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Do More Faster
TECHSTARS LESSONS TO ACCELERATE YOUR STARTUP
Second Edition
David Cohen and Brad Feld
Cover design: © David Cohen
Copyright © 2019 by David Cohen and Brad Feld. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data
Names: Cohen, David G., author. | Feld, Brad, author.
Title: Do more faster : TechStars lessons to accelerate your startup / David
Cohen and Brad Feld.
Description: Second edition. | Hoboken, NJ : John Wiley & Sons, Inc., [2019]
| Includes index. |
Identifiers: LCCN 2019009754 (print) | LCCN 2019011562 (ebook) | ISBN
978-1-119-58333-2 (Adobe PDF) | ISBN 978-1-119-58325-7 (ePub) | ISBN 978-1-119-58328-8
(hardcover)
Subjects: LCSH: New business enterprises—Management. | Entrepreneurship.
Classification: LCC HD62.5 (ebook) | LCC HD62.5 .C635 2019 (print) | DDC
658.1/1—dc22
LC record available at https://lccn.loc.gov/2019009754
CONTENTS
Foreword Note
Preface Organization of the Book
About Techstars Notes
Introduction
Chapter 1 Do More Faster
Chapter 2 Do or Do Not; There Is No Try
Theme One: Idea and Vision Chapter 3 Trust Me, Your Idea Is Worthless Notes
Chapter 4 Start with Your Passion
Chapter 5 Look for the Pain
Chapter 6 Get Feedback Early
Chapter 7 Usage Is Like Oxygen for Ideas
Chapter 8 Forget the Kitchen Sink Note
Chapter 9 Find That One Thing They Love
Chapter 10 Don’t Plan. Prototype!
Chapter 11 You Never Need Another Original Idea
Chapter 12 Get It Out There
Chapter 13 Avoid Tunnel Vision
Chapter 14 Focus
Chapter 15 Iterate Again
Chapter 16 Fail Fast
Chapter 17 Pull the Plug When You Know It’s Time
Chapter 18 Love Doesn’t Scale, or Does It?
Chapter 19 Reconciling Vision and Focus
Theme Two: People Chapter 20 Be Open to Randomness
Chapter 21 Entrepreneurship Is a Group Sport
Chapter 22 Avoid Cofounder Conflict
Chapter 23 Hire People Better than You
Chapter 24 How to Find and Engage Mentors How Do You Find Potentially Great Mentors?
What Makes a Great Mentor?
Approaching Potential Mentors
Engaging Potential Mentors
A Great Example
Building the Relationship
Mentorship Evolved
The Fruits of Meaningful Engagement with Great Mentors
Note
Chapter 25 Hire Slowly, Fire Quickly
Chapter 26 If You Can Quit, You Should
Chapter 27 Build a Balanced Team
Chapter 28 Startups Seek Friends
Chapter 29 Engage Great Mentors
Chapter 30 The Mentor Manifesto
Chapter 31 Define Your Culture Notes
Chapter 32 Two Strikes and You Are Out
Chapter 33 Karma Matters
Theme Three: Working Effectively Chapter 34 Assume That You’re Wrong
Chapter 35 Make Decisions Quickly
Chapter 36 It’s Just Data
Chapter 37 Use Your Head, then Trust Your Gut
Chapter 38 Progress Equals Validated Learning
Chapter 39 The Plural of Anecdote Is Not Data
Chapter 40 Don’t Suck at Email
Chapter 41 Use What’s Free
Chapter 42 Be Tiny Until You Shouldn’t Be
Chapter 43 Don’t Celebrate the Wrong Things
Chapter 44 Be Specific
Chapter 45 Learn from Your Failures Note
Chapter 46 Quality over Quantity
Chapter 47 Have a Bias Toward Action
Theme Four: Product Chapter 48 Don’t Wait Until You Are Proud of Your Product
Chapter 49 Find Your Whitespace
Chapter 50 Focus on What Matters
Chapter 51 Obsess over Metrics
Chapter 52 Avoid Distractions
Chapter 53 Know Your Customer
Chapter 54 Beware the Big Companies
Chapter 55 Throw Things Away
Chapter 56 Pivot Note
Theme Five: Fundraising Chapter 57 There’s More than One Way to Raise Money Note
Chapter 58 Beware of Angel Investors Who Aren’t
Chapter 59 Don’t Forget about Bootstrapping
Chapter 60 You Don’t Have to Raise Money
Chapter 61 Seed Investors Care about Three Things
Chapter 62 Practice Like You Play
Chapter 63 If You Want Money, Ask for Advice
Chapter 64 Show, Don’t Tell
Chapter 65 Turn the Knife after You Stick It In
Chapter 66 Don’t Overoptimize on Valuations
Chapter 67 Get Help with Your Term Sheet Note
Chapter 68 Focus on the First One-Third
Theme Six: Legal and Structure Chapter 69 Choose the Right Company Structure
Chapter 70 Form the Company Early
Chapter 71 Default to Delaware
Chapter 72 Lawyers Don’t Have to Be Expensive
Chapter 73 Vesting Is Good for You
Chapter 74 Your Brother-in-Law Is Probably Not the Right Corporate Lawyer
Chapter 75 To 83(b) o
r Not to 83(b), There Is No Question
Theme Seven: Work–Life Harmony Chapter 76 Discover Work–Life Harmony
Chapter 77 Practice Your Passion
Chapter 78 Follow Your Heart
Chapter 79 Turn Work into Play
Chapter 80 Don’t Make Yourself Indispensable
Chapter 81 Get Out from Behind Your Computer
Chapter 82 Stay Healthy
Chapter 83 Get Away from It All
Conclusion
Appendix 1: The Evolution of Techstars What Motivated Us to Start Techstars?
Why Techstars Started in Boulder
How Techstars Came to Boston
How Techstars Came to Seattle
So You Want to Start a Techstars Accelerator in Your Community or Company?
Techstars in 2019 and Beyond
Techstars Foundation: Increasing Diversity in Entrepreneurship
Notes
Appendix 2: Original Edition’s Foreword
Appendix 3: Where are the Techstars Companies Now?
About the Authors
Acknowledgments
Index
End User License Agreement
Foreword
My first real interaction with Techstars was in the lobby of the Marriott hotel next to the LAX airport in early 2009. I had applied to the Techstars accelerator in Boulder a few weeks earlier and now I was meeting the cofounder, David Cohen, who had flown in for the day to meet several LA-area companies for in-person interviews.
I had built a few startups already, but I hadn’t found the success I was seeking. Something was missing. We had the talent. We had the idea. We had the drive. But still, we hadn’t been successful. It’s obvious now that we didn’t have some of the critical ingredients, such as mentorship and a network, to be successful. That day at LAX—meeting with David Cohen and learning about the Techstars approach to entrepreneurship—changed everything for me, for my cofounders, and for our company, SendGrid.
We participated in the third cohort of Techstars in Boulder in 2009. Techstars provides seasoned mentors to work with startups. These aren’t just any mentors, but people you can trust, who have your best interests in mind, and who want to see you succeed. Our mentors started adding value right away. They began buying our product for their own companies. They helped us think through pricing and marketing, so we would get those things right from the start. We even met our first nonfounding CEO, Jim Franklin, because he was a mentor at Techstars that summer. We found our first investors because of the accelerator program.
What we didn’t expect was the help we’d get from Techstars after we left the accelerator, during the many challenging years that followed. As participants at Techstars, we are part of a community of people, before and after us, who care about our success and provide ideas and insights. For example, we received acquisition offers and Techstars guided us and helped us avoid selling too early, which would have been a tragic mistake. They helped us focus on our culture and pushed our team to define key elements of our culture, which we refer to as our “four Hs” (honest, hungry, humble, and happy) and that still exist today. Techstars actively helped us recruit Sameer Dholokia, who helped SendGrid from its early growth years through its IPO. Techstars representatives served on our board of directors from the beginning to well past $100 million in revenue. Countless customer introductions have been made by Techstars, which have been invaluable.
As I write this, SendGrid has just completed a public offering (NYSE: “SEND”) and now has more than 150,000 customers.1 It has been an amazing journey with Techstars since that meeting with David at LAX about a decade ago. To this day, I still mentor at Techstars because I have seen firsthand the impact and power of giving first and doing more faster!
For me and many others, Techstars is for life.
Isaac Saldana
May 2019
Note
1Out of the 1,700-plus companies in 13 countries to go through the Techstars accelerator programs, SendGrid is the first company to complete an IPO.
Preface
Entrepreneurship is hard. Starting with an idea that inspires you and creating a sustainable company is one of the most difficult tasks for people to achieve. Along the way, you will experience joy like you have never felt before and despair so deep that you will question everything about yourself.
It’s not surprising that most startups fail. Even entrepreneurs who have achieved success often have stories of staggering personal challenges and failures where they lose all of their savings and the money given to them by friends and families. Personal relationships get destroyed. Friends’ couches are slept on and much ramen is eaten. The boneyard of unsuccessful entrepreneurial endeavors is wide, deep, and filled with talented, smart, and motivated people who had great ideas but couldn’t overcome the challenges of going from an idea to a sustainable business.
We have been in that boneyard of failed businesses ourselves, which is why we decided to write this book. We started out aiming the book at the startup entrepreneur who has a great idea and wants to build a company around that idea. But we also think the book will provide insights to others, such as entrepreneurs who have been able to create a company but have not been as successful as they hoped. If you are involved in corporate innovation initiatives or product R&D, many of the ideas, tactics, and insights in this book will be applicable to you. Or perhaps you are a person with responsibility for community or economic development in your city or state. You will find the book to be helpful in jump-starting entrepreneurship in your community. Do More Faster was written to help everyone wanting to understand, and put into action, the principles that accelerate going from an idea to a sustainable business.
We founded Techstars in 2006 with one idea in mind: to help entrepreneurs succeed. We believe that entrepreneurs create a better future for everyone and that they, and the companies they create, are the key to economic growth. The healthy startup communities that result from entrepreneurship improve the lives of people well beyond the direct reach of startup companies. Education and healthcare improve because of the increase in economic activity. Other businesses, such as retailers, service providers, and real estate, benefit. We have seen this positive cycle of entrepreneurship and the startup community play out firsthand over the past decade in Boulder, Colorado, where we live.
To get to a deep and lasting community-wide economic impact, startup entrepreneurs need to first be able to navigate the twists and turns, pitfalls, and obstacles that can derail a good idea. Our approach at Techstars has proven to be successful in helping startups succeed. Our mentorship-driven seed accelerators have helped more than a thousand fledgling companies attract more than $7 billion in investments and create tens of billions of dollars in enterprise value. More than 150 of the companies that have gone through a Techstars program have been acquired since we started.
Why has Techstars been able to help generate so many disruptive and innovative companies? What makes Techstars different from other venture capital firms and seed accelerators? How is Techstars able to expand so quickly and have programs running in over 30 different cities around the world?
It’s the mentorship. We create a bond between thoughtful, successful, serial entrepreneurs and startup entrepreneurs. This community, and the culture of giving first between mentors and startup entrepreneurs, is critical to helping startup entrepreneurs validate ideas, avoid critical mistakes, and position themselves for the best possible outcome. This isn’t a short-term community that lasts only while the startup founder is at the accelerator; it’s a community that persists forever, becoming a construct we describe as “Techstars for life.”
As investors and entrepreneurs, we have worked with tens of thousands of founders and thousands of companies over the past 30 years of our careers. Even though many things evolve and change, we have seen the same issues come up over and over again. We created Techstars to channel the cumulative experience of successful and unsuccessful entrepreneurs for the benefit of t
oday’s startup entrepreneurs. But we don’t do it alone; we are helped by over 10,000 of the best entrepreneurs on the planet who are mentors at Techstars accelerator programs.
Organization of the Book
Do More Faster was first written in 2010 to capture Techstars mentors’ unique insights into what it takes to make a startup successful. At that time, Techstars was focused on accelerators to help entrepreneurs succeed and we had only a handful of locations—in Boulder, Boston, and Seattle. We have since expanded to other locations throughout the world and work with global corporations, communities, and business schools to drive entrepreneurship. The chapters in this edition of Do More Faster reflect our early years as a startup in the United States and the challenges that startup entrepreneurs face. Our next book, Do Even More Faster, picks up where this book leaves off and provides insights on scaling up your business. It also reflects our global expansion to Europe, Africa, Asia, and the Middle East.
We thought carefully about the key issues around early-stage entrepreneurship and organized those issues around seven themes: Idea and Vision, People, Working Effectively, Product, Fundraising, Legal and Structure, and Work–Life Harmony. The recurring lessons have stood the test of time and we’ve freshened up and updated these sections.
Each theme contains the personal experience, insights, and firsthand accounts of the startup entrepreneurs and mentors who are involved with Techstars. The chapters are short, targeted, and focus on common sayings heard around Techstars. Some of these sayings, such as the title of this book, are mantras of ours. A few are well-worn clichés. But all of them are critical ideas that have withstood the test of time and can help you to become a successful entrepreneur. You’ll also encounter what seems to be contradictory advice between some of the chapters, but we view it as a balanced perspective showing the complexities of startup challenges. Entrepreneurship is not a one-size-fits-all endeavor.