Edmonton Lean Startup Circle

The first question owners need to ask — and challenge themselves on — is how much money they really need. My experience is that most entrepreneurs think they need much more money than they really do. There is almost always a cheaper way to get things done.

Every month that they are on the hunt for money instead of developing and marketing their product or service, they are wasting valuable time.

Q.What were your start-up costs?A.We started this business with less than $35,000.Q.Did you get any loans or take any equity from anyone?A.No, we took no equity partners and the start-up capital for the business was contributed by the three owners.

"investors are in a sense "buying" your time, not much different than consulting"Brilliant. I've never heard the concept of investing in a startup phrased so well.

My company has a really good chance of succeeding, but I still face these doubts every day. Here are some of the things that make the game worth the candle for me, even if we end up failing: * I'm proud of the product we've built. Even if it doesn't take off, nobody can take that away from me. * I'm incredibly proud of my engineering team. We're "a bunch of kids" who've built something incredible. Even if the company ultimately doesn't survive, we will have done really well. * I love my work and I love the people I work with. There are conflicts, sometimes I have to deliver bad news, deal with stress and monotonous work, firefight problems, etc. but in aggregate the work I do and the people I do it with bring me joy. I will always remember this time fondly. * When I started, I was a good engineer and a terrible product manager. Now I'm a good engineer and a good product manager, which makes me 100x more valuable. There is a bazillion other things I've learned, but this alone makes everything worthwhile.

* Facing doubt every day made me face the darkest corners of my soul. I stopped being an obnoxious cynical windbag and started appreciating the nuances of life, people, art, poetry, strength of human spirit and true magnitude of human dignity. * We're taking a real shot at building hard, sustainable technology that has a good chance to change the world. Even if we fail, I'll never regret taking the chance. * I met hundreds of people on my path. I dismissed some of them, but in retrospect I've learned from them all. I appreciate humanity a lot more now, and I understand where the dark parts of it come from much better. * Perspective is worth 80 IQ points. If you start a company you gain a lot of perspective. I could keep going, but I hope I've made my point. I'm not trying to sugar-coat anything -- failing may very well be the worst thing you've ever experienced emotionally to date. But keep everything in perspective and don't get cynical. You might still change the world in a big way. You might still change it in a small way. It doesn't matter. Enjoy the people around you. Get into adventures. Try to do something meaningful. Do the best you can -- things may not turn out how you wanted them to, but they'll probably turn out ok.

1. Good copywriting is underrated: Compelling copy is key to conversions and also making your brand human, friendly and fuzzy. Developers can’t write copy that well, that’s what marketers are for. Lesson: Great copy is a huge differentiator. It connects your audience to your brand and it has a direct impact on retention and engagement. “Copy is so important because it communicates your vision and helps you solve your products,” said Isenberg. “If you can’t do that right you’ll have little conversion rates and your not going to have a consistent brand image.”

2. Influencers are a big deal: Scale users quickly by onboarding communities. Isenberg worked with schools, trading rooms and blogs. Influencers hold the key to these communities. Lesson: The best way to onboard influencers is the old school way by building a real relationship. Pick up a phone, email them or best yet, take them out for drinks. “I love sitting behind a computer because it’s my safe haven, but the truth is that relationships is key to getting these people involved,” he said.

5. Distribution, distribution, distribution: Strategic alliances with partners helps create value-add for their user base and helps you get traffic (and SEO juice). Lesson: Embeddable widgets that allow users to distribute content across the web are particularly powerful when it’s the strategic partner’s content. “Find your most compelling feature that can be embeddable and do deals.”

Ideas are infinite, and in the absence of competent execution, they are worth nothing. Nada. Zip. Zero. Conversely, money in pursuit of outsized returns is plentiful. Thus, if both ideas and money are abundant, what is the scarce constraint in the fundraising equation?

Skilled entrepreneurs bring ideas and money together by building a bridge of trust.

Unless an investor specifically asks you to educate them regarding your space, focus your pitch on why you and your team are uniquely qualified to exploit the opportunity and turn the idea into a lucrative, self-sustaining business.

In its simplest terms, a value proposition is a positioning statement that describes for whom you do what uniquely well. It describes your target buyer, the problem you solve, and why you’re distinctly better than the alternatives. One of the classic mistakes of building a value proposition is diving headlong into the solution definition phase before really understanding the problem you’re looking to solve. To understand whether it’s a problem worth solving, I recommend exercising four U’s: Is the problem unworkable? Does your solution fix a broken business process where there are real, measureable consequences to inaction? Is fixing the problem unavoidable? Is it driven by a mandate with implications associated with governance or regulatory control? For example, is it driven by a fundamental requirement for accounting or compliance? Is the problem urgent? Is it one of the top three priorities? In selling to enterprises, you’ll find it hard to command the attention and resources to get a deal done if you fall below this line. Is the problem underserved? Is there a conspicuous absence of valid solutions to the problem you’re looking to solve? Focus where there’s whitespace, not scorched earth.

A VC who is interested in your company will usually define specific next steps at the end of the meeting.  E.g. "Why don't I get you together with 2-3 of my other partners later this week?" or "I will follow up with you quickly by Wednesday and we can discuss the data I need and next steps".

An uninterested VC will not suggest anything tangible to happen but will talk more in generalities.  E.g. "We should definitely keep in touch on this - I love you guys and your model".  This is a no, even though it sounds sort of like a yes.  Vague, positive-sounding generalities from VCs are almost always nos.

The most ambiguous situation is the data request without any further in person meetings.  In some cases, this is a legitimate request so the VC can quote data to get their partners interested in investing in your company.

- For consumer startups with non-transactional models (ad-based or unknown business models), you need something closer to 10 million users versus 1 million users to get Series A funded.