Joe Stump on How Startup Evaluates Potential Seed and Series A Investors

In Chapter 11 of 17 in his 2011 Capture Your Flag interview, Internet entrepreneur and SimpleGeo CTO Joe Stump shares his approach to evaluating both Seed and Series A investors. In the early days, Stump looked for investors who had names and who understood the value proposition. He compares this to dating. Now, after two years, Stump looks for ex-entrepreneurs who invest their own money. He sets an investor cap at roughly $250,000, which at $50,000 per investor means about five angels. Stump is the co-founder and CTO at SimpleGeo (www.simplegeo.com), a San Francisco-based mobile location infrastructure services company. Previously Stump was Lead Architect at Digg. He programs in PHP, Python, Django and enjoys scaling websites. He earned a BBA in Computer Information Systems from Eastern Michigan University.

Transcript:

Erik Michielsen:  What criteria did you use to evaluate potential investors?

Joe Stump: That’s a great question and I think it’s something that I’ve been doing a lot of thinking about recently. In the beginning, to be totally frank, in the beginning of the seed round I was totally new to the game.  I didn’t know any of the terminology.  I didn’t know how any of this shit worked, and I literally said, “If you have money and I don’t totally hate you, let’s get this on!” It’s kind of like when you’re a fifteen/sixteen year old guy and you’re getting ready to finally enter man hood, you’re like, “Anything will work at this point!”  And as you get older you’re like, “Well, I have very specific needs and very specific things that I look for.”  And I think that my attitude has changed a lot recently.  

So, in the early days I looked for obviously people that were top tier investors that had wins that I could point to and say, “Clearly these guys have helped entrepreneurs win in the game.”  That was probably the first thing that I looked for.  And I also looked for people that I could get along with.  There are investors that you’ll sit down with and it’s clear, just like when you go out with dinner with a girl for the first time.  Within ten minutes you know whether or not you’re going out on a second date, right?  It’s the exact same thing with investors, you walk in and you’re like, “Here’s my idea.”  And they’re like, ”Eh.”  And you’re like, “Well, no second date!”

So, I think really finding – those are the two things that I looked for.  I looked for investors that got the idea, got the value of the proposition, were passionate about it and I looked for people that had funded companies that won and funded really good companies that I respected.  That’s changed totally since – now, uh, I don’t like the whole super angel, seed kind of thing.  I think what I look for in investors now are people that use to be entrepreneurs, and invest with their own money and normally don’t invest more than 200K. And that’s the first round – after that – Because I really think you can build almost any product on the face of the planet for 250K or less, and I think 250K is at the very high end these days.  

So, in that reality, at most you need is five angels, right?  So I think the big thing that has changed for me is in my future companies I don’t think I would pitch a seed round, I would pitch a couple of investors that were investing their own money. I think there’s a very big difference in the dynamics between people that invest their own money and people who don’t invest their own money.  And I think there is a very big difference in the insight and advice that you’re going to get in somebody who has worked in startups verses people who have started startups.  

Erik Michielsen:  And how has that – what you’ve learned from looking at investors at in the early stages applied to how you’re making decisions reflecting on your Series A and looking forward to your Series B?

Joe Stump:  Well, it’s really different, right?  Because each stage of the company and each stage of funding requires a different set of skills. So, now that we’re a twenty-something person company and we’re turning around revenue and we’re starting to negotiating big deals with big clients, we fundamentally need different insight and different money.

I don’t need that at this stage in SimpleGeo, I don’t need the guy that was the first angel investor in Instagram or the guy that founded something like that.  I need the guy that was a late stage investor in TeleAtlas.  That knows how to grow a big business and turn it into a billion dollar company.  So, I think as you progress through those stages of funding you need different investors with much different experience funding much different companies.

Erik Michielsen:  So, you’re dating different types of chicks?

Joe Stump: Indeed.

Joe Stump on How to Lead an Engineering Team

In Chapter 12 of 17 in his 2011 Capture Your Flag interview, Internet entrepreneur and SimpleGeo CTO Joe Stump notes what it means to be an engineering leader. Motivating and managing technical talent requires many things. Engineers want leaders to understand their responsibilities and interests. Stump believes engineering leaders must accept they will be unable to please everyone and then follow through making difficult decisions to keep product goals aligned with available resources and timeframes. Stump is the co-founder and CTO at SimpleGeo (www.simplegeo.com), a San Francisco-based mobile location infrastructure services company. Previously Stump was Lead Architect at Digg. He programs in PHP, Python, Django and enjoys scaling websites. He earned a BBA in Computer Information Systems from Eastern Michigan University.

Transcript:

Erik Michielsen:  What does it mean to be a leader in what you do?

Joe Stump: I think from an engineering stand point the people that - and what I try to do and what I try to emulate – engineers want to know that the people that are guiding the ship know where they’re coming from, think like they think and defend their interests.  And I think that’s probably true for most employees.  You know, they want to know that – I’m sure that people in marketing and accounting want to know that their views are being represented and defended to other people in the company.  

So, the qualities that I look for in an engineering leader are – I don’t think really nice people work well as engineering leaders or leaders in general because they haven’t really learned the “you can’t please everyone all the time” thing.  And it’s particularly true with engineering, because the problem with engineering is technically with enough computing power and enough money anything is feasible.  Technically, right?  But as a technical leader you have to be able to say, “No, we can’t do that.” And explain why. And if you’re unwilling to do that and you say yes to too many features and too many people, it wreaks havoc on the engineering organization because now they’re under extreme deadlines and you only have so much capacity.  

I think one thing that a lot of engineering leaders haven’t really wrapped their brain around is that engineers manufacture features in code. And just like a normal manufacturing facility you can only produce so many widgets in a given day with so many machines.  So, if you have a bunch of engineers, even if they are amazingly talented engineers, they can only produce so much code in a given time.  

So, if you have an engineering manager that’s out off in the rest of the company saying, “Oh yeah accounting, we can totally build that.  Oh yeah marketing, we can totally build that.  Oh yeah, we can totally build this.”  But you only have one or two engineers, next thing you know you have ten things that need to be out and that’s when things start getting off the rails and the engineers start getting really upset.

Joe Stump on How CTO Improves Public Speaking and Presentation Skills

In Chapter 13 of 17 in his 2011 Capture Your Flag interview, Internet entrepreneur and SimpleGeo Chief Technology Officer (CTO) Joe Stump shares how his public speaking and presentation skills are improving over time. As his college Interfraternity Council (IFC) president, Stump learns to overcome nervousness and butterflies. As Stump progressively becomes a thought leader, he finds value simplifying his presentation and slides. As his talks become less technical and more about future and innovation topics, including mobile location services, Stump uses more statistics to support his points. Stump is the co-founder and CTO at SimpleGeo (www.simplegeo.com), a San Francisco-based mobile location infrastructure services company. Previously Stump was Lead Architect at Digg. He programs in PHP, Python, Django and enjoys scaling websites. He earned a BBA in Computer Information Systems from Eastern Michigan University.

Transcript:

Erik Michielsen:  How has you approach to public speaking changing as you learn and grow as a though leader?

Joe Stump: I don’t get nervous anymore, obviously I’ve been speaking in front of a lot of people a lot, so that’s gotten a lot better.

Erik Michielsen: When did that stop?

Joe Stump:  Um… That actually stopped a while ago.  I did a lot of – I mean you were in B school and you know that everything is a group project and everything ends with a presentation.  And every class that I had I had group presentations or single presentations, I had to take speech in college because of business school as well and ended up on IFC as the IFC president, so I had to give like a speech in front of the whole Greek organizations on campus.  So, I think I got over a lot of that in college.  

The big thing that has changed as I’ve grown as a leader- well as I’ve attempted to grow as a leader in the tech space, is when I first started giving talks I felt that it was really important to put as much shit on a slide as humanly possible, right?  And it was literally like twelve-point font, all code, monotone, you know it looked terrible. Everybody is like “Ehhh” Everybody in the back is like, “I don’t even know what he’s talking about.”  And now if you look at my slides, they’re literally just like a funny picture background and one or two words, and that’s it.  

Everything that I talk about when I talk is off the cuff.  I don’t actually plan what I’m going to say other than I have my slides as an outline.  And the reason why I do that - a really good buddy of mine in New York, Eric Kassner, I use to when I was doing really heavy technical talks I would have him review my slides.  He’s a friendly nerd of mine.  And he was like, “Why are you putting all of this crap on slides?”  And I was like, “Well, I like to have something for them to read and I want to give them as much information as humanly possible and…”  

And he was like, “Dude.  You can bullshit about this stuff ad nauseum. You don’t need to worry about putting a bunch of crap on slides.” He’s like, “Get up there, be yourself and just talk as if you and I are having a conversation.”  That’s probably the best speaking advice that I’ve ever gotten.  And that’s – the biggest fundamental shift is I get up, I talk ad hoc, just from the cuff about what I know and what I’m passionate about and it either resonates with people or they think I’m an idiot, which is fine too.

Erik Michielsen: Now, how has that changed as you’ve talked less about tech and more about ideas and innovation?

Joe Stump:  I actually just recently learned a lesson on this one. Now that I’ve gotten away from more technical talks and getting into more of the “what does it all mean and where are we all going” kind of talks is that I use a lot more statistics and a lot more kind of metrics to get my message across.  Like one of the current things – there are a couple of things that I think are really interesting about mobile location kind of stuff.  

One is that there’s about 1.5, 1.8 billion people on Internet.  There are 5.8 billion mobile subscribers.  We have a four billion person gap that’s going to be closed – those four billion people will be on the Internet probably in the next year or two.  So, if we thought the Internet is growing quickly before, we haven’t seen anything because those mobile subscribers are just waiting for the Internet to come on to the network.  So, I use a lot of numbers to talk about that and to back that up.  

And recently a lesson that I learned from that was that I have sources for all that stuff but I don’t generally put them on slides, and I recently quoted a report from Africa that said that students in Uganda and Kenya spend fifty percent of their disposable income on mobile communications.  And this woman who was from Kenya got up and was like, “That is absolutely false!” Like she went off to me with the microphone in front of the whole thing and I’m like, “Clearly I need to cite my sources.”

Joe stump on How to Hire Top Engineering Talent

In Chapter 14 of 17 in his 2011 Capture Your Flag interview, Internet entrepreneur and SimpleGeo CTO Joe Stump shares how to be competitive recruiting and motivating high end engineering or programming talent. Stump notes Google and Facebook pay roughly market rate while Netflix pays a bit more due to location constraints. He notes the hiring and motivation process is less about getting a passionate buy-in to a company vision and more about getting buy in around solving a particular difficult problem. Stump is the co-founder and CTO at SimpleGeo (www.simplegeo.com), a San Francisco-based mobile location infrastructure services company. Previously Stump was Lead Architect at Digg. He programs in PHP, Python, Django and enjoys scaling websites. He earned a BBA in Computer Information Systems from Eastern Michigan University.

Transcript:

Erik Michielsen:  How do you hire Google quality engineering when you cannot afford to pay Google money?

Joe Stump: I don’t think you can.  And also, Google doesn’t pay that well.  Google pays almost dead on at market rate, if not a little below.  And they can do that because quite frankly they’re Google.  Facebook does the same thing.  Whereas Netflix probably overpays because they’re way out in the middle of nowhere, even though they’re an awesome company.  

So I think really in today’s world there is a real shortage or really high end engineers and there is an abundance of places that would bend over backwards to have them.  So, I think the days of startups paying a senior engineer eighty-thousand dollars when they know he’s worth a hundred and twenty and giving him an extra two-tenths of a point are gone. I think I remember at Digg I had like two-tenths of a point in the company and in order for me to make a million dollars they would have had to sold for like five hundred million dollars, right?  So, I think that the notion that you can underpay and compensate with equity are – they’re gone.  There are engineers out there that are willing to take a smaller chunk of salary for more equity.  

So my approach now is I asking them what they’re making, where they would like to be and - usually they’re right around market and usually they would like to be a little bit above market, so what I do if I had an engineer come to me and his market rate was 120K a year and he was currently making 120K a year but wanted to be making 130, I would go back to him and say, “Here are three options.  You can make 120K a year and get a quarter of a point.  You can make 130K a year and get fifteen-hundredths of a point, or I can drop you down to 100 – 110 and we can get you up to four-tenths of a point.”  And then I just let him choose.  

Erik Michielsen:  What about using purpose as a motivational tool?

Joe Stump: Most of the engineers that I work with and that I know… they care about the product, but they don’t have the same level of passion for the product that I think the founders do.  What they do have a passion for though are the technical problems caused by the product.  And the way that I motivate engineers, or at least attempt to motivate engineers, what I like to call herding cats, is much more focused on the technical problems.  

For instance, if I need to extract some polygon data, they’re going to be much more interested in the fact that they get to play with Hadoop and like other crazy technologies in order to produce that data set, than they are the actual product.  I wouldn’t say that – there are exceptions that that rule but I think more and more engineers are motivated by the tough technical problems and less so by being passionate about any given product.

Joe Stump on the Pros and Cons of a Stealth Mode Product Strategy

In Chapter 15 of 17 in his 2011 Capture Your Flag interview, Internet entrepreneur and SimpleGeo CTO Joe Stump gives his opinion on stealth mode product strategy. He compares and contrasts it to going private beta and also to releasing a minimum viable product (MVP) and improving via iteration. Stump notes why short development cycle products such as Instagram needed to be kept quiet before release. He also shares how some companies, for example Paypal, might pull a product back into private beta or stealth if a major pivot was in order. Stump is the co-founder and CTO at SimpleGeo (www.simplegeo.com), a San Francisco-based mobile location infrastructure services company. Previously Stump was Lead Architect at Digg. He programs in PHP, Python, Django and enjoys scaling websites. He earned a BBA in Computer Information Systems from Eastern Michigan University.

Transcript:

Erik Michielsen:  What are the pros and cons of going stealth mode verses releasing a product and iterating?  

Joe Stump: I hate stealth mode.  Um, I hate stealth mode for a number of reasons. There are two fundamental reasons why people go into stealth mode. One is because they have an idea that they feel is easily replicable, so they need to build a product and then launch it.  Two, they’re idiots.  I don’t really understand why.  It’s kind of douchey.  It’s kind of like, “I have this awesome new thing that I’m working on and I have a bunch of VC money, but I can’t tell ya.” It’s like the ultimate hipster cock-block move, right?  

Not only would you, “You know it’s this awesome band that you’ve never heard of, I’m not going to let you hear of them?”  It’s like, “Come on…” I think the biggest con with the stealth mode is similar to developing a fully baked product is that if you’re not getting feedback, even from people that don’t sign NDAs that are friends and colleagues and stuff, you’re going to launch a product that could potentially fail on day one, where you miss out on the fail early and fail often.  

So, I don’t see a whole lot a pros to it unless you have an idea – like Instagram, I wouldn’t have told anybody that that was the idea that I was working on because the initial version of Instagram, those guys probably banged that out in a month.  So, if you’re talking about it and someone is only like a week behind because they’re like, “Yeah, that is a good idea.  I’m going to start programming on it.”  That would probably be the only pro that I could think of, but there is no reason in my opinion to be in stealth mode for like six or eight months.  Stealth mode till you have your NVP I could understand, otherwise you need to be out in the open I think.

Erik Michielsen:  What about companies that leave stealth mode, go do a public release and they bring it back into stealth mode?

Joe Stump: I guess the only time that I’ve seen that it would make sense is you go back into stealth mode when you’re scraping the product and pivoting.  I could see that. I’ve never seen it, but I could see why someone would do that.  So, if you’re launching something and you’re like, “Ehhhhh this isn’t going to work.”  Like PayPal.  They were originally were payments on hand held devices.  The ended up pivoting into send money through email.  But I could see how that would be, “Okay, well this isn’t going to work. We’re going to pivot into this other thing. So, we’re going to go back into stealth mode and work on this other thing”.  That’s really the only time I think it would make sense.

What I have seen is I have seen people – in fact we did this a SimpleGeo where we launched a product and they pulled it back into private beta because it wasn’t ready.  So, our storage product, we launched, we had a ton of problems with it and what we did was we made the decision – we were already in the process of completely rebuilding it, but it was a massive undertaking.  We had probably eight months of R&D into our new storage technology that we had recently launched back into private beta.  

So, we actually made the decision of like, “You know what guys?  We don’t new users assuming that they can use this because it wasn’t that good.”  And so we pulled it back into private beta, we had probably four or five hundred active people using it and that allowed us – that alleviated a lot of pressure on us out in the market to basically re-approach the product and redevelop it and we’re going to be launching that back publicly in probably a couple of weeks.  So, that will be probably four months that we’ve had it back in private beta.

Joe Stump on Why a Minimum Viable Product Design Strategy Works

In Chapter 16 of 17 in his 2011 Capture Your Flag interview, Internet entrepreneur and SimpleGeo CTO Joe Stump shares why less is more when designing and building consumer Internet products. He takes a minimum viable product - or MVP - approach to release products with core features and build on them after initial feedback. He contrasts this with taking an approach that layers on non-essential features that dilute user experience and core feature functionality. He notes Apple and its initial iPhone release with roughly six apps. Stump is the co-founder and CTO at SimpleGeo (www.simplegeo.com), a San Francisco-based mobile location infrastructure services company. Previously Stump was Lead Architect at Digg. He programs in PHP, Python, Django and enjoys scaling websites. He earned a BBA in Computer Information Systems from Eastern Michigan University.

Transcript:

Erik Michielsen:  What have your experiences taught you about what makes a product great?

Joe Stump: Every interaction that I have with a product, I look for two things.  I look for the way in which you use the product needs to be blatantly evident, right? I feel that a product has failed if you have to read the instructions.  If you have to read the manual, other than assembly, obviously, you have to use the manual to use a product for its core feature, it’s failed as a product.  

And the other thing I look for in a product and product interactions are when a product does something in a way that is frustrating or requires more effort than it should, particularly when there is better technology.  A good example are doors, right? As a computer geek, it drives me insane that I still have to have a key and actually turn the key and open the door handle.  We’ve had automatic doors and RFID for a decade now.  Why can’t I just walk up to the door and it opens?  Like, I want my Star Trek doors!

So, I think those are my day-to-day interactions and what shapes product for me are one, because of those things, one… I try to pair a product down – when you first start and you have an idea for something, you’re like, “Oh man, it would be cool if I had something that did X.”  But by the time you actually launch that product, it does X, Y, Z, 1, 2, 3.  And the iteration of the product should only launch with just X. It should do X and do it very, very well, and then you layer on features from there.  

Apple is amazing at doing this.  You know, the first iPhone launched and I think it had one home screen and six apps, right? The world has changed.  But they paired it down to it’s most minimal, core feature set, people still loved it, people still used it, yeah there were issues and we’ve come a long way. When I launch and work on products, launch it with one great feature.  The founder of Instagram has a great quote that all great products started out as a feature. T

he other thing that I do with product and is something that if you go back to the key analogy, I won’t put a feature in a product unless it’s perfect.  So, a lot of people will treat features as a checkbox.  Like, “Oh, yeah I can upload user photos.”  But if uploading user photos is a draconian, terrible experience, I’m not going to add it.  I’m going to keep working on it, and keep working on the UI [user interface], and keep working on the technology till it gets to a point where it can pass “the mom” test, and then it’s a feature ready to be added to the product.

I think where people get things wrong too often is they treat the feature like a checkbox and feel like the product is better because the feature exists, even if the feature is poorly implemented.  And I think the reverse is true.  I think the product is actually worse because people are now being trained to use a crappy feature in a crappy way and if you even tried to fix the feature, they’re going to get angry that you changed the feature.  So, my approach in that situation would to just not have the feature until it’s fully baked.

Joe Stump on Why Startups Should Treat Products as Iterations and Not End Results

In Chapter 17 of 17 in his 2011 Capture Your Flag interview, Internet entrepreneur and SimpleGeo CTO Joe Stump shares his product development philosophy. He believes product releases should be treated as iterations and not end results. He shares why this is critical in context of investor financed world where companies have limited financial resources. For fully funded startups, this typically means the company has 12-24 months runway before it runs out of money. Given this constraint, Stump urges startups to release early, gather feedback, fix product, add features, and position for follow up financing. Stump is the co-founder and CTO at SimpleGeo (www.simplegeo.com), a San Francisco-based mobile location infrastructure services company. Previously Stump was Lead Architect at Digg. He programs in PHP, Python, Django and enjoys scaling websites. He earned a BBA in Computer Information Systems from Eastern Michigan University.

Transcript:

Erik Michielsen:  Why should a product be treated as an iteration and not an end result?

Joe Stump: You know we call The Constitution a living document, I believe that products are a living, breathing thing that need to continually grow.  So, the first product that you release should kind of be like a sapling.  It’s going to grow over time and it’s your job to water it and make it better over time.  I think launching products is really difficult as well and if you try to wait till the tree is fully grown, there’s a couple of problems that can happen.  

One, as a startup you generally have – if you’re fully funded, you generally have between twelve and twenty-four months in the bank, and if you spent - let’s say you had eighteen months of runway and you spent twelve months working on your big “ta da” project and you launched it and people were like, “You know what? The core feature and problem that you’re solving is a problem for me and I kind of like it, but the problem is that you’ve layered all of these other features on top of it that are crap and I can’t use them and it dilutes the whole product experience for me.”  

If you hit that at twelve months and you find out in twelve months that your product needs to be basically completely redone, you’re screwed.  Because you have six months of runway left and it takes three to four months to raise cash in the beginning. So, that gives you three months to fix your product and get it back into the market and get a positive reaction after you’ve already had a failed launch.  

Whereas if you had – there is a great quote out there that is basically “Fail early and fail often.”  If you had just started with just that core feature and you felt that you had nailed it fairly well, people would have been much more on board and helping you along the way shape where your product goes. So, I think it’s really important, for startups in particular, to release early, release features once they are minimally viable and you feel like you’ve really crafted them to a way that will resonate with people, and then don’t layer on those extra features till they’re perfect.

Erik Michielsen:  Because momentum is really important.

Joe Stump:  Yeah. Yeah it’s really important.  If you look at Instagram, they came out, literally it was it Twitphoto and Hipstamatic had a baby.  This was not a groundbreaking product in any way, shape or form.  It was, however, really well done in a very minimal way, right?  And they’ve layered on a ton of features since then and now they’re doing I think one hundred and thirty thousand signups a week.  

So, the people who are the movers and shakers in our industry latched on to Instagram early, continued to use it because it was a great feature essentially that they had been missing and are now totally hooked on it as it’s become a full fledged product with a full fledged community.  Would have things been the same if Instagram had launched a very fully baked, major product? I don’t know because the feature that people where using and liked and immediately flocked to with the original Instagram would have been buried in all of the other things that are now in Instagram.  So, would have it caught on as well?  Who knows?  It certainly wouldn’t have the community that it does now.  So, I think it’s super important.

Why Entrepreneurs Need Great Cheerleaders - Dan Street

In Chapter 3 of 20 of his 2011 Capture Your Flag interview, software entrepreneur and Loku founder and CEO Dan Street shares why entrepreneurs need great cheerleaders. He notes entrepreneurship is a perception game. To gain confidence and build that positive perception, Street finds value in both internal company support networks as well as outsider support networks. By being transparent and showing his flaws, the insider and outsider "cheerleaders" find more ways to support him. Street is the founder and CEO of Loku, previously named Borrowed Sugar, which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University.

Why Patience is Important to Startup Success - Dan Street

In Chapter 4 of 20 of his 2011 Capture Your Flag interview, software entrepreneur and Loku founder and CEO Dan Street shares why patience is important when measuring success. Street discounts myths that startups become billion dollar companies overnight. He believes patience is about sticking to your vision, developing ideas over time, and finding support to help execute that vision. Street is the founder and CEO of Austin, Texas based Loku, previously named Borrowed Sugar, which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University.

How to Recruit Talent Based on Vision - Dan Street

In Chapter 5 of 20 of his 2011 Capture Your Flag interview, software entrepreneur and Loku founder and CEO Dan Street shares how hiring is the most uncomfortable part of starting a company. Street struggles to recruit others based on his vision instead of what he can pay today. He shares how he balances an iterative process shaping his vision with conveying that vision to others in both recruiting and team leadership. Street is the founder and CEO of Loku (previously named Borrowed Sugar) which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University.

Why to Bootstrap Finance a Startup - Dan Street

In Chapter 6 of 20 of his 2011 Capture Your Flag interview, software entrepreneur and Loku founder and CEO Dan Street tells host Erik Michielsen why bootstrap financing his company helped position it for growth. Bootstrapping gives his company Borrowed Sugar direction, employees and market fit. Bootstrapping forces the company to attract employees motivated by vision, culture and problem solving rather than money. Additionally the bootstrap approach helps the company focus its product development. Street is the founder and CEO of Loku (previously named Borrowed Sugar) which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University.

How to Hire Top Software Engineers Outside Silicon Valley - Dan Street

In Chapter 7 of 20 of his 2011 Capture Your Flag interview, software entrepreneur and Loku founder and CEO Dan Street shares how he has been able to find and hire top quality software engineers outside Silicon Valley. He identifies engineering talent coming out of the University of Texas computer science honors program. By sharing a vision that resonates with young tech talent and being in a great city outside Silicon Valley, Street finds he is able to compete for talent that would typically go to big Silicon Valley firms such as Google, Facebook, or Netflix. Street is the founder and CEO of Loku (previously named Borrowed Sugar) which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University.

When to Stop Bootstrapping and Raise Convertible Debt - Dan Street

In Chapter 9 of 20 of his 2011 Capture Your Flag interview, software entrepreneur and Loku founder and CEO Dan Street shares his excitement about raising a $600K convertible debt financing round for his business after funding the business by bootstrapping. Seeing a need to grow and compensate staff, he decides to raise outside capital after building a team up to eight people. Street reflects that bootstrapping was appropriate given his situation, and that it was a fundamental enabler in developing his vision for Loku. Street is the founder and CEO of Loku (previously named Borrowed Sugar) which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University.

When is Convertible Debt Preferable to Equity Financing a Startup - Dan Street

In Chapter 10 of 20 of his 2011 Capture Your Flag interview, software entrepreneur and Loku founder and CEO Dan Street shares why he chose to raise convertible debt financing over equity. He shares the pros and cons of each. Convertible debt benefits include structure flexibility and faster time to close. Convertible debt does not provide investor assurance they will own a piece of the company. Street notes the next time he approaches fundraising he would be more open going the equity route. Street is the founder and CEO of Loku (previously named Borrowed Sugar) which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University.

How to Evaluate Potential Internet and Software Investors - Dan Street

In Chapter 11 of 20 of his 2011 Capture Your Flag interview, software entrepreneur and Loku founder and CEO Dan Street shares how he evaluated potential investors. First, Street wanted investors passionate about his company mission. Second, he prioritized investors with consumer Internet and software businesses. Third, Street notes the investors had to come via trusted network connections. He shares how different type of investors asked different questions. From beginning of raise until end of raise, the process took six months, with two weeks to close on term sheet details. Street is the founder and CEO of Loku (previously named Borrowed Sugar) which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University.

What Role Does Emotion Play in Future Internet Design - Dan Street

In Chapter 15 of 20 of his 2011 Capture Your Flag interview, software entrepreneur and Loku founder and CEO Dan Street shares how making emotional connections online has been difficult and how solving this represents a next major phase of Internet design. As traditional media evolved from transactional to emotional, Street sees the Internet moving from Google-based transaction to more human or emotional connected experiences. Street is the founder and CEO Loku (previously named Borrowed Sugar) which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University.

How Private Equity and Management Consulting Prepare Startup CEO - Dan Street

In Chapter 16 of 20 of his 2011 Capture Your Flag interview, software entrepreneur and Loku founder Dan Street shares how private equity finance and management consulting experiences prepare him to start an Internet software company. Through M&A private equity deals and consulting for Internet software companies, Street learns about the emotional connections that come with founding a company as well as how to run an Internet business. Street is the founder and CEO of Loku (previously named Borrowed Sugar) which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University.

How to Recruit a Technical Co-Founder - Dan Street

In Chapter 17 of 20 of his 2011 Capture Your Flag interview, software entrepreneur and Loku founder and CEO Dan Street highlights how he selected his technical co-founder, Shea Sullivan. He found Shea a great complement skill-wise. Street offers three criteria to selecting a good technical co-founder. First, Street believes a technical co-founder should provide both complementary skills and the way you think. Second, believes trust is fundamental to choosing a technical co-founder. Third, he believes mutual commitment is fundamental. Through the startup process, Street learns that he and Sullivan should have considered adding a third person who had venture capital fundraising experience. Street is the founder and CEO of Loku (previously named Borrowed Sugar) which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University.