oDesk’s Gary Swart Has Advice for Startups Everywhere Else

The Valley has done what the Valley is good at.

So said Sarah Lacy–native Memphian and founder of PandoDaily–during her Southland fireside chat with oDesk’s Gary Swart. This is great news for entrepreneurs everywhere else. While Valley companies have spent the last 30 years focused on tech, startups everywhere else think more about solving problems in every other industry. Families, healthcare, education, logistics, publishing. The list of industries ripe for disruption and innovation could go on. And, thanks to the tech created in Silicon Valley, those companies can build right where they are.

When asked if startups could legitimately stay out of the Valley, Swart encouraged entrepreneurs to take it slowly and really weigh the options. Depending on the company, moving to a tech hub could make sense. But, services like oDesk make it easier to hire workers from anywhere, and free tools like Skype and Google docs enhance collaboration. Gone are the days when people have to move across the country to work with one company. Now, according to Swart, “Work is not a place. Work is about finding the right people.”

And the perennial struggle to find investment outside Silicon Valley?

Paul Santinelli actually addressed that issue later in the day.

Stay put. Find great talent. Tackle a big problem. The money will follow.

Easier said than done, of course. Silicon Valley is a compact space, filled to the brim with entrepreneurs and capital. “Everywhere else,” on the other hand, is vast. It can be pretty difficult to find the best people, at just the right time, and an investor willing to take the risks associated with an early stage startup.

But, if–as Lacy says–the Valley is tech and millenial-focused and that market is saturated, there is huge opportunity out there. So, how do startups around the world make it happen?

Swart has some ideas:

Don’t ride the rollercoaster. Entrepreneurship is full of extreme highs and extreme lows, often both within a minute’s time. In order to keep focused, entrepreneurs should stay even-keeled throughout the process.
Ideas are great, but we all know ideas aren’t everything. Your big idea needs a big market and money, followed by great execution.
So, what if you have all these things, but nothing seems to happen? External validation is important. Every idea has some naysayers, but if literally NO ONE is interested in what you’re building, it probably won’t ever sell.
Always stretch yourself. Lacy said that early in her career, she purposely forced herself to “jump off cliffs” to keep herself uncomfortable. It’s the only way to keep your edge.
Start as narrow as you can. Pick one thing and become the best at that one thing. After establishing expertise, then you can branch out into one or two other areas.

Lacy and Swart weren’t encouraging delusions. They both talked about how hard it is to be an entrepreneur, and any founder outside Silicon Valley can list the ways it’s especially difficult. But, it seems the tide is turning. Ecosystems around the world are thriving, and more companies are tackling big problems. Throw in some of the irrational optimism we entrepreneurs are known for, and it might just be possible to build the company of your dreams after all.

Here’s more Southland coverage at nibletz.com

CentUp Comes to Nibletz, See What It Does

Have you ever read a great blog post and wished there was some way to show your support? Sure, you could leave a comment or tweet a link. That stuff’s great. But you know what content creators really need?

Cash. Just like the rest of us.

There’s been a slowly growing trend of micropayment companies in the last few years. The deal is that you, the reader, give a very small amount–even a few pennies–to your favorite bloggers or content companies when they create something you like. It’s another way of showing your gratitude and helping them stay in business. Win-win.

Now, though, Chicago company CentUp is upping the ante even more. Instead of transactions straight from consumer to content company, there’s a third party benefiting from your pennies: charities.

CentUp will take 10% of all donations, and the other 90% will be split evenly between 1 of 6 charities and the content provider. The charities include national nonprofits such as Love146 and The Fender Music Foundation. As the company grows, they plan to add more charities.

Nibletz is proud to be a CentUp publisher. Our button is right there at the top of each post. All you have to do is sign up with CentUp, then start clicking. Besides designating how much you want to give, you can also use the button to Tweet about your donation. It’s similar to a Facebook “like” button, but benefits a couple of great organizations.

For our part, we will use our portion to continue our Sneaker-Strapped Road Trip. This enables us to travel the country, get in the trenches with great startups, and talk to amazing investors. It’s also when we cover awesome events like SXSW and Southland, which starts tomorrow. In fact, the majority of our content (which we know you love!) comes from our Sneaker-Strapped Road Trip. Love Nibletz? Every little bit helps us continue to be the voice of startups everywhere else.

When It Comes to Communications, Startups Need the Whole Package

These days, you can start a company sitting in your pajamas with a laptop. Buoyed by cutting edge technology, the wisdom of crowds, and cloud computing, there are more startups than ever before. Separating the heroes from the hype can be quite the challenge for investors, so it’s important that entrepreneurs have a clear and attractive startup communications package from the get-go.

Pitch with Clarity and Authenticity

To get up and running, startups have to sell their sizzle before there’s any meat near the table. They must communicate their dreams and talk about how they’re ushering in the future. But they’ve got to be smart about selling those dreams to investors. For example, I recently received an automated email to consider investing in a startup called Crave. At first glance, it looked promising. The email contained praise from a successful male venture capitalist, and the CEO is a Stanford man.

Then, I found out what the company’s product was: vibrators. For women. So I had two men telling me how superior their vibrators were. I don’t think I need to break out the “mechanic who doesn’t drive a car” analogy here; Crave wasn’t going to pass the sniff test.

Ironically, if you dig a little deeper, you’ll find that Crave actually has a female co-founder who fits the bill of authentically leading product development. Crave could benefit from using her when pitching investors. Being clear from the start about what the product is, as well as having an authentic spokesperson, is much more sensible.

Show off the Good Stuff

When pitching investors, it’s crucial to highlight business components savvy investors will be looking for. It starts with having the right team members, front and center, to communicate your idea. Startups capable of enticing investors typically have these qualities:

A seasoned entrepreneurial team — This doesn’t mean all the execs must have salt-and-pepper hair, but not everyone should be fresh off campus. Your money, sales, and operations people need to be experienced.
The best execution — You don’t necessarily need a new idea, but a high-quality startup will have the best way to execute a solution to a big problem and be able to explain to investors why your way will be profitable.
Clear commitment — Your team’s personal passion should be visible, with everyone committed to your dream.
A solid exit strategy — A viable startup has smart ideas about who could eventually acquire it.

Eliminate Red Flags

The things that turn off investors are the same things that hurt startups in the long run. If your company exhibits any of these characteristics, you may have a problem convincing investors it’s the real deal.

Part-timers — There are exceptions, but if an entrepreneur is working part-time for her dream and part-time for “The Man,” she probably doesn’t believe in it as much as she wants an investor to. If you’re not ready to take the leap as a full-time entrepreneur, you’re probably not ready to take your idea to investors.
Family on the team — There are some killer family combos out there, but more often than not, family members are hired out of convenience and not because of any super skills they possess. If your business partner is family, make sure there’s a compelling attribute she brings to the team, and be able to sell that to investors.
Perceptible lack of process — Anything can look slick and stunning with today’s racy design platforms. But is anything actually getting done? With the rapid pace of the tech world, delays tell investors your company isn’t serious about breaking into the space.
No dream — Elon Musk. Richard Branson. Steve Jobs. These are entrepreneurs whose names are synonymous with “dreams.” It’s not just a matter of having passion for your business — it’s being able to communicate your dream to investors and make your excitement contagious.

Have the Right Answers

So, what questions should you be prepared to answer to show investors your startup is worthwhile? These three help expose a startup’s entrepreneurial DNA:

If you were going to be acquired today, who should acquire you, for how much, and why? Your answer must be thoughtful, with a clear plan for execution.
What’s the biggest problem with executing your dream? You can — and should — admit that you wrestle with this question on a daily basis.
Why does the world need you? The perfect answer here should not include a financial spreadsheet.

Show the Startup’s Full Potential

Being passionate about dreams is vital, but for a startup to be taken seriously, it also needs to be functional. You must show confidence in these practical aspects of your startup when pitching to investors:

The Technical — Does your startup have capable, mature technology that’s easy to execute?
The Financial — Can your business be scaled from the running start investors might give you? Do you need $1 million, or several million, to get significant scale?
The Managerial — Are the right leaders in place? Will they help optimize and scale your technology?

The Basic Communications Toolkit

Additionally, a basic communications toolkit gives startups a strong foundation to draw in investors. Pack your toolkit with these tips:

Maintain a website with a compelling story that encapsulates your voice and vision.
Create an engaging tagline for your elevator pitch. Think Kabbage’s “Easy cash for online sellers.”
Memorize the key components of your pitch deck, from market size to customers of note.
Be able to give detailed financials upon requested.
Utilize websites like AngelList and LinkedIn to build your online presence and spread your mission.

At the end of the day, daring visions capture investors’ attention, and substance convinces them. If a communications package shows passion on the outside and holds up to the logistics within, investors will be confident of getting a substantial return, which equals success for the startup.

Because this article was published, a donation will be made to Reading Is Fundamental so a book can be given to a child.

Lisa Calhoun is the CEO of Write2Market, an industry leadership consultancy that changes the world by helping tech and energy companies gain the reputations they deserve. Write2Market helps its clients scale by nabbing headlines, speaking engagements, and key business development opportunities, all with an eye on creating the best possible exit for the founding and investment team. Connect with Lisa on Twitter or LinkedIn or at her personal blog.

Startup Life: Andy Smith of DailyBurn

Andy Smith, Founder and CEO of DailyBurn

As a relative newcomer to the tech startup scene, one thing that fascinates me is the daily life of founders. The early stages of a company are so intense, and the pressure only grows with the companies. How do founders do it?

So, I’m on a quest. I want to talk to as many founders as possible and figure out how they make this startup life work.

I hear a lot about how easy it is for founders’ health to deteriorate. Late nights, skipped meals, and the midnight beer to relax. They all add up–with a big dose of stress mixed in–and it’s not hard to see why.

That made my first interview especially interesting. Andy Smith co-founded DailyBurn (then called Gyminee) in 2007. The company was part of TechStars Boulder in 2008, and in 2010 IAC acquired the majority share. Because of the reputation startup life has for bad health, I was interested to see what a health and fitness founder did to stay healthy in the process.

Q. What does your typical day look like?

AS: I’m normally in the office by about 9AM. Most people here at DailyBurn work “New York Tech” company hours (10-7), but I like to get home by 6:30 so I can spend time with my 3 kids. These days I’m in more meetings than I used to be, as I’m trying to build out my core executive team. We are at the stage in our company growth now where we can’t keep it flat – so I’m spending more time with my direct reports and getting that setup.

One thing that is scheduled in to my day each day is TRAINING. It’s important to be in good shape if you are the leader of any company, but even more so if you lead a fitness company. I either join our company workouts at 5pm (eat your own dog food) or train at the nearby gym. A couple of us are getting ready for another Toughmudder race so I’m pretty strict with food and training right now.

Q. How is it different than in the early days of DailyBurn?

AS: Well, in the EARLY early days of DailyBurn there were two of us, and we both were coding full-time. That stopped on our second round of funding, when I became full-time business side of things. I do miss the coding sometimes, but running a business has other interesting problems to solve.

I’m also learning how to navigate running a small growing business in a larger parent company – and that is bringing a lot of new challenges. One of the biggest changes is not making all the decisions and learning to let others make decisions even when you don’t always agree with them. It’s a necessary step in our growth because if I don’t give away some control, I become a huge bottleneck in the growth of the business. Loosening that control is emotionally hard, because I have a pride/control idol that always shows its ugly head. However, I’m seeing the benefits already and I’m excited of how it will free me up to focus on the area of business that needs the most attention – all while other parts of the business are continuing to grow and move without my direct focus.

Q. Obviously, DailyBurn is all about health and fitness. What tips do you have for founders to keep themselves healthy during the hectic days of starting a company?

AS: When you are super busy with startup life – it is easy to eat poorly and skip exercises. It can move to the back burner. However, it is in those times when eating right and working out give you the most benefit. If you eat clean 90% of the time, and train 3-5 times a week you are going to perform better at your job.

My second tip would be to try to set a culture of fitness in your startup. Working out together can be a great bonding experience. We also try to do athletic events together (Toughmudder is a great example).

Q. I love the DailyBurn videos, but they are HARD! Do you ever use them yourself?

AS: Of course! And, I’m the one to blame if they are too hard! My favorite workouts on DailyBurn are in the Tactical Bodyweight Training (TBT) series and the INFERNO series. I’m particularly fond of INFERNO because I was in the test group to make sure the workouts are hard enough!

But – the great thing about DailyBurn is that there are workouts for everyone. If you like to dance, we have MOVE. If yoga is your thing we have world-class yoga videos. We have kettle bells, abs, MMA, short workouts, long workouts – you name it. That’s the beauty of our platform – there is something for everyone and you know it’s going to be great quality.

Q. Any other general advice for early-stage founders?

AS: I’m a big fan of startup accelerators like TechStars. They really do work to accelerate your business (advice, connections, fundraising, strategy), and I encourage most first-time entrepreneurs to try to get into a program like TechStars.

A lot of the advice I give to young companies is depending on what they are going through, but one of my biggest things is to share your idea with a lot of people. Many early entrepreneurs think that their idea is so valuable that they keep it close hold. In reality, execution is key and the advice you get will outweigh the value of being in stealth mode (most of the time! – I say this even as I have a small project in stealth!).

I couldn’t convince Andy to share that stealth project, but if it’s as great as DailyBurn, it will be great to watch.

Monica Selby is a writer and editor living in Memphis, TN. When she’s not chasing her three boys, she writes about women, work, and startups.