Petersen (43 Things), TA McCann (Gist), Patrick O'Donnell (UrbanSpoon), Linden Rhoads (Center for Commercialization at the University of Washington), Dave Schapell (TeachStreet), Jonathan Sposato (Picnik), Katie Thompson (Trilogy), and many more.  The full list of TechStars mentors for the Seattle program as well as the national mentor list are available on the TechStars website.  

Applications for the Seattle program will open in May. You can learn more about TechStars at http://techstars.org.

About TechStars

TechStars was founded in 2007 by Boulder-based serial entrepreneur-turned-investor David Cohen and venture capitalist Brad Feld. TechStars has operated in Boulder for three years and in Boston for one year.  Since inception, TechStars has supported 39 companies and approximately 75% have subsequently received follow-on financing from outside investors. Several companies that have emerged from TechStars have already successfully exited to notable acquirers such as AOL and Automattic (WordPress). The most recent batch of companies resulted in seven VC-led follow-on funding rounds and three additional angel-led rounds. TechStars companies attract the attention of seed-stage investors nationally.

 

 

 

 

 

 

 

The value of the first position on Google is approximately 5x

Congratulations to Cooler Planet -- the social media and energy efficient web site tat I invested in 2 years ago. Just this past week, Tom Staples and gang managed to get their web site on solar power to become #1 on Google for the search term Solar Power. Check out the traffic graph below. On the fist week of being in that position, organic traffic has increased about 5x!  Also, check out another one of Cooler Planet's sites on Solar Panels .

Trust your gut: avoid scummy online transactions

I was talking to Rahul Pathak, CEO of Lookstat, about ways to increase the number of sign ups for his analytics product. He wrote a blog entry about Microstock RPI and image formats (why it'sn not as cool as you think to be square). This blog entry has gotten lots of traffic because photographers can get some actual data about what formats to shoot in -- very useful data for photographers.  I asked Rahul if he thought about "hiding" or cascading the conclusion of his report until after the user submitted an email. He told me that he had a negative visceral reaction to the idea of scummy online transactions -- I told him that meant he shouldn't do what I was proposing. We laughed. Seriously though -- my instinct to try to figure out a way to get a relationship with people who found value in his blog entry was good. My idea on how to do that was bad -- Rahul's gut reaction was good. This lead the two of us to a few very interesting engagement ideas that Rahul is going to be rolling out over the next few weeks. Stay tuned for good, interesting analytic candy -- and be sure to sign up if you want to have a direct relationship with the CEO who has a gut to avoid scummy online transactions. You rock Rahul. Trust your guy and stay awake. 

TechStars is in Seattle Nov. 4 -- Seattle angel investors should attend

TechStars is a mentorship-driven investment program in Boulder and Boston. They fund 20 new startups every year from over 600 that apply, and have been operating for 3 years now in Boulder and one year in Boston. TechStars is like a "boot camp" for those companies highlighted by some amazing mentors. Somehow they let me on that list and went to both Boulder and Boston this summer to help these companies, and had a blast doing so. TechStars companies have achieved some notable exists such as Intense Debate (to Automattic/Wordpress), Socialthing (to AOL), and Brightkite (to Limbo).  

Every year, the TechStars companies get together for a reunion in a different city. This year, I'm excited to tell you that it's happening here in Seattle! As part of the reunion, TechStars reserves a part of one afternoon to have some of their companies that are still raising money pitch investors. About 75% of the companies that come out of TechStars have been angel or ventured backed historically, so this is a great chance to see some interesting early stage companies and to check out what TechStars is all about. In addition to the company presentations, there is a panel on angel and venture investment trends that I'm on along with Brad Feld (co-founder of TechStars and Managing Director of The Foundry Group), Greg Gottesman (Madrona), Stephen Hall (Vulcan Capital), David Cohen (co-founder of TechStars and angel investor), and Chris Sheehan (runs CommonAngels in Boston). I'm really looking forward to it and if you're a Seattle area VC or angel investor that is interested in attending, please contact me and I'll get you an invitation.

Value of vision is enormous

To simplify things, there's two parts to making a business -- or more accurately two sides to the same "business" coin. One part is vision and the other part is execution.  You need both. At times in my career, I've been struck by the value and beauty of one side over the other.  Today, I'm marveling at the value of vision. The value of knowing where you want to take a company is critical.  It's particularly critical in early stage companies where one misstep can kill a company.  At each of the Founder's co-op companies, we're going through a process of reviewing our 2009 operating plans and adjusting when necessary.  Figuring out what direction to go -- how to grow -- is not easy. In the land of limitless possibilities (theoretically speaking) and very limited cash -- choosing a good direction is not easy and choosing a great direction is really hard.  Ultimately, the CEO needs to take all the inputs of the market into their brain and spit out a direction gut choice -- and then go execute on it.  One note I might add to this is that the amount of cash actually makes the need for vision greater. The fact that each of our companies is cash constrained limits the degrees of freedom and has the company focus on what can increase short term cash flow while advancing the business.

Hot off the press: Seattle Company Cooler Planet forges partnership with American Solar Energy Society (ASES)

Last week, one of our portfolio companies, Cooler Planet, announced a significant partnership with the American Solar Energy Society. You can read about it here and here.  This is a big win for the team -- way to go!

 

 

Founder's Co-op likes 2 (and 3) person teams

We have 2 portfolio companies at this time and we've seen success with 2 person founding teams. I've also had a lot of personal success with 3 person founding teams. I recall there was a study done at MIT years ago that looked at the number of founders and success of startups as measured by revenue 1 and 2 years after founding. It turns out that the success of your start up is directly correlated to the number of founders up to 4 and then it starts to decrease. The theory behind the article makes intuitive sense -- up to 4 people working together can make more traction than just 1 sole entrepreneur.
In addition to the research above, at Founder's Co-op we're seeing these 2 person teams work very efficiently and effectively. The teams both have 1 business and 1 technical founder.  The companies are able to make substantial progress on both product and business each day because of the diversity of skill.
They're both ramping revenues in the first 6 months of operations and I'm super bullish about both companies. If you're applying to Founder's Co-op, you should know that our default preference in terms of number of founders is as follows:

1. 2 founders: 1 technical and 1 business
2. 3 founders: 2 technical and 1 business
3. 4 founders: 2 technical and 2 business
4. 1 founder: 1 technical

I tell you this because this is our preference -- this is not a rule. I'm sure we'll fund the single business guy too one day. That said, I highly doubt we'll fund a founding team of 5 or more -- just too many founders and too much founder conflict. By the way, my first company, Firefly, had 7 founders.

The benefits of Founder's Co-op

I met with an entrepreneur who asked me to spell out the benefits of Founder's Co-op and I told him that the fact he had to ask the question meant that our initial web site was lacking.  In a nutshell, the benefits to entrepreneurs in Founder's Co-op are as follows:

1. Community: When I asked the founders of the two companies (Cooler Planet and Orange Line Media) that we've already invested in what makes Founder's Co-op great (yes it was a leading question) their answer was the community. Now, I know this sounds like a sappy touchy feely answer -- but I think it actually may be true. There's a lot of emotional and business benefit that comes from being associated with and in the same space with others attempting to accomplish the same thing as you.  It's why people trying to lose weight do better as a community and why those trying to run a marathon train together (who else would tell you to cover your nipples with Vaseline and band-aids).
   The companies we work with currently choose to work in our offices (not a requirement) and also participate in the Founder's Co-op equity pool (a requirement). At Founder's Co-op, we believe the sum of the parts is greater than each of the individual parts. We also believe that Seattle lacks a center of technology start up culture and we want to work to foster that culture. Moreover, often advice and mentorship from people who have done it before (i.e. Chris and I and the other Founders Co-op mentors) is great but advice and shared experiences from other entrepreneurs in the process of trying to grow a company can really help tactically and emotionally.  I'll tell you that I've heard my share of SEO, SEM, and .net secrets being shared over lunch more here than anywhere else! Lastly, and perhaps most importantly, the community component of Founder's Co-op makes it a lot more fun for everyone involved.
2. Advice and mentorship: Given that Founder's Co-op serves first time entrepreneurs, surrounding those entrepreneurs with other successful technology entrepreneurs is enormously valuable. As partners, Chris and I meet with each company each week. In addition, we assign at least one mentor besides us to each company as an advisor. This is the starting point of mentorship and counsel. These regular meetings and relationships form the backbone of advice that fundamentally serves to guide and support the young first time entrepreneur.  The discussions range from high level strategy to the tactical. and include all areas of technology, technology platform, business model, recruiting, business development, marketing, customer acquisition, from entrepreneurs who have been there done and done that.
3. Network: Our entrepreneurs get the benefit of the social networks of Chris and I, of our mentors, and of our investors. This is an easy sentence to write but the power of the extended network in Seattle, San Francisco can make raising capital, getting a business development deal or getting an answer to a market question much easier. 
4. Capital: Oh, yea, we also invest in our companies and try to support them as they outgrow the initial seed and early funding rounds.

That's all I'm going to say about the benefits of Founder's Co-op for now. I think the best way to understand the benefits is to talk to the enterpreneurs in the co-op. I need to figure out a way to get their voices heard because they'll be much better able to tell you about what's good and bad about Founder's Co-op. Stay tuned for that. Have a good weekend.

Founder's Co-op early missteps

I think we've gotten a number of things directionally right with Founder's Co-op. And we've also made a number of mistakes. My partner, Chris Devore, outlines more eloquently than I the issue that arose between us and Y-combinator surrounding our applications tab at Founder's Co-op.  You can read his post here.  This is just one of our early missteps.  There have been many -- and I have to say -- while some of these missteps sting (like this one) -- Overall, I'm celebrating these mistakes. It's only when you take risk and put yourself out there as an entrepreneur and as a new start up that you start to make mistakes and to define yourself.   Founder's Co-op is a start up like the companies that we fund. We are making it up as we go and having fun. I also apologize to the folks at y-combinator -- we love what you're doing, how you're thinking about the world, and see ourselves as complimentary and not competitive. We look forward to having coffee with you when you come to Seattle.

Feedback on Founders Co-op

I'm on the plane heading back from San Francisco. I had a number of good meetings with bay area venture capitalists. The two meetings that stood out were with David Sze of Greylock capital and with Stuart Davidson of Labrador Ventures.
Some feedback that has me thinking is to beware of funding just small ideas that only need small amounts of capital. While I know we don't have this problem with our current portfolio (both Cooler Planet and Orange Line Media are going to be very successful companies in my opinion), it's good advice. So, if you're an entrepreneur and applying to Founders Co-op be sure to tell us both how you're going to get your first 10 thousand in revenue as well as your first 10 million in profit. Well, hop[efully, you know what I mean.

By the way, sorry if this post is short or hard to understand. Writing posts on the plane on a blackberry is a little tricky.