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Watching my two kids play, it’s striking how different they are. My younger son (4) turns everything into a make-believe game. Give him two sticks and suddenly they’re space ships. Give him a handmade car (which we built recently at the Halifax Art Gallery; it’s meant to be Jeff Gorvette from Cars 2) and he’s doing a race through the hallways of the place for an hour. His imagination is incredible.

My older son (7) has a great imagination as well, but he’s also much more practical and analytical. It makes sense because he’s older, but he’s always been that way. Give him two sticks and they’re two sticks; he may want to see how far he can throw them or whack them against a tree to see them break … but they’re still two sticks. If someone suggests to him that they’re lightsabers and we should battle as Luke Skywalker and Darth Vader, he’ll absolutely join in and participate … but he’s not creating fantasy worlds around himself. His practicality and analytical approach to things helps him solve puzzles, ask insightful questions, and stick with things that need resolving.

It seems to me that startup founders need a healthy dose and mixture of both imagination and practicality. One without the other makes you an incomplete founder and leader.

I think it’s possible to work on and train both your imagination and analytical skills. There are hobbies for example, that help with both. Take photography. It’s creative and imaginative, but requires a keen eye, technical know-how (if you get past basic cameras), and good timing. Drawing is another good example. On a personal level, I’m hoping to work on both photography and drawing this year. I’d like to take more pictures and learn how to take better ones. That’s part of the reason I’ve put my Instagram stream at the top of the blog; to remind and inspire me to keep taking pictures.

There are lots of ways that you can push yourself to be more imaginative and more practical at the same time. And that balance will help you be a more successful startup founder and leader.

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I’ve slept under my desk before.

A few times in fact. It wasn’t comfortable, but it was more comfortable than sleeping on my chair or on top of my desk (I’ve tried both.) Somehow the existence of the desk made it feel a bit safer…

At one point (at one of my startups many years ago) we bought a couch that converted into a bed. I never used it, but my partner did. Others may have as well. There was an air mattress floating around somewhere too.

Startups aren’t fair. Neither is life. It may be that entrepreneurs are so young these days (particularly in the hotbed of Silicon Valley) that they haven’t had enough life experience to appreciate that fact. They’ve got all the enthusiasm and hustle in the world (both needed in massive quantities to succeed) but not the battle scars to understand what it’ll ultimately take.

But startups don’t own the “work insane hours like mad fools” space entirely unto themselves. Have you ever met a doctor that’s on a 24 or 36-hour shift? Now that’s insane, especially since they’re job is to save people’s lives. I’ve known young lawyers who join a firm as a junior associate and work absurd amounts; consistently more, for longer periods of time, than most people in any startup. And big game companies are known for pushing their people into super intense crunch periods before their games are finished. Life is hard. Work is hard. No shit.

There are plenty of examples of people having to work hard. Perhaps too hard. There’s definitely a startup culture around working tons of hours, although you can’t measure success or output simply in hours. Most of the time there’s some level of compensation: high salaries, big bonuses, etc. Whether the compensation matches the expectations is not always obvious or true, but there’s usually something in place. In a startup, the motivation is the experience – you either want to live the experience of the roller coaster or you don’t. I completely understand if you don’t, and even those addicted to the experience question themselves from time to time when things are really bad. Compensation in startups is tricky because salaries are usually lower (certainly at the beginning) than market value. This is often compensated with equity and the dream of future riches. Most don’t get there, which is why those future riches are a difficult lever for motivation, especially when the equity doled out is so little. The earliest employees deserve a bigger piece of the pie.

There are lots of great reasons to join a startup. But there are cons too. That’s life – pros and cons – and being able to balance those to your own comfort level is important for your survival and success. I don’t see the level of complaining that Michael Arrington makes reference to, but it doesn’t surprise me. The grass is always greener on the other side right?

Whenever this discussion around work/life balance, startup culture, startup “realities”, etc. emerges I always go back to a post I wrote in July, 2007 when I was starting Standout Jobs and my second son had just been born: How to Start a Company and Family at the Same Time. It still makes me nod and smile, and although my kids are a bit older now, it’s still a crazy struggle every day to figure out the right balance between family, startup / job, myself, my wife and life. Who knows if I’ve got it right?

Joining a startup – particularly an early stage one – isn’t a simple career choice, it’s a lifestyle choice. You have to go in eyes open and not only understand what’s coming, or just appreciate what’s coming, but embrace the experience fully, and be in it because of the experience.

And every once in awhile, that’ll mean sleeping under your desk…

Man lying under desk image from Shutterstock.

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Some people spend all of their time in the clouds, thinking big thoughts, dreaming big dreams. They’ve got a vision for something and they can (often eloquently) speak to that vision and why it should be a reality. They’re “big thinkers.” Some people are completely the opposite – so detailed-oriented that they have to inspect everything, control everything, and make every decision from the most important to the totally mundane. Let’s call them “perfectionists.”

Most people are in the middle.

I think startup founders need the ability to instantly and constantly move between the two extremes. The middle isn’t good enough. Neither is remaining with one of the extremes, because you’ll either be incapable of making things actually happen (as a visionary) or you’ll be too slow to build momentum and remain competitive (as a perfectionist.)

Startup founders need vision. I’ve called it a big, honest vision. It’s audacious and grand, but at the same time not delusional and absurd. Founders need to picture a world where their startup is insanely successful and having an impact. And they need to share that vision in a big way with their team. But without an ability to execute – without an ability to get into the dirt, identify the nitty gritty that requires attention, and fix real, every day problems – nothing gets done. You have to be a master of getting things done, efficiently, decisively and aggressively.

From a 30,000 foot view to a 3 inch view, founders need to swing back and forth at any given moment, and be capable of excelling in both worlds. They have to be able to tie the worlds together — understanding and communicating (to their team, investors, customers, partners, etc.) why making what would appear to be minor changes or decisions is part of a bigger, visionary plan, and how an audacious vision can be achieved through focused attention on details and execution.

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In startup land, we all make leaps of faith. I think it’s part of being an entrepreneur – you need to have just enough confidence, startup swagger and insanity to jump … and figure it out before you crash. And I don’t think leaps of faith ever completely go away, even if you follow a rigorous Lean Startup and customer development approach. Sometimes, you go with your gut and run (or fall … or both.)

But too many leaps of faith and things start to fall apart. There are “educated guesses” and “plain old we have no fucking clue” type guesses; the former being the ones you can reasonably make from time to time.

When pitching investors, you have to demonstrate enough logical thinking to fill the gaps between your leaps of faith. Here’s a classic example:

Entrepreneur pitching says, “When we have a lot of users, we can do X and Y which is how we make money.”

The first huge leap of faith is “getting lots of users.” The second leap of faith is that “people will care about X and Y.” An investor (or anyone for that matter) will immediately ask, “How are you going to get a lot of users?”

You probably don’t have all the answers, and there’s definitely some uncertainty here, but this is the exact moment where an investor (or customer, partner, etc.) decides whether you’ve got what it takes to succeed. If you gloss over the leap, you fail. If you stumble over the leap, you fail. You don’t need to provide a thousand ideas, or ultra-detailed strategies, but you need to demonstrate enough competency that you can fill in the unknowns intelligently. Incidentally, this is where Lean Startup and customer development can really help. Imagine answering this question as follows:

We have some strategies we want to implement for user acquisition. Based on our research of the market, and speaking to prospects, we’ve found that most of them spend significant time on Facebook. So we’re going to test Facebook advertising (or we already have and we’ve seen good, early results) and put a fair amount of emphasis on our Facebook profile. We’re also making sure we use Facebook Connect for people to signup. Our next experiment will be [fill in the blank] because [fill in the blank] and we’ll measure the efficacy in number of signups, and then in terms of active users, defined by [fill in the blank].

Maybe your experiments will work, maybe they won’t. But at least you have some! And there’s some reason and thought behind the leaps.

I’m using an investor pitch as an example of when the leaps of faith you’re making will come into serious question. But way before you get to pitching investors, you should be identifying the leaps of faith in your business model and plan, and figure out how to fill those gaps. Ash Maurya makes reference to this in a recent post, Build Your Startup Through Conversations. He describes a step before Customer Discovery, which he’s called Business Model Discovery. It gives you a chance to holistically tackle the business and bring in advisors to help with the process. The goal is to identify the “gotcha” spots in the plan and business model, and come up with hypotheses on how to solve them before investing in customer interviews, etc.

I’m all for leaps of faith. Customer development and Lean Startup aren’t meant to eradicate leaps of faith from startups completely, but they’re good processes for reducing risk and eliminating waste. Whether you use customer development or Lean Startup (or anything else for that matter), you have to have answers for the leaps you’re making. If you make them completely blind – you might land on the other side safely – but it’s more likely that you’ll fall to a very painful death.

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Recently I’ve been reviewing a bunch of startup pitches (over 150) for a couple of different things, and it’s frustrating to see potentially good ideas and quality entrepreneurs get ignored too quickly because their pitches suck. It’s like resumes with typos – there have to be some basic filtering mechanisms for written pitches, otherwise reviewers would be overwhelmed. Incidentally, my feelings on this apply to face-to-face or phone presentations as well as written ones.

One of my simple filters is this: Use Cases vs. Buzzwords.

Investors need to be able to instantly understand your value proposition. Even if they don’t agree with the value proposition, you have to spell it out very clearly, otherwise you’ll get junked immediately. A value proposition doesn’t need buzzwords. Buzzwords are almost always focused on you – the startup – and not on the most important person that deserves attention in your pitch: the user or customer. Buzzwords rarely reflect the value to customers. Words like “revolutionary” or “patent-pending” — do those things really matter to users? What about “next generation” or “innovative”. These are all words focused on you, the startup.

Scrap all the buzzwords and get to the point. Most investors have seen hundreds of pitches, you’re not going to wow them with lengthy, meaningless descriptions.

Instead, focus on use cases.

How will the product be used? And I don’t mean in broad terms – but literally describe how it gets used.

Who benefits? Why do they benefit?

How does your product fit into your customer’s daily life?

Use cases are practical. They’re also a great form of storytelling. They allow an investor to envision a user actually using your product. Hopefully they can relate to the use case (or know someone that can) which is going to connect them immediately to what you’re doing. Without use cases, there’s very little chance they can relate at all, and every investor invests in stuff they understand.

If you can’t describe a compelling use case you may not have a compelling value proposition. It also shows a potential lack of understanding of your customer. And if that’s the case you’ve got bigger issues than a bad pitch. Use cases get right to the nitty gritty of your startup, but too often they’re obfuscated in pitches. Instead too many pitches are filled with long-winded diatribes on how you will fundamentally and radically shift the ever-evolving landscape of cloud-based web gadgetry through patent-pending algorithms that match a broad-base of users with the intent-driven goals they’re socially connected to.

Quick side note: DO NOT put the word “cloud” in your pitch unless you actually understand something about cloud computing. Hosting something on the Web does not count.

Use cases. Use ‘em.

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The process of starting a company is messy. It has massive ups and downs, tons of uncertainty and a significant portion of time is spent doing things you don’t know how to do, or don’t like doing. But that’s the Startup Process. Either you embrace it and love it or you get out.

Don’t expect that most of your time as a founder will be spent doing things you love (i.e. building your product). Building a great product is just assumed. Ultimately everything hinges on the product, but so much more has to happen successfully for a great product to be realized. And all of those “other things” are generally things startup founders don’t want to do.

Here are some examples:

• Raising Capital – It’s time to change the way we describe raising capital as “a distraction.” You need to look at it as much more than that. No startup survives without money. If you have to raise it from external sources then that becomes pretty damn important. The lights can’t stay on otherwise. Very few people like raising capital, and first-timers can’t believe how much time it takes away from “doing what they should be doing.” But enough of that. If you’re raising capital because you need it to improve your chances of success, then do it. Don’t complain about it and embrace it.
• Hiring – This typically comes later in the process, but it’s very sad how little effort most startup founders put to it. Except without the best people, you likely won’t succeed. So again, hiring top talent is a prerequisite for success (like raising capital) and yet it’s looked at as a distraction. It’s not. It’s core to improving your startup’s chance of success.
• Legal – You may delay formal legal stuff for awhile when you’re very early on and just investigating the potential for your startup, but don’t ignore doing things right when it comes to corporate structure, employee agreements, share structure, etc. This stuff can (and will) come to bite you in the ass later. Even in a mild way, if you don’t have your legal ducks in a row when you go to raise money or hire people, it’s troublesome and wastes more time.

You don’t have to love all of these things, but you have to love the overall process – the Startup Process. You have to love the experience, or at minimum accept the realities of your situation (you don’t get to code by yourself in a room for 12 hours a day) and make sure these sorts of things are top priorities, not distractions or irritations. They’re a necessary and critical part of succeeding – so get to ‘em.

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Every startup has competition. In fact, I can virtually guarantee you that someone is already working on your idea. And you know that you can’t go into an investor pitch and say, “We don’t have any competition.” That’s completely untrue and sends horrible signals to investors.

But who is your biggest competitor?

Most startups have several other startups (at least!) playing in the same space. But I don’t necessarily consider them real competitors, unless one of them has real market traction. If you have a bunch of startups all roughly at the same stage and none of them owns a significant piece of the market, they’re not really competitors. They’re creating a lot of noise, most likely distracting you and scaring you (this is the “holy crap reaction to competition!“), but they’re not hardcore competitors. You still need to demonstrate an understanding of these players and the overall market, and start to differentiate yourself from them (for your own benefit and when pitching investors), but you can’t get obsessed with them.

The real competitor you need to obsess over is the dreaded “doing nothing.”

“Doing nothing” is even worse than the good enough solutions provided by big competitors. “Doing nothing” is right at the very root of human nature: laziness, uncaring, “meh.”

Chances are the real alternative to your solution is “doing nothing” and not another competitor (startup or otherwise). Changing behavior is hard. Being haphazard about how you go about changing people’s behavior will kill your startup. You have to be methodical, analytical and totally focused on getting people to do what you want. You have to be 100,000x better than the alternative: doing nothing.

I’ve rarely seen “doing nothing” or even “the status quo” listed as a competitor in startup pitches – and maybe that’s because everyone recognizes this as obvious, but then startups go off and build products, provide solutions and try to sell customers without a strong enough value proposition to justify action. So customers sit and wait, maintaining the status quo of doing nothing and getting psychologically further away from being interested and motivated to do what you want. More than anything, startups need action. Even if people aren’t using your product quite the way you want, or they’re not using everything, or they’re not sticking around long enough, out of the gate you need action. Without any activity you can’t learn and iterate fast enough. But even with early adopters, you need a compelling enough value proposition to get them moving, to turn inaction and doing nothing into action.

“Doing nothing” is probably your biggest competitor. That’s where you need to put most of your focus, not on other startups in your space.

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More and more people these days are technology tinkerers. They’re messing around, trying new things, jumping from small project to small project, but never settling on and committing to one thing. It’s certainly easier and easier to tinker, which is great; it makes building stuff more accessible and less expensive. And that can lead to new innovations, ideas and startups. But beware of too much tinkering.

At Year One Labs we see quite a few tinkerers; people working on interesting stuff, but oftentimes it’s small in scope and they’re doing a ton of projects simultaneously. And not surprisingly, they rarely finish anything either. That makes it harder and harder to judge someone’s ability to execute and scale. It also throws up red flags around issues of commitment – and a startup is nothing if it’s not about commitment.

We all hit periods in our lives when we need to tinker. After Standout Jobs, I couldn’t commit to starting another company right away. So I did some consulting (and still do), while exploring options. And tinkering. It didn’t take me long to jump into my next project (Year One Labs), but even that affords me a bit of opportunity to tinker (and assuage my ADD) because we’ll be working on numerous projects at once.

The danger in tinkering is when you can’t get out of it. Tinkering may lead to fantastic stuff, and may even lead to starting a company, but it can also lead to endless tinkering. And there’s a big difference between a Tinkerer and a Founder.

Tinkering also tends to shrink people’s vision. Big vision is a good thing, even if you focus on executing in small chunks (think: minimum viable product.) There’s a duality there that has to be dealt with: big audacious goals & vision vs. getting shit done and executing. Tinkerers definitely struggle with big vision, and they also aren’t as focused as need be on getting shit done.

So if you take a moment and look at what you’re up to: are you a Tinkerer or a Founder? And if you’re a Tinkerer, are you ready to make the jump and become a Founder?

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I started my first company in 1996 while attending McGill University. It was between my 3rd and 4th years. I completed my degree and graduated, but work was a heck of a lot more fun. Plus, I never picked up my diploma…

Earlier today I spoke at Startup Square’s inaugural event. What’s great about Startup Square is that it’s a collaboration of students from different universities and schools in Montreal. If the administrators at these places won’t get together and help create an entrepreneurial culture, then the students will take the reigns. And that’s exactly how it should be. Inasmuch as it would be wonderful to see a complete bridge between entrepreneurs – schools – students, we may have to skip the middleman.

My presentation was entitled, “How to be an Entrepreneur While Still in School”. It was really a glorified trip down memory lane, covering some of the bumpy, funny and successful moments in my entrepreneurial career. Hopefully the students found it worthwhile. Without a doubt there are many smarter and more creative folks out there, and I’m hunting for them. But the truth is that smarts and creativity only get you so far, being opportunistic on the other hand…

I’ve included my presentation below, but most of it won’t make a lot of sense out of context. However, I did want to discuss 3 key points about how students can be entrepreneurs while still in school (or immediately after graduating):

1. Be open
2. Take risks
3. Be strategic

It’s really as simple as that. Everything I’ve done (successfully and unsuccessfully) has been a result of combining those three elements.

You have to be open to opportunity, recognize it and go for it when it comes. You have to be willing to take risks and realize that they’re not that risky after all. And you have to be strategic about what you do and how you go about it. You’re not out there in the world shooting a machine gun with your eyes blindfolded. You’ve got a precision laser assault rifle (or some such nasty weapon of choice) and your eyes are very much open.

Be open. Take risks. Be strategic.

And if you have any questions about the presentation, please ask. If you’d like to meet, connect, talk about startups, your startup, or working at a startup, use the Tungle.me widget in the sidebar.

images in the presentation provided by Shutterstock

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In this tough economic climate raising capital is going to be even harder. It was already hard (for most people), and venture capitalists or holding the purse strings tighter than ever. With that in mind, it’s the perfect time to improve your pitch. A bad pitch will kill you each and every time; and it’s even more important at this stage to keep the doors from closing in your face.

Startup Camp Montreal – organized by the good folks at Embrase – is an opportunity to get on stage, in a relatively friendly atmosphere amongst friends and peers, and do your pitch for raising capital. There are judges as well, venture capitalists, angel investors and others, that will critique your presentation, ask tough questions and generally … help you out.

They want more startups to apply – and I would encourage you to do so. All you have to do is list your company, and get in touch with them. It’s a good environment to test out your pitch, get honest feedback and improve.

Here are the Startup Camp details:

Date : November 27th, 2008
Time : 6pm to 10pm EST
Location : SAT – Société des arts technologiques
Address : 1195 Saint-Laurent boulevard, Montreal Google Map