Tag Archives: entrepreneurship

Aaron Brazell

The Maturation of a Leader

Football has a striking resemblance to business sometimes.

Despite moving to Austin, my allegiance to the Baltimore Ravens remains as strong, and maybe stronger, than ever. It’s been an exciting offseason with lots of power moves and now training camp is in full swing.

For third year Quarterback Joe Flacco, this appears to be his coming out year. The Baltimore Sun ran a story about him the other day noting that this offense is now Joe’s offense. He’s taking command. He’s inheriting responsibility. He’s taking ownership.

He’s taking more command and making more adjustments at the line of scrimmage. He’s looking to become more effective in the red zone. And he’s tutoring new backup quarterback Marc Bulger when everyone thought it would be the other way around.

“I want to be able to just run the show and go up and down the field, blow out points on the board and come out successful,” Flacco said after a 75-minute practice featuring rookies and veterans coming off injuries. “That’s what it’s all about.”

That’s the mark of a leader and something that anyone who aspires to leadership is required to do at one point.

Since being in Austin, I’ve been exposed more and more to the startup life – something I used to live in as the Director of Technology at b5media, a company that used to be a blog network but now is something, well, frankly, unidentifiable.

As a result of my new exposure to a startup culture, I’ve already talked to a few companys to get a feel of how they do business. It reminds me of those early days at b5media. Four founders, making decisions by committee, and hoping for the best. Sometimes consensus was a blocker to real innovation.

This mode is common for early companies. Small group. Everyone needs to be on the same page to do anything. And they suffer from paralysis of no decisions. No one is willing to take charge and lead.

At b5media, once we took our first round of VC money, Jeremy Wright, became the CEO. He was forced into a role of trying to get consensus but not suffering from the paralysis of required consensus. Many times, those of us in those leadership roles diverged in opinions and advocated different directions. It was Jeremy’s role to distill this feedback, foster the discussion, and then ultimately take ownership of the situation and make his call.

Sometimes it was the right choice. Sometimes it wasn’t.

Imagine this. It’s a third and long situation. The Ravens offense is backed up on their own 10 yard line due to an unfortunate series of downs involving an incomplete pass and an offensive holding penalty. They are down by 13 points with 6 minutes left in the game. The safe call, and the one called in to Flacco by Cam Cameron on the sideline, would be a slant play down the middle to a slot receiver or tight end.

As the offense lines up, Flacco sees the defense showing blitz and crowding the middle. Understanding from experience that this is a situation fraught with disaster and the need for a big breakout play to energize his offense, he calls an audible. Ray Rice on a draw play – bait the offense to continue to see the pass, but then destroy them with an off tackle run. Rice runs for 24 yards and gets the first down and better field position.

If it wasn’t for the leader having the confidence and insight to see the minefield upon him, he might just go with common wisdom or, more naturally, the wisdom of his advisors. However, he decides that he has the information he needs to make a big play, owns the call and gets a win.

While it’s common for young startups to operate on consensus, sometimes it requires someone with enough balls to make a tough call and own it. A good team will support that and have their leaders back regardless. If they don’t, they shouldn’t be on your team.

Photo credit: Keith Allison

Feature, Personal

Austin, Texas.

Back in 2007, I visited Austin for the first time with Jeremy Wright for SXSW. I fell in love with the city and have come back for every SXSW since. The truth is, as I’ve since realized, is that Austin is better when it’s not SXSW time and I have spent the past few months coming back and visiting this city every month for a week or more.

As of this past weekend, though, that has all changed. I live here now. I have a job here now (which I will announce more about when it is formalized this week). I have a girlfriend here. I have a built in community here.

In Austin, there are plenty of startups. Besides the one I will be working with, it claims startups like Other Inbox and Gowalla. The sense here is that people feel empowered to be entrepreneurial.

This is a far cry from DC where only a small subsection of people felt entrepreneurial, but most opted to work inside the governmental complex of agencies, NGOs, contractors, non-profits and public affairs. While that is all well and good, I have always believed that the human spirit is a creative one that can only be satiated by creating things, and that is the essence of entrepreneurship.

I have no love for DC. I have lived there for the last year and a half and before that, I spent most of my life 45 minutes up the road in Baltimore. I am not sad that I have left. In Austin, I look forward to resetting life and starting over. The last time I did not share my home with someone else was in 1999. The last time I had to start from scratch and buy everything new in order to make a house a home was… in 1999. Fortunately, I’m in a better position to do that then I was 11 years ago.

I made mistakes in DC that I don’t intend to make in Austin. A year and a half ago, I entered a city and approached it from a social stand point. While I made good friends, they were rare instead replaced by hundreds of acquaintances. The people with enough depth of character and heart to be truly friends can be counted on one hand.

In Austin, I refuse to play the social game. I’m diving deep. I’d rather have a dozen people in my circle that know me well and I know them well, than have 100 people that know me enough to be my friend on Facebook but are mainly just acquaintances.

Lessons learned from before. This is a chance to start over. I plan to take it.

Honey, I’m home.

Photo by Visualist Images.

Aaron Brazell

The Greater Good: Entrepreneurship, Open Source, and a Better World

Last night, I was catching up with a friend who is as far from me in lifestyle outlook as you could possibly be. She is a extremely left wing type working for an environmental advocacy organization in DC. I, on the other hand, am an entrepreneur with one foot planted firmly on the right and one foot firmly planted on the left.

The conversation came to an issue that I’ve only marginally thought in great detail about. I had made the comment about how I am potentially looking to leave the DC area because, as I put it, it’s not my scene. I feel like a square peg trying to be fit into a round hole. While I certainly have political views and will sometimes voice them, my life does not revolve around politics, policy and advocacy as it does in Washington. In fact, when pressed to explain my feelings around why I dislike DC, I described myself as a regular guy wanting to live a regular life in a regular town.

Defining that more explicitly, I appreciate town like Baltimore, where I was raised and lived most of my life, because it’s filled with people who go about their normal everyday lives. No one is trying to “save the world” as seems to be the case in DC. Certainly, there are people and companies (hopefully many) who take a balanced position in life to be good stewards of the earth, energy and the planet. Certainly, many are socially conscious in how they live their lives. But it isn’t an all consuming agenda such that you find in DC.

I love Austin too. Why? Well, it is the self described live music capital of the country. On any given night, from my experience, it is not difficult to find bars that have a good live music set that is original and that doesn’t carry a cover charge. Outside of a handful of live music venues (DC9, 9:30 Club, Velvet Lounge, Madames Organ to a degree, Rock and Roll Hotel, etc) it’s hard to find a burgeoning music scene in DC.

Even with sports, which consumes a fair bit of my life, it’s hard to find supporters of the home team. No one, it seems, is from DC. They all came here with an agenda. You have to go out to Maryland or Virginia to find real hometown fans.

This is not my scene. This is not what I like. I am an entrepreneur because, first and foremost, I want to make money. When I made a break from my former corporate job, it was after becoming aware of how much my employer was billing our customer for my services and realizing that if that was how much I was worth, I could damn well do that on my own.

But that’s the crux. As entrepreneurs, our general purpose is not to do social good (though there are exceptions). Not that there is anything wrong with that. There isn’t. But entrepreneurs get our kicks from building something. From doing something. And of course, from making money. Who starts a company with the intention to not increase profit margins? You show me that entrepreneur, and I’ll show you an entrepreneur who will fail within a year.

There, of course, is a balance. Like Geoff, Beth and Kami are doing at Zoetica, there’s a balance between making money and doing good. The more I had this conversation with my friend, the more shallow I realized I sounded.

But as I thought some more, the more I realized that doing good is not something you do. It’s something you are. Based on the integrity and character of the entrepreneur, the decisions that are made, whether geared for profit or for building a product or spinning it up into an acquisition by Google, become decisions made out of the character and integrity of being “good”.

Frankly, the more I thought about it, the more I realized that even what I do as an entrepreneur creating services and products around WordPress, (and yes, even sometimes writing patches for WordPress core itself) is done to make the world a better place. Even writing a book on WordPress and travelling to San Francisco, Dallas, New York, Atlanta, Miami, Chicago and Raleigh speaking to WordPress users, developers and designers is done to extend the platform, thus extending the reach and improving on the largest self-hosted blogging platform on the planet.

Think about why this is important. It’s not just about WordPress. It’s about enabling voices. Giving those who never had a chance to speak before the opportunity to be heard. We’ve heard as recently as this week about the man who used an iPhone app to figure out how to treat his own wounds while buried under the rubble in Haiti.

The Chinese government is so threatened by web technologies, and blogging in particular, that they have banned WordPress.com in China.That is not likely to be lifted anytime soon, especially as the government lockdown and censorship of the Chinese people is thrust back into the limelight with the latest Google-China fallout.

Even the internationalization efforts in WordPress is putting WordPress into the hands of more people in more countries and making it possible for voices to be heard, not only in the United States, but in the Sudan and Kurdistan as well.

As an entrepreneur with integrity and character, even the mundane decisions that go into building a company can be seen as social good. This is not intended to diminish the efforts of those who explicitly set out to do social good, but with the right mindset, the things that make us successful can also make the world around us better.

Aaron Brazell

It's Not Necessarily Who You Know

In the world of social media, there has been a dramatic shift in how business ideas and implementations get done. David Armano touches on it today where he suggests that knowing the influencers will get you much farther in your effort.

In that case, it’s up to all of us to find them. Perhaps take a look at something like the Power 150 and start the list backwards (or maybe get out of the marketing echo chamber all together).  If you yourself have become the new breed of “gatekeeper”””ask yourself “is it who I know, or what they know?”. Ideally, its both””but up to us individually to strike the right balance.

Armano and I proceeded to have a lively discussion on Twitter over this idea. I agreed with his assessment  that the current landscape of the social web does cater to the idea of knowing people being more important than having a good idea. I disagreed on his conclusion that people should seek to extend their influence by knowing more of the top people on the web.

On principle, the “top people on the web” is a bit elitist and self serving. Both Armano and I enjoy being “top people on the web”, yet, I know my ability to scale is small compared to the ideas and conversations being pushed around. The web is bigger than me. It’s bigger than Armano. We both enjoy large networks of people that we know, and I don’t mean six degree of separation type stuff. We both can show you 10,000 or more collected business cards from over the years. At least I can. I presume it is the same for him.

I can brag about knowing over half of the Technorati Top 100 bloggers personally. I can point to the multitude of networking events that I attend (at least one major one every month) where I have a difficult time talking to everyone who wants to share their ideas and thoughts with me.

The problem is scale. The web is bigger than we are. You can put a gallon or five gallons or ten gallons of water in a sink, but if the drain is only an inch thick, you won’t be able to process more water out of that bin. You need a bigger drain to do that. In fact, it will take longer to drain that bin with increasingly more water. It’s physics.

Unlike Armano’s assessment that communicators, entrepreneurs, and brands should exploit the current landscape that values the personal connection over the business process (that is, good ideas can thrive on their own if they have merit), I see it as a hybrid. You must have a one-to-one network and you must have a one-to-many network, but your many-to-many network (the 2nd, 3rd, 4th, 5th and 6th degree of separation) becomes fairly useless fairly quick. Good ideas cannot thrive in a vacuum.  However, simply knowing influencers aren’t going to make it fly either.

I can’t tell you the number of people who are friends, not just business network contacts, who have talked to me with great gusto and passion about an idea and I simply look at them blankly. They know me personally, but realistically, they have a sucky idea. It’s not going to fly and no amount of knowing the right people is going to make it fly.

On the flip side, having a great idea and knowing the right people can make all the difference in the world. This is a reflection of the truth that many of the worlds greatest idea people don’t have the communication prowess to “sell” that idea and make it work. Likewise some of the greatest communicators in the world have great bullhorns, but suck at innovating themselves. So we end up in a world where we all need each other for something.

This blend of traditional (networking) and innovation is really where we need to be. We’re getting there, but we ain’t there yet. Reinforcing an unscalable paradigm of who you know as the primary enforcer of innovation is a dangerous trend that really does need to be changed. Sometime. Hopefully soon.

Update: Armano chimes in in comments and corrects the record. He is recommending a balance, as am I. Different slants on the same issue.

Venture Files

The Rules for Entrepreneurs

Venture Files founder and former curator, Steven Fisher, wrote a series last year that remains one of the best of its time. Even though he has moved on and is working with Network Solutions, I think it’s as important now (if not more so) than it was last year at this time. This is a consolidated (and updated) version of that series.

Pay Yourself First

Over the last 9 years and two startups I have learned many things and screwed up royally in some cases. This series is about providing you best practices of lessons learned and avoiding the mistakes I have already made.

In the past, I have had good years and bad years. When you have employees, they expect to be paid and when you mess with payroll (and payroll taxes, but that is a post for another time) you create such a negative culture that nothing will get done.

With that said, when you are starting your business regardless if it is a service or product company, you will have startup costs and probably forgo paying yourself for 6-12 months to keep growing the business. That is fine and to be expected. What you should not do (and what I did) is keep adding staff and sacrifice your own salary in the name of growth. If you keep going like that and have a bad quarter you will have nothing saved for a rainy day and if the business fails you will probably be in immense debt and got nothing out of the business.

Granted, the balance between growth and cash flow is a tenuous one but it is one thing you should never defer to someone else in beginning. Plus, there is a difference between creating a lifestyle business and an enterprise. A lifestyle business is really making enough money for yourself and having some contractors or 1-2 people that gives you a good salary but is more about freedom. An enterprise is a business that scales and gets big over time but you will be working intense amounts in the beginning but will need to hire those smarter than you with the intention that you are looking for an exit and will have time for freedom when you cash out.

So when you are growing the business you should work the first 6-12 months paying off the initial capital expenses and getting about 6 months of cashflow for yourself before you hire anyone else. Once you have that done, start paying yourself something, even if it is small and will ramp up over six months, pay yourself first. This will get you in the habit of being committed to making the business pay for itself and you so you are not worrying about living month to month and let you find some resources to help you deliver while you continue to sell and grow the business.

Once you are looking at hiring someone use these two rules as a starting basis:

– Have six months of payroll for that person in the bank on top of your salary

– Have 90 days of projects or sales committed for that person to deliver so they not only have something to do but are earning their keep.

You may have to be conservative at first in your growth but in the end you will scale better and create a business that is focused on delivery and customer service without putting you and your employees on a cash flow roller coaster.

Venture Files

Bubble, bubble, bubble – In Private Equity not Web 2.0 (Classic)

This is the first in an ongoing “Venture Files Classics” written by former Venture Files Editor Steven Fisher. The selections are chosen for historical reference as well as a notorious ability to be right. The original post from January 12 of 2007 can be found here

Being a serial entrepreneur I have been through many business cycles, but the Internet boom of the late 1990’s was an extremely heady time. People were so enamored with what the Internet could do, every one really believed that the old rules didn’t apply.

The reality was that those rules applied more than ever and with the crash in the early part of the century we have tried to learn our lesson.

With these new companies deemed Web 2.0, everyone is expecting another bubble. So many of the same types of companies have been funded so there are bound to be consolidation and just plain failure.

According to Michael Arrington, his entry “Bubble, Bubble, Bubble“, the despite the fact that some companies are failing, the sky is not falling.

In fact I would call this time around the ol’ startup track “saner, saner, saner”.

Despite many of these companies basing their success on being an aftermarket for Google, the smart ones I think many people know that you have to be in this to create a real enterprise and one that makes money. It is not so much about the VC’s but about the ability to use the low cost and barrier of entry to innovate.

But the Dead Pool is not cool

I think that the blog A VC gets it right his counter points on “Building It Up and Then Knocking It Down” are right. He says “over hyping young companies where people are working their butts off and then throwing them overboard quickly into a “dead pool” when they fail is not healthy.

I believe it is dead wrong to put this up there. It just feeds the fire for the chicken little’s of the world. Mike Arrington has known successes when he co-founded helped flip Achex and sold it to First data. I don’t know if he has experienced building a company from scratch and having it fail, many times from circumstances out of your control.

But there is a bubble developing and not where you think…..

The bubble is not with companies it is in the private equity market itself. The model of funding and the way people are evaluating companies is changing. The way investors look at companies is not based on a fast IPO but aligning it to be a sweet acquisition target.

This is helped in no small part since most VC’s invest like they are teenage girls. “Oooo, you invested in a video sharing site, I want one too! You put $5 million into social networking for eco-friendly baby boomers? Find me one so I can get one too!!

Here is how I got there:

  1. The amount of money chasing deals have lightening strike twice to find that repeat of unrepeatable past returns is growing rapidly
  2. The number of opportunities are declining and there are too many copycats plus the cheap money is pouring out to fund them.
  3. Not enough VC’s to serve on boards effectively and make the existing investments get to a proper exit
  4. IPO market is still not there and there is and there are only so many acquisition partners
  5. Higher prices of entry and lower returns

What I don’t know:

  1. When the IPO market might be friendly to tech stocks
  2. If investors will broaden their portfolio choices to get their money working in unique ways
  3. If funds might start giving their money back

Only time will tell if this comes to pass. If you have a good idea, the money is out there but might not be for very much longer.

Crystal Ball? 2-3 years or mid-2008 this is gonna come to a head. Only time will prove me right or wrong.

Editors Note: At the end of 2008, we do now know that the economy has imploded, not simply from web valuations. In fact, web valuations hardly played any part like they did in 1999-2000.

In fact, the web sector has seen much less damage, than the rest of the economy. In fact, there are still investments taking place, if devalued. A series investments for web companies typically range in the $1-2M range which in the larger picture is fairly small. Biotech companies, for instance, typically pull in around $20M for a Series A round.

That does not make the web sector immune, and in fact, Steve is correct in recognizing that there would be a bubble coming, and that it has arrived.

Aaron Brazell

Blueprint for Change: Technology

If I have not made it clear enough so far, this is why I have voted for Barack Obama. The internet industry is certainly affected by the economy, but it is one of the last sectors that still shows signs of growth and stability. During a down economy, it is important to capitalize in the sectors that have the ability to drive the rest of the economy out of the recession.

If America recommits itself to science and innovation, then we can lead the world to a new future of productivity and prosperity… it’s about constantly raising the bar so that we are more competitive.

Though individual writers of this site may have their own political views, it is the position of this publication to join the rest of the tech sector in recognizing that Obama has the stronger leadership in this area and will serve the most good for the industry. Technosailor.com has already endorsed Mr. Obama and re-emphasizes that endorsement today. Go vote tomorrow for the better option for this industry.

Aaron Brazell, Hall of Fame

Don’t Quit that Job Just Yet

Photo by Egan Show

The economy has everyone shaky, even those in the web space who have been largely unaffected, so far, by the ups and downs in the market. The Web market is largely filled by companies who have, at best, private equity via venture capital or angel funding, or they simply are bootstrapping and don’t have any outside investment.

Times are tight, but even in the VC-stage where a company might have anywhere between a million dollars in investment capital to $35M or more, the money really isn’t that big in the grand scheme of thing and the funding is privately held. Mostly.

Here in Baltimore, VC money flows toward Biotech companies where significantly higher investments are made in comparison to small investments in the web space. Obviously, biotech has a higher overhead when it comes to research facilities, labs, expensive chemicals and doctoral employees. Web startups deal with much smaller costs like commodity priced hardware, and much cheaper salaries. Again, by comparison. Biotech is drying up, but web investments continue to happen.

However, just in the last three days, at least three people I know in the web space have lost their jobs due to the slowing economy. We’ll probably see more of it as well. eBay, who is admittedly a public company and outside the realm of the “typical” web company, just announced a 10% reduction in their workforce. That’s not going to be the end.

The worst time to try to change jobs is right now. If you are able to get a great job, you’re going to be subject to a last in, first out layoff policy. It’s likely anyway. Nothing is ever guaranteed.

If you’re independent, you may very well encounter a slowdown in business (so I hope you’ve saved!), but you probably aren’t going to fire yourself. Now would not be the time to start that practice.

Conflicting recommendations exist. Some recommend that work is going to be hard to come by in an entrepreneurs world, so flee for stability and medical benefits. The other side says, as I do, that work is going to be hard to find and if you get it, you’re going to be far from stable.

Be very careful how you proceed. Make sure you have a backup plan. Try not to panic. Hunker down for the long-haul and do what you can. Don’t let the economy frighten you but instead, lean on your strengths and make money how you can. It’s going to be tough for everyone, myself included, but there will always be a demand for quality people in essential positions.

If you’re in a stable “day job”, I would not recommend quitting now to go the entrepreneurial route. It’s going to be tough going. However, if you’re already there, stay there and kick some butt. It will be slow. Times will get tough. But you can survive!

Venture Files

Technosailor Venture Files — Hello World!

It was a fateful moment when I learned Aaron was looking for an entrepreneurship blogger. Pumped up after a day-full of Podcamp/Searchcamp Philly — drinking from the yet another firehose — I made the promise to myself: it was time to share my 20+ years as an entrepreneur. Blog I must.

And lo! A light shone in the heavens. Okay, maybe it was just a tweet — but here before me was the springboard to blog stardom: love him or hate him, Aaron’s a social media playa . . . and it just made more sense to hitch my wagon to Technosailor than trying to build from scratch.

So what can you expect from me? Experiences — good and bad — in funding, growing, staffing, powering up. . . and winding down . . . startups. Thrill of victory and agony of defeat, all that. I’ll write about the DC startup scene (although my flying radius extends to New York, and occasionally Silicon Valley). And about events (like Podcamp) that I attend. And, as appropriate, I’ll relate some real-time experiences with my current [stealthy] startup, CHALLENJ (though I promised Aaron I wouldn’t shill).

And maybe the occasional rant — about the self-obsessed San Francisco startup scene (what — you’re missing TechCrunch 500″) . . . lawyers . . . and bloviating CEOs, VCs, and other tech ego-trippers lacking the humility gene.

My first co-founder used to say, “I’d rather be lucky than smart.” (Then, coming from a megalomaniac hell-bent on global domination, the words didn’t exactly ring true.) The point is, a heckuva lot of what we entrepreneurs have to confront is neither predictable nor under our control. Still, we prefer it this way.

My hope is that some pearls appear in forthcoming posts that will help you navigate the shoals of murky startup waters. (Warning: more metaphors ahead.)

Hello [brave new entrepreneurs’] World!

Aaron Brazell

Introducing Ray Capece

I want to take a moment to introduce Ray Capece, the new editor of Venture Files. The other day, I noted that Steve Fisher, who founded and really pushed Venture Files, has moved on to other things. Notably, he is one of the voices of Solutions are Power by Network Solutions.

Ray contacted me after my post the other day, and he has agreed to step in to the Venture Files editorial role. Ray comes to us with over 20 years of entrepreneurial experience having had multiple startups, some that have succeeded and others that have failed. His successes include an IPO and $30M in venture capital raised over the years. He has also gone through Chapter 11 bankruptcies and had other failures.

He is also an experienced journalist having worked for several years with Electronics magazine.

He is the perfect candidate for this job. Tomorrow morning, he will introduce himself here at Technosailor.com. Join me in welcoming him to the family.