Jack Dorsey Offers Advice

At this week’s TechCrunch Disrupt, twitter creator Jack Dorsey demo’d his new product and company called Square, very cool stuff. Check out the video below to learn more. But what I enjoyed was Jack‘s very refreshing and relevant advice to entrepreneurs looking to raise money from venture capitalists. Surely this applies to angels too, but @jack was really talking about VCs. Check it out, it’s about 14 minutes in.

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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.

TechSpace is Good Space

When Citysquares first launched as an idea I was still running Atomic Enterprises. We had an office in downtown Boston, near the Orpheum Theatre and across from the Park Street T station. It was a great location. The office left a lot to be desired though – there were break-ins, fires, junkies lingering outside, criminal activity in front of our door, and lots of shadiness.

Back in September of ’06 we (Citysquares) moved out and went virtual. Getting an office wasn’t a priority for a while, as it was saving us good money and we were still productive. But it didn’t take long for morale to take a dive. That was tough, really tough at time. Bob lives in Groton, about an hour away, and Chris, at the time, lived down the street from me. He’d come to my house and work in the basement with me – awkward, yes, but necessary for us to maintain sanity. Bob continued to work from home, in Groton.

Over time, morale took a big dive and we were losing productivity – starting to get frustrated with the situation. An office was immediately necessary but we really couldn’t afford anything, – then came the funding.

We were in the market for an office. Having had an office in the past I knew the operational headaches that come with a regular office – a lease, utilities, Internet service, phone service, parking, security, cleaning/maintenance, and all of the other bullshit that comes with it. Then, you end up spending 10-15% of your time dealing with all that – paying those bills, dealing with outages, changes, etc etc. Argh! No thank you! I need to be productive. We, as a company, need to be productive. A shared office space would be ideal.

We looked at HQ, Regus – no thanks. Too corporate, stodgy. If we were a law firm or a brokerage of some sort, sure why not. They were also pretty darn pricey. Then we checked out Cambridge Innovation Center (CIC), in Kendall Square, Cambridge. Let’s just say we weren’t treated too well so that didn’t work out. We fell in love with TechSpace in the South End, but we weren’t too thrilled with the location and needed a little added incentive.

We dealt with Paul McBride, the site manager at TechSpace. Paul was very assertive at winning our business. We put up a bit of a fight and weren’t totally convinced that TechSpace would suit our needs. We had very specific and technical requirements, especially pertaining telecommunications. Paul bent over backwards for us and proved to us that we’d be a valued tenant here at TechSpace. Eventually he had to let go and leave us to make the decision, which we did after a ridiculous amount of internal discussion.

We moved into TechSpace in one day, about a month ago. We’re extremely pleased! Paul has proven to be a fantastic resource for us here, and the admin staff, Myrna and Grace, are top-notch. There’s a cafeteria-like set-up here run by a classy old-school Southie guy named Mike. He does a great job of serving up breakfast and lunch every day here.

The atmosphere at TechSpace Boston is creative, funky, fun, communal, casual, techie, dot-commy. It’s a great place. We’ve got these giant windows at our desks that open up – thrilling! We’ve got access to 4 bonded T-1s, chilling! Four conference rooms, a parking lot, our own private suite, a full IT infrastructure, good people in the neighboring suites and in the hallways, and most importantly – we’ve been super-productive since the day we moved in here.

TechSpace is a great space. If you’re in startup mode, or if you’re a small, innovative and creative company, check out TechSpace at 580 Harrison Ave, 4th floor, in the South End of Boston. Call Paul McBride at (617) 275-7000. He’ll treat you well if you tell him Ben sent you!

2007-05-31: Quick update to this. I just learned that one of the bigger tenants here is moving out in June. Lots of new space available. We may have to relocate down the hall. But also, I just learned that yet another dot-com is moving in here. This is really turning into a nice spot for Boston dot-coms!

Citysquares Raises First Round – Now It’s Official

OK now it’s official, Citysquares has closed our first round. As described in a previous post from last week we raised the money from eCoast Angel Network as well as a couple of angel investors from outside eCoast. I gotta say too, it’s been a total pleasure working with eCoast so far. OK sure, the going hasn’t exactly gone tough but the point I’m trying to make is that I’ve heard nightmares about raising funds, especially the first round, and especially from angel groups. But I rather enjoyed the process! Yes, I suppose I enjoy pain and agony, but I enjoy hard work more, and the fruits that it yields.

We actually secured the round last week, on Friday evening. Bob and I took a spin up to the NH seacoast around 4:30 or so. Up route 128 on the worst day and the worst time of the week. But it didnt matter – we were feeling great. I actually had tickets to the Red Sox/Yankees game that night too, I was supposed to attend with my brother. The first matchup of the season, and I couldn’t attend, and for good reason. Afterwards, Bob and I went out to celebrate a bit – nothing crazy. Some Redbones and then Publick House. Caught the end of the game at Publick House.

This week has been largely operational stuff. Things like getting the new bank account set up, making the deposits, coordinating things with the lawyers, signing documents, getting payroll setup (Bob and I haven’t seen a paycheck in about 20 months, so that was a big priority), the office space, and some PR stuff. Now that all that is mostly done, I’ve been able to catch up on some more important work today, like dealing with our need for a full time business development hire – the “bulldog” as we call it.

So it seems the dust is settling now. The press release is going out tomorrow morning, Mass High Tech is doing a feature story on us, the blogs will surely be buzzing soon enough, and then bang – I’m right back into it Monday. I am more excited for this coming Monday than I’ve been for almost any Monday in quite a while. Reason being: “it’s a new dawn, a new day, and I’m feeling good.” (Nina Simone)

But seriously, next week, the dust will mostly be cleared and it’s game time. Hire our sales people and really get moving. We’ve got a lot to accomplish over the next few months. Bob is focused on the IA for the new platform, Chris is focused on developing brand awareness and business development opportunities out in the streets, and I’m focused on getting the sales engine firing on all pistons and ensuring that Citysquares can quickly and painlessly become a lean, mean, sales-minded company that it’s in it to win.

Citysquares: Raising Money

Well it seems I’ve created quite a stir with some recent job postings. Having posted a few job openings on this here blog, on Citysquares.com, on Craigslist, on Monster.com, what did I expect? I suppose I wasn’t too shy about it either.

Since posting the job openings I’ve received emails from a couple local business publications and some well known web blogs. I was actually a bit surprised at how assertive some have been – wanting to be the first to break the news. I’ve even received a couple phone calls and emails from folks I haven’t heard of in many moons, some of them opportunists unfortunately.

So allow me to address the rumors here and now, and unofficially announce that yes, indeed, Citysquares is raising our first round of funding for an undisclosed amount. We’re in the final 10 yards of the closing phase and once it’s official we’ll be sending out a press release and you can expect some press and the typical buzz. I expect this to be official, and hence officially announced, at the end of this week or first half of next week.

The investment is being lead by eCoast Angels, of Portsmouth, NH. We’re also roping in a couple outside angel investors for this deal, with eCoast’s permission.

Over the past 18 months we presented to a couple groups. We never presented to a venture firm, only had informal meetings with a couple. Bob and I convinced ourselves, for better or worse, that at this early stage we weren’t looking for venture funding. Our rationale? We weren’t ready for it. We still had more work to do. Angel money just made more sense. Angels will buy into an earlier concept and business more readily than a VC. Another reason was this: if we can’t convince any angels to invest, how the heck are we going to convince a VC firm to invest? Ultimately, for us, raising angel money was our goal, but we wanted to find the right angels, not just any angels. We felt strongly about that.

I’m certainly no veteran or source of wisdom, but I do have my experience to share, and that’s what I’d like to do – share this experience and even share a little knowledge I picked up along the way.

When we first started Citysquares in late 2005, Bob and I weren’t immediately focused on raising capital. We weren’t even too sure we had a real business on our hands. It took a few months to realize that we were truly onto something, and that the recipe had some flavor. So very early in 2006 I set out to write our business plan, figure out who we were, and where we wanted to take Citysquares. We established an advisory board, worked very hard on what is still a very well written and comprehensive business plan, and began our fund raising efforts. As I stated above, we’d presented to four groups over the past year +. Some of our lessons and experiences include:

  1. We are not lacking for energy and passion. And that, beyond anything else, is what really peaked investors’ interest. You can’t buy passion and energy, it’s innate. You either have it or you don’t. Our energy and passion has taken us further down the road than anything else – hands down. Without that passion and energy we’d be working full time jobs somewhere else.
  2. We never got discouraged. If you’re an entrepreneur, that’s not a word in your vocabulary. Most Boston area angel groups invest in technology companies and life sciences; IT, hardware, telecom, software, bio-tech etc. Boston isn’t exactly the best place to raise money for a new media company. At the end of the day that’s what we are. Perhaps the most common reason these groups didn’t invest is because we lacked proprietary technology. That was also probably one of the most frustrating things to hear. Nevertheless, it’s reality. We never got discouraged. Disappointed, sure, but not discouraged or negative. Our advisers were incredibly helpful here, without knowing it. Just their presence, time on the phone or over coffee, really helped us understand that we must stay focused on the goal – just keep executing, keep working hard, and it will happen.
  3. If you don’t like the investors, run! In October of 2006 Bob and I were flown out to the west coast to meet with a potential investor. He flew us out and took care of our accommodations, very cool. After spending 4 days with him we realized that it wasn’t a good fit on many levels. We made our final offer and ultimately decided to walk away. This was not an easy decision. My gut was telling me to get on the next plane back east, but Bob and I wrestled with it each evening while in the car or at the hotel. This was another important lesson. Looking back it was probably one of the best lessons we’ve had over the past 18 months – you have to like the investor. If you don’t like them now, what do you think it’s going to be like in the board room when things get tough? Bob and I always believed in finding an investor who believed in the model, of course, but also our philosophy and mission, and who shared those values with us.
  4. Beyond the fund raising process, perhaps the most important lesson of all had to do with our advisers. Good advisers are truly hard to find. We met several folks who didn’t know us from a hole in the wall, yet after only a couple phone calls, emails, coffee meetings, or drawing pretty pictures on a white board, whatever, they were very aggressive and determined to “join our advisory board” and even proposed their own ideas for compensation. I’d been down this road once before with my previous company and learned some very hard lessons. So my gut was screaming at me. “Run!” it was saying, “run for the hills Ben!” Sometimes that’s not an easy thing to do, especially if you get like the person. Lesson here? Choose your advisers very carefully and know what you’re getting from them, but also set their expectations too. The advisers we ended up with, who’ve been the most valuable to Citysquares and to me, professionally, are the ones who never asked for a single nickel or share in the company, and have made unbelievable contributions. They call me just as often as I call them. We’re very lucky to have such kick-ass advisers. I was straight-up with them since day one, as they were with me.
  5. Know your Self. Much like growing up, it’s ever so important to know who you are, have a sense of Self, and purpose in life. I know it sounds philosophical but it’s a serious reality. A business is an entity, much like a person is. A business has a pulse, a mission in life, a personality. And without having at least a fundamental grasp on these things, you’re kidding yourself if you think you can form valuable relationships and try to raise money. Lesson here? Have a sense of Self, and know what you want to be when you grow up. And this has a lot to do with focus. Without focus you’re shooting at too many targets and early success is exactly that, a moving target.

One of the things that really struck me and Bob about eCoast Angels is the personality of the group. As Bob put it, “they seem like salt of the earth kinda guys.” I love that. He articulated it pretty well. Bob, Chris, myself, – yeah, we’re salt of the earth guys. So just from that perspective it seemed like a good fit even before we presented. The further down the path we went with eCoast, the more evident that became, but it’s also become quite clear that they have so much more to contribute here than just money. That alone is more valuable than any amount of currency. At a meeting with eCoast last week it became more and more clear that they’re full of not only wisdom and experience, but they’re full of ideas, energy, passion. I am truly, and in my gut, excited to work with them.

A couple of months ago I posted a blog entry titled, My Truth about Entrepreneurship. I was bare naked, at a very unpredictable time, and I wrote about it. I wrote that entry before meeting eCoast. I had no idea what was coming. At the end of the post I stated the following:

There is an old Chinese proverb, I believe, that goes like this:

The temptation to quit will be greatest just before you are about to succeed.

I have felt that temptation, I think I just went through it, over the past couple of weeks. I believe that I’ve just turned that corner and I’m now staring success straight in the face.

Well, I don’t think I’ve put my foot in my mouth just yet. My gut is treating me well. I know that the long days and the hard work aren’t over – I know the reality. But I also know that I don’t necessarily have to wake up every morning on the edge of a cliff, and walk each day on a precipice. I know that there are more lessons to be learned and that I will be tested in new ways. I’m excited. The future is bright, brighter than ever before, both personally and professionally.

Stay tuned for more. The best is yet to come.

Citysquares is Hiring

Clearly if Citysquares is hiring, something is up right? Well, as much as I want to be 100% transparent and brutally honest, I have to hold back for just a little bit. Conclude what you will, but I will say no more for superstitious reasons, but also to respect the privacy and my relationship with others. I will stop there. More to come though. Please forgive me if I’m violating some hidden secret code of the blogosphere.

Citysquares is currently seeking candidates to fill the positions listed below. If you know of anyone who might be a good fit, please let us know! Any questions can be directed my way.

These jobs can also be found on our website at http://www.citysquares.com/about_jobs.html.
That’s all folks! Wink

For Entrepreneurs: Podcast on Angel Investing

I came across this today on Brad Feld’s blog. It’s a Podcast from Colorado StartupsDavid Cohen. It’s a fantastic conversation, about 40 minutes in length, with Brad Feld and Kimbal Musk.

If you’re an entrepreneur looking to raise money, this is very useful; great perspectives.

Click here to listen to the Podcast.