Choose Your Weapons Wisely

Thursday evening Bob and I attended a networking event in Waltham hosted by TCN, at Foley Hoag’s Emerging Enterprise Center. As usual, it was well worth our time. We met some great folks who are doing some cool new things in a variety of innovative industries. We also got a chance to catch up with some folks we haven’t seen in a while. After all this I started to reflect on how instrumental some of our service provider choices have been for CitySquares. Choosing the right vendors is critical for a startup and I firmly believe that it can make the difference between being a startup and a relevant startup.

Find the right law firm. When we started out in 2005 I actually made it a point, and a time consuming process, to go out and interview law firms. Being that we’d be interfacing with consumers as well as small businesses, hopefully in high volume, I knew we’d need good representation and especially if we were going to raise funding. First, I wanted a firm that could provide a full suite of services to us. Having worked with boutique, or home based lawyers, I knew what they could provide and I knew very well what they couldn’t provide. At my previous company a home based attorney was OK, but not for CitySquares. Secondly, I wanted a firm that had extensive experience with high tech startups and Internet startups. That was very important to me. Lastly, I needed a firm that could provide a deferment. So I set out on a two month project to find the right firm for CitySquares. I literally conducted interviews. I had lawyers from small firms and large firms coming to our old office to meet with me and sell me. Most of them were pretty darn good. They were about as good a salesperson as I am, and that concerned me a lot of times. Other times I’d go to firms and they’d show off their view of Boston, or impress me with meetings with senior partners in the firm. At times I was flattered, because, who were we? We were nobody yet, and we didn’t have two nickels to offer. But I think they were all selling me just as much as I was selling them.

One evening I went to an entrepreneurial event at Foley Hoag called “Negotiating Term Sheets.” The attorney from Foley Hoag who lead the event seemed like a nice enough guy, and he put up with me during the event. I was a little outspoken at times about some of the terms and even about raising money at all. He tolerated this. After the event I asked for his card, told him that we were looking for a firm to help us with various corporate matters, funding, and then building the business etc. Long story short, Foley Hoag is now our law firm.

Now, I have to say that despite the fact that, yes, we’re talking about lawyers here, there is no substitute for a good lawyer. What I like about our firm and about our guy, is that a) he’s not your typical lawyer, he’s a pretty regular guy – salt of the earth, b) they treat us extremely fairly in any number of ways, and c) they have this EEC thing I mentioned in the first paragraph – the Emerging Enterprise Center. I can’t say I’ve attended all that much there, but when I have it’s been well worth it. It’s all about value-add right? I hate that expression, but it’s so true.

Find the right bank. Also along these same lines is picking the right bank. When we were on the hunt for financing we knew we’d need a good bank. And some might say that Citi or Bank of America can do just as good a job as any, or that the community bank around the corner can. And ya know, that may be true but it’ll be a long time until I find out because we chose Silicon Valley Bank based on numerous recommendations by numerous trusted folks, from our advisers, our CFO, to our attorneys and prospective investors. If it’s good enough for them, it’s good enough for me. I don’t quite know what I’m really looking for in a bank anyway, aside from lower fees, good rates, and a strong relationship. What you get with SVB is the later, strong relationships that hinge on the very fact that you are a funded startup company and that they understand your needs unlike any other bank. They also have relationships with your investors, as well as countless others, and that makes for some very good treatment. They know that if they treat you well, that they’re also treating your investors well, and in doing so, building relationships. Silicon Valley Bank was able to get us started on some basic banking services very fast, but also with some nice value-added services, like an unsecured credit card with a very reasonable rate and limit. Despite their name and that they’re headquartered in California’s Silicon Valley they are here in Boston. They have an office in Newton, not a branch, but they are able to handle deposits there, which they also offer via a free courier service. At SVB’s Newton office is where you can find one or two of Boston’s more well known angel investor groups meeting once a month. Those relationships can start with SVB. I bumped into our rep from SVB at the Foley event Thursday, and he was full of good information about a great many things going on in the Boston startup arena. Again, this is a key relationship that you just can’t find with your standard, every day bank.

Find the right accountant and CFO. There simply is no substitute for the right people handling your books and financial strategies. I’ve been using the same bookkeeper for about 8 years now, and I trust him with my personal finances as well as my business’ finances. He’s handled my taxes, my wife’s taxes, and my businesses’ taxes. This long lasting relationship will continue for a long long time. Why would I ever consider changing? He has never let me down, he’s been with me through the tough times and the good times, and he works very well with our financial strategist, our CFO. If the three of us couldn’t work well together, I’d be in a lot of trouble. I met our CFO a little less than a year ago, he was referred by one of our advisers. He’s got a ton of experience in the Boston startup community, specifically with technology and Internet ventures. Let me repeat that… He’s got a ton of experience in the Boston startup community, specifically with technology and Internet ventures. The more I work with him, the more I appreciate his experience and wisdom and the more I realize how critical a good CFO is. Keep in mind that we don’t employ him on a full time basis, he’s a consulting CFO. Financial strategy, projections, etc., is one area that I’m not savvy in, so having a CFO who can work with me to layout the financial plan, who can work with the board of directors, who can work with my bookkeeper, and office manager, and who understands the scene is just absolutely mission critical. We made a mistake a couple years ago, working with a “CFO” who wasn’t up to par. Well, that’s a mistake I won’t make ever again.

Obviously there are other key relationships that need to be built and cultivated in a startup, but also over the longer term for an entrepreneur. I’ve talked about the importance of good advisers previously, and how hard it is to find them, but I’ve neglected to talk about these service providers. Having good service providers, and top-tier service providers like those I’ve mentioned, brings a certain amount of credibility and respect to the business just as much as having the right management team or the right investors. These folks need to believe in you just like a good investor or employee would. That is the basis of the relationship – trust, and believing in the entrepreneur(s) and in the plan. With that trust comes a relationship, and with that relationship comes top-tier services, credibility, and it puts you in a leading class in the entrepreneurial community. Lastly, I believe that if I do a good job with CitySquares, and if I decide to build another business afterwards, that I’ll be able to count on these folks to go for another ride with me – at their own risk of course!

This Week’s Ma.gnolia Bookmarks

My Ma.gnolia bookmarks for this past week.

Pedicabs get legalized in Boston | BostonNOW

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The Off-Line Impact of Online Ads

The Off-Line Impact of Online Ads

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Govit: Vote on Legislation, Contact Congress by email, and Compare your Voting Record with your Representatives

Govit is a place for you to learn about, join in conversations, and vote on all active legislation. Plus you can send your votes directly to your congressional representatives. Track your votes, and compare them to your congressional representative’s records and others members.

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Communitee Voting | CitySquares

Vote for your favorite CommuniTee Shirt Design!

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Wild Sanctuary

From a Wired article, private archive of natural sound. Can use with Google Maps too.

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Students’ Art Helps Raise Money For Classes – Education News Story – WCVB Boston

BOSTON — School budgets are not exactly overflowing these days. Classes such as art are often hurt by cuts. Monday, May 19, 2008.

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Defining Success

Hot Air BalloonWhat is success? How do you define what success is when you’re an entrepreneur? I highly doubt that there is any written definition of entrepreneurial success but I bet it’s a subject of debate in business classes around the world. Mirriam-Webster (still better than Wikipedia for a standard definition) defines success as: 1. obsolete : outcome, result. 2 a: degree or measure of succeeding b: favorable or desired outcome; also : the attainment of wealth, favor, or eminence. 3: one that succeeds. … right, exactly.

My gut tells me that I’ll know success when it happens and that whatever I might think it is, I’m already wrong. It’s all about perspective, and that perspective is what shapes success. I suspect that others may say “he’s been successful” or “she achieved success” while the entrepreneur will quietly disagree. Again, it’s about motivation and perspective. Success is totally relative as the definition above more or less eludes to.

This topic is prompted by a recent blog post by Dharmesh Shah, a Boston area entrepreneur who recently closed a round of financing for his company, HubSpot. I really enjoy reading Dharmesh’s blog, and I recently added him to my blogroll (what an honor!). Dharmesh has a perspective that I enjoy and that I share. With his feet very much on the ground, he tells it like it is, and keeps it very real. I share his perspectives on entrepreneurship, on funding, on management, hiring, and business models. Ultimately, I think we’re both a little more old school perhaps than the more typical or stereotypical web entrepreneur.

Back to success….

By no stretch can I say that I, or CitySquares, has been successful yet. Not even close pal! We are achieving small measures of success, sure, but we have not yet been successful. You may say that raising our financing was a small measure of success, but actual success? Not yet. As Dharmesh points out, just because you close a round of financing doesn’t mean shit about your success. It says that you’ve been given a full tank of gas, in exchange for a seat in your car, with the expectations that you’ll get to an agreed destination on time and maybe with some more passengers, and maybe a bigger, shinier, more valuable car. All that raising money says about you and your business is that you’ve been able to assemble a model and sell the vision and the story to (hopefully) some intelligent, experienced folks who may be angel investors or venture capital investors. Either way, most of the time, raising money is simply the result of having a good idea, a good team, and a concept that is ready to be proven, or an actual business that needs more fuel in the tank to get to another milestone. And that is what we’re talking about here, milestones. It’s those milestones that get you to the finish line. Milestones are not themselves success, they are steps towards success.

I frequently hear about this company and that company raising some outstanding amount of money, and people typically respond to that with applause, congratulations, high-fives, and in some cases big parties and celebrations. For what? Because someone said they believe your story and bought shares in your company? Come on…

When running a business, especially a funded business in an exciting industry like the Internet, or pharmaceuticals, or biotechnology, or energy, etc., it’s easy to get swept up in the ego of it all. It’s easy to get distracted, take your eye of the ball, and it’s easy to lose perspective and find your feet are suddenly far above the ground. You can bet your bottom dollar though, that somebody or something will be there to yank you back down. And depending on how high you’ve floated on the fuel of your own ego, the harder you will fall, and the more pain it will cause you, and the more dust it will kick up.

Success comes in varied shades of varied colors. So if you think raising money is success, well, than I tip my hat to you, but I do, respectfully, disagree. If you think that selling your business for multiples of revenue, or traffic, and putting gains into the pocket of your employees, your investors, and yourself is success, well, I will almost totally agree with you. If success, to you, is raising a child, building a family, earning the respect and love of your family, friends, and community, than I wholeheartedly agree with you and you are a winner in my eyes and to everyone else around you. Hopefully you will agree with that.

Migration from Drupal to WordPress.com Complete

Well, I can proudly say that in less than 24 hours, and not without frustration and a few bouts of spilled beer, I managed to get Your Suspect 100% off of Drupal and off of Network Solutions, and onto the free WordPress.com system. I was shocked with out few resources there were available to me, so I had to get very creative. Here’s what I did:

  1. I had to hack the Drupal system.module file to allow for more than 30 items per feed. I upped it to 999.
  2. I ran a cron job just to be safe.
  3. Saved my sites RSS feed locally, and verified that all the content was there, sans comments.
  4. Created a hosted WordPress.org site with a third party company. I made sure that this hosting company allowed for a) monthly plans with no contract and b) a quick and easy way of getting a hosted WordPress site going.
  5. I used the native WordPress Import feature to import a RSS 2.0 feed. It made it in without any issues, again, no comments.
  6. Then, I used the native WordPress Export feature to export all this content as a WordPress file.
  7. Here, are WordPress.org, I imported that file.
  8. There are still some DNS issues and remnant Feedburner matters that I’m dealing with, but for all intents and purposes, I’m off Drupal, I’m off Network Solutions, and I’m on WordPress.com.
  9. I manually updated each blog entry’s category and tags. That sucked, but it was necessary and well worth the effort.

This is a step in the right direction for this blog, easier to manage, more integration with a much larger blogging community, and just a whole lot less frustration.

So for all your rocket scientists out there, that’s how ya do it! Unfortunately, yes, it didn’t include comments, but I can live with that, I didn’t have that many comments to begin with.

Help Me Migrate from Drupal

I’m entirely fed up with hosting my own blog. When I first started this blog I had a geek moment – I wanted to control every aspect of it and perhaps grow it into something beyond a blog. I chose Drupal, and have been hosting it on Network Solutions. Well, today, I don’t care and I’m fed up with Network Solutions, and I’m fed up with FTP, and with Drupal module installation. Since creating the CitySquares Blog I’ve realized how unnecessary all this really is. The CitySquares blog is hosted on WordPress.com, which I love. I don’t need much more than that. So now, I feel like I’m stuck on this solution I chose, and I feel like I can’t migrate off of it. I just want to move my content (blog entries) and comments off of Drupal and into WordPress.com. There are lots of tips on how to migrate from the Drupal platform to the WordPress platform, but that still requires hosting it. I don’t want to host it. So if anyone has any ideas, recommendations, etc, I’m all ears. I’d also consider paying someone to help me with this kind of migration. Any recommendations or ideas?

Entrepreneurial Lessons Learned

Two of the most important and valuable lessons that I’ve learned over my past 10 years of entrepreneurial experience is the following: work on the business, not in the business, and do the right thing with your business. These simple concepts are actually quite difficult to consistently execute on and as far as I can see, they’re the difference between building a typical business and a great company.

At my previous company I frequently found myself dealing with A/P and A/R, collections, or dealing with technical challenges, project management, sub/contractor matters, and more. At the time I would have told you that I didn’t have a choice because “someone’s gotta do it and if it’s gonna get done right, it better be me.” Something else I found myself doing quite a bit of, which I greatly enjoyed, was working closely with customers. And it’s interesting how this concept of “working on the business, not in the business” can be somewhat confusing. To some, working with customers might be considered working in the business, and it can be, if the context is perhaps more operational and tactical than strategic. At CitySquares I frequently interact with customers. In fact, I have my own accounts that only I handle. These are my projects, if you will. I experiment with them and use them as case studies to learn more about their needs and keep my finger on the pulse of the local market. I also interact closely with community organizations like Somerville Local First, among others. This kind of finger-on-the-pulse approach is very much about working on the business.

Along my way over the last few years I discovered two books that made the biggest difference in my professional life. The first is called the “The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It” by Michael Gerber. It’s written well but with over-the-top case-and-point scenarios, but it definitely hammers the point home. This book was a sort of kick in the ass for me and it helped me, as Mr. Gerber might say, “stop baking pies and start building a pie company.” It’s essentially about the mindset of the founder (technician vs. manager vs. entrepreneur). And it was the E-Myth that helped me start CitySquares with the correct mindset, and I’m constantly reminding myself of this and working to improve upon it. The second book is called “Small Giants – Companies That Choose to Be Great Instead of Big“ by Bo Burlingham. This book helped me see a bigger picture, one about being more than a business, one about being a responsible company, a company that gives a shit, that does the right thing by it’s customers, by it’s employees, by it’s community. It’s also about socially responsible business and that’s something that’s baked into the DNA at CitySquares. I highly recommend both of these books to any entrepreneur out there.

I guess my point here is that while some may tell you to “work more on the business and work less in the business” it’s a lot harder than it sounds. One can’t just wake up one day, 5 years into the business, and make her business grow, or change its culture, or its mission. It’s just doesn’t work like that. What she has is baked into the company’s DNA from day 1 and, in my opinion, it’s very difficult to change (although it can be done). If you’re an entrepreneur, or on your way to becoming one, make sure you understand these concepts, make sure you really get it and if you have any doubts about this be sure to pick up the E-Myth and Small Giants.

Finally be sure to buy these books at an independent bookstore! If you’re in the Boston area you can find a locally owned and independent bookstore at CitySquares.com. Really, get off your butt and visit one. Trust me, Amazon will survive.