Michael Abbott On The Fine Art Of Firing

This is part 2 of a 3 part series on hiring and firing wisdom gleaned from Michael Abbott. Find part 1 here.

Firing people is one of the most difficult things that an employer has to do. You are dealing with real human beings who have families and lives that are going to be affected by the decision that you make. However, it is an unavoidable part of building a successful business and maintaining a team of top quality employees who operate with skill and efficiency.

A small group of up and coming industry directors recently had the pleasure of attending a fireside chat with Michael Abbott, an expert on enterprise infrastructure. Abbott is well known for scaling Twitter’s engineering talent team by a factor of five, to over 200 engineers in two years’ time. They discussed a variety of topics, including some of the pitfalls that can beset companies when it comes time to clean house.

One of the most interesting points that came up was how difficult it is to get rid of employees who are almost good enough to keep their job. If someone never shows up or does generally lousy work then it’s a lot easier to let them go, because the reasons are obvious. The quandary lies in firing people who are doing alright, but aren’t excelling.

The problem that many companies have is that they hold on to employees who are doing moderately well, tying up positions that could be held by super stars. This can be due to a sense of loyalty, or a fear of being unable to replace talent, but it leads to the creation of a B team that can’t work with the kind of efficiency that a company needs to succeed.

The consensus that the group came to is that the process of firing can be just as important as the process of hiring. Of course, these are real people, and you can’t help but have empathy for these team members. However, if they aren’t reaching their full potential in the position then your company and the employee will never reach its full potential, and nobody is doing anyone a service there.

Alaina Percival is Head of Developer Outreach for Riviera Partners, a leading technical recruiting firm in Silicon Valley.

The “Must-Attend Conference for Entrepreneurs” Everywhere Else Tennessee is headed back to Memphis this Spring. We’re releasing the first 50 tickets for 50% off exclusively to our newsletter subscribers on Jan 13th. Don’t miss your shot by signing up here!

Your Year-End Startup Accounting Checklist

accounting-checklist

As we find ourselves hurtling towards the end of the year, there are a number of things you should be staying on top of in order to best manage your company finances and position your startup for greater success in the new year.

Your year-end thought process should take into consideration the following:

Payroll. Make sure that you’re filing all of your forms and making payments. It’s important to make sure you’re in good shape to get your employees their W2 forms on time. Also take into account accrued bonuses or special gifts on the books that may not be paid until next year.
AR collections. You want to be able to close out all outstanding receivables before year-end so do what you can to collect on unpaid bills. Improving your collection process and expediting payments will help you to maintain better control over your cash flow.
GAAP compliance. If your financials are not already GAAP compliant — that is, in line with generally accepted accounting principles — then now is the time to move in that direction. If seeking a funding round or selling your business is on the horizon, you’ll need clean books to satisfy investors and/or acquiring companies.
1099s. It’s best to stay on top of the 1099 process throughout the year. After all, employees are going to claim income whether you get them a 1099 or not, so you might as well save yourself the hassle and get it to them. You should collect W9s along the way, as you go. It’s easier that way rather than waiting until the end of the year to figure out who you need to file for and trying to chase them down before the year’s end. If you find yourself behind the eight ball in terms of 1099s, keep in mind the due dates for filing: 1099s to recipients on or before 1/31/2014 and to IRS on or before 2/28 (or 3/31 if you’re filing electronically).
Reconcile transactions and cash checks. Reissue checks as needed and void as needed. You want to make sure that all of the transactions in your register are reconciled so that you have a clean tax return.
Income tax planning. Now’s the time to start identifying your tax needs, thinking about potential tax savings, and engaging with your tax professional who will help identify ways to minimize your taxes.Starting your estimates now will save you from unwelcome surprises come tax time.
Valuations. End-of-the-year isn’t necessarily the best time for you to get a valuation. If it’s been less than 12 months since your last one and you haven’t had any events to trigger needing a new one, then you can take this off of your to do list. But keep in mind that a 409a valuation refresh is required annually. You’ll also need a valuation if you are trying to value the common stock of your company, planning to issue stock options, have raised a new round of funding, had a material event, or are looking to sell IP from your company to another.
Assess internal controls. Check to see that you have internal controls in place, and that they are working properly. Keep your eyes peeled for weak spots where the potential for fraud or errors runs high.
Cut expenses. Examine your business processes to see if and where you can find any opportunities to cut expenses for savings in the new year.
Big picture thinking. As you reflect back over the past year, it’s nice to take a moment to dig yourself out from under the minutiae of running a business and think big picture. Refine your vision. Map out your next milestones. What have you been doing well? Where does your company need work? Is it time to pivot?

The end of the year is a great time to reflect, to informally audit your startup, and to make plans for next year, which include financial forecasts and budgets. Checking off all of the items on this list will help you to start the new year with clean financials and a good reading on where your company is currently and where it’s heading.

This post originally appeared on the author’s blog.

David Ehrenberg is the founder and CEO of Early Growth Financial Services, an outsourced financial services firm that provides early-stage companies with three platforms of financial support: day-to-day transactional accounting, CFO service, and tax and valuation compliance. He’s a financial expert and startup mentor whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

5 Commitments To Make In 2014 Instead Of Resolutions

For business owners, every new year is an opportunity to change. But how many of us actually keep our resolutions when the daily grind catches up to us? This year, I suggest you dump those resolutions — and make commitments to yourself instead.

I read a great article about commitments by Chris Freyteg. My favorite line was, “A resolution may be the act of resolving or deciding on a course of action, but a commitment can be far stronger, because it’s a specific pledge, promise or obligation.” The bottom line: Keep it simple and you’ll actually be able to add it your busy daily life.

Below are my top 5 commitments to myself and my business this year. What will yours be?

Be and stay healthy. Let’s face it — there is only one you and you are needed. Eat clean, exercise often and get plenty of rest. Try to pack healthy snacks and lunches for your busy day. I bring a protein shake along with bananas and carrots to munch on throughout the work day. Make time in your schedule to get out on a run or even a walk during a break from work. Just a 30-minute walk can help relieve stress and tension. After all, a one-hour workout is only 4 percent of our day. In business, we are walking billboards for our company. It’s important that we look and feel good.
Put it on the calendar. Start using a calendar to pencil in your daily, weekly and monthly schedule. Make sure to add personal time as well, including exercise (see: number 1), to your daily regimen. By putting it on the calendar, it is more likely to get done. And prioritize your work day the night before.
Stop worrying. You can only control you — the way you think and act. Be the best person you can be, and forget about what others think and do. Don’t sweat the small stuff. We spend too much time worrying over small issues or other’s people issues that it takes away from time we could have spent on ourselves and on our companies. So your business partner took credit for your idea. Is it really the end of the world? No, it’s not. In the full picture, it matters that the work was accomplished, not whose idea it was. I always ask myself, “In a month, will I remember this? In a year, will I be thinking about this very moment?” It’s fascinating how many times the answer is no.
Connect. Connect. Connect. Make time to network — and I don’t mean social-on-the-computer networking. Nothing beats live face-to-face interaction. It’s important to build long lasting relationships; relationships are the bread and butter of success. The more people you connect with, the more opportunities you have. Start by attending chamber mixers and events — there is an event for everything. You can find events through Meetup.com or through your local chamber of commerce. Ask local business professionals where they go to network and join them.
Continue to grow. Why not stay away from the TV this year and substitute it with a book? We are fortunate to have the luxury of reading books from self-made millionaires and entrepreneurs we admire. They are giving us their tools and resources so we can accomplish what we want. Get started by working on yourself — only YOU can make yourself successful. By learning more about your industry and business skills, you become an expert and continue to grow with new ideas and solutions. You also have more knowledge to use for conversation between clients and diverse people you meet. Growth and development are instrumental to one’s success.

Put in the work — make the commitment — and it will pay, trust me. Don’t be afraid to start with baby steps, either. I have found that true excellence is achieved by doing many, many small things extremely well (and I’m not the first to observe that!). Be a person who does what you say you are going to do. Make a year-round commitment to your health, your relationships, your growth and being a better you — and business success will follow.

Nicole Smartt is the Vice President and co-owner of Star Staffing. She was awarded the Forty Under 40 award, recognizing business leaders under the age of 40. In addition, Nicole co-founded the Petaluma Young Professionals Network, an organization dedicated to helping young professionals strive in the business world. Nicole can be found on twitter; @StaffingqueenN.

Brad Feld Talks About His Rise To The Top

Eric Strait, Tech Hustlers

So who is Brad Feld? Well, if you are in the startup community and don’t know who he is, then I forgive you for living under a rock…it must be awfully dark under there.

Okay, take a breath…because he has been to the mountaintop and back! So before Brad became a startup entrepreneur and an investor rock star, he was an executive at AmeriData Technologies after it acquired Feld Technologies. Feld Technologies was a firm he founded in 1987, that specialized in custom software applications.

Since then, Brad has been a renowned early stage investor and entrepreneur for over 20 years now. Brad is one of the Co-Founders and Managing Directors of the Foundry Group and Mobius Venture Capital. Prior to that, he founded Intensity Ventures, a company that helped launch and operate software companies and later became a venture affiliate of the predecessor to Mobius Venture Capital. (Crunchbase) He is also the co-founder of TechStars, an accomplished world-renown author and blogger, and an avid marathon runner that has completed 22 marathons as part of his mission to run a marathon in each of the 50 states.

So there you have it, the nuts and bolts of the career of Brad Feld.

My interview with Brad Feld is one of my favorites to date. Why? Because as one of the leading startup investors in the world, he could have been the biggest douche bag ever, and he is simply one awesome guy. To me the highest compliment you can receive as a person, is to be one who is approachable, friendly, and kind. I mean not many people can say that they would be like Brad is and was with me, achieving the success he has. I know people who are broke, and act like they are God’s gift to earth, and act like the biggest douche bag you have ever seen. You have to realize, Brad does not need publicity! He not only accepted to do an interview with me, but he did it happily! So next time you choose to be a jerk, reconsider and help grow the startup community by supporting fellow entrepreneurs whose aim is to help others succeed!

Okay, sorry about that but I always have to give props where props are due!

So why don’t you sit back and listen to the podcast and hear the often unknown and hidden life of the great Brad Feld.

Click here to listen to the podcast

Hiring Wisdom From Kleiner Perkins’ Michael Abbott

*Editor’s Note: This is part 1 of a 3 part series on a recent fireside chat with former Twitter head of engineering and current Kleiner Perkins partner Michael Abbott.

Finding and hiring the right people is fundamental to the success of a business. Your employees are the lifeblood of your organization, and their abilities and dispositions are going to shape the way your company lives and grows. The challenge is sifting through the vast sea of talent in order to identify the right person for each position. This can involve a complicated set of value judgments that are not always easy to make.

Riviera Partners recently invited a group of up and coming industry directors to an intimate fireside chat with Michael Abbott about this very subject. Abbott is an expert on rapidly scaling teams for high tech ventures, who was able to take Twitter from just 45 engineers up to 200 in two years’ time. He has a lot of wisdom to share about the hiring process and advice for maintaining a high bar of excellence when forced to deal with rapid growth.

A key takeaway from the talk was that consistency is key. Standardizing the interview process allows you to accurately compare and evaluate the candidate. This might mean having a training program, or guidelines that the people conducting the interviews can follow. A consistent process ensures that the information you are using to evaluate a candidate is scalable, allowing you to make faster and better hiring decisions.

Abbott also discussed how important it is to understand your own career goals when considering a career opportunity. Some people are going to be happier, and more efficient at managing large teams. Others are just better suited to handling smaller, more personal groups. It’s all about finding your niche rather than comparing yourself to others in the field.

It was an enlightening conversation that brought up a lot of questions about the challenges that companies face when dealing with rapid growth and team scaling.

It’s important to get the right people in, but at the same time you have to understand that you will make mistakes along the way. A consistent process undertaken by trained interviewers will help to cut down on these mistakes, and ensure that your company grows the right way.

Alaina Percival is the Head of Developer Outreach for Riviera Partners, a leading technical recruiting firm in Silicon Valley.

The “Must-Attend Conference for Entrepreneurs” Everywhere Else Tennessee is headed back to Memphis this Spring. We’re releasing the first 50 tickets for 50% off exclusively to our newsletter subscribers on Jan 13th. Don’t miss your shot by signing up here!

5 Ways To Develop A Strong CEO Brand

CEOs with strong reputations and the know-how to promote their accomplishments (that is, CEOs with strong brands) have a significant advantage over their competitors. Having a powerful CEO brand can put your company in front of its target audience in a way that the corporation alone cannot.

Why? Simple: Businesses don’t do speaking engagements, businesses rarely “emotionally connect” with audiences, and outside of CNBC/Fox Business News, they are rarely profiled on TV. And when media is looking for a great business-related story, they often focus on how the CEO/founder built the business or how a new CEO reshaped it — because people love human interest stories. They want to emotionally connect with your company. Hearing your vision gives them an affinity for your product.

As a result, brand loyalty to a product can be trumped by brand loyalty to a CEO. For example, I’m a U.S. Airways frequent flyer. I get upgrades almost every time I fly. But because I’m such a huge fan of Richard Branson, and Virgin now has flights available out of Philadelphia, I’m planning to use them next time I fly cross-country. Remove Branson from the equation, I’d have no interest in Virgin.

Similarly, I recently had a client who had developed a business service focused specifically on assessing new product development at corporations. As a result of the traction he got with his book and his reputation as a speaker, he gave a paid keynote to one of the largest corporations in the world. Executives listened to him intently, and the next day several met with him to learn more. He also won the Governor’s award in his state for best small business.

But none of that would be possible without a strong CEO brand. So how do you do it?

Develop a CEO brand strategy. This includes analyzing your brand strengths and aligning them with the corporation’s. In other words, emphasize the portions of the CEO brand that also ring true for the company.
Determine which audiences you want to go after and what message will connect with them the most. This differs from a corporate strategy because you are looking at a more indirect message to get people to resonate with the CEO. The CEO serves as the bridge so that the customer will gain interest in the business.
Determine the tools you will use to get the message out. Will it be speaking? PR? Social media? A book? Strategic advertising with the CEO message?
Determine how to measure your results. What benchmarks are you looking for? Increased leads? More website traffic? Determine the metrics that make the most sense for you.
Assess the results. Analyze your results utilizing the metrics you’ve developed plus some bottom-line items such as revenue growth, close rates, and increased pricing. Adjust your strategy from there.

Start utilizing these techniques now, and soon you’ll have a CEO advantage that will last the rest of your career. The best thing about a CEO brand is that, when done well, it is portable — as you think about starting future ventures, your CEO brand will follow you.

As the greatest success expert of the past 100 years, Napoleon Hill, said in his famous book The Laws of Success, “People buy personalities as much as merchandise, and it is a question if they are not influenced more by the personalities with which they come in contact than they are by the merchandise.”

Seventy-five years later, these words have never rung more true.

Raoul Davis specializes in helping CEOs increase their visibility, revenues, and industry leadership status through a proprietary CEO branding model. He is a partner at Ascendant Group (www.ascendantstrategy.net) a proven top line revenue growth strategy firm through utilizing the power of CEO branding. Ascendant integrates brand strategy, PR, speaking engagements, book deals, social media and strategic networking to accelerate visibility.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

5 Obvious (But Overlooked) Ways To Deliver Great Customer Service

Craig Baldwin, Sqrl

Just Doing Your Job

Glad that’s out of the way.

Good, great, even amazing client service is not black and white. Above average client service results from a willingness and interest that each accountant or professional has in their client’s well-being, experience, and results. According to the American Express 2012 Customer Service Barometer 66% of clients are willing to spend more with a business they believe is delivering excellent client service. The same report indicates 48% of people tell others about good client service all the time. 57% always tell their friends about poor service. If you mess up, word will travel fast. Just thank the world of social media for that one.

Professionals who deliver client service make their living on that one thing. And just like customer service, brands and businesses thrive when service of all kinds is more connected and personal. Delivering good client service is all about going beyond, adding just a little bit extra each and every time. Here’s 5 tips on delivering good client service from our team:

1. Send a surprise to each new client

First impressions are huge. At our accounting firm, we used to send cupcakes to every new client. But choose anything that’d be a nice surprise to your client. Last week we received bow-ties from a new contact. Bow-ties!

2. Be proactive on potential issues

It’s one of the most painful things to do when serving clients, but letting them be aware of issues or potential issues as soon as possible is always the way to go. It shows integrity, honesty, and how much you care about the success of their company or project. Just like ripping off band-aids, count to 3 and rip off at 2!

3. When problems arise, make it an opportunity

The first action at any restaurant when you have an underwhelming experience is to have an item removed from the bill. Perfect! But it’s almost commonplace these days, so in order to really get your attention the server would have to one-up a free appetizer. While breakdowns can be scary, and sometime results in a loss of client, they can also be a total game-changer for the relationship if you give it your best shot.

4. Be personal

Handwritten notes, family conversations, and beers with clients is always an impactful experience. Take away the work at-hand and you have two people who have to deal with each other socially. You can’t make friends with every client, and some won’t want to, but it always makes the relationship that much better.

5. Set expectations upfront

So many issues begin with miscommunication, which can typically be avoided by setting engagement or project expectations upfront. Because life is always easier when everyone is on the same page.

Craig Baldwin loves delicious BBQ and cool tech.

A version of this post was originally posted on the Sqrl blog.

Follow All Your Anticipated Releases With Hypebadger

Don’t you hate it when you miss the release of a new movie or game you were really excited about? There are so many new things popping up every day that it’s hard to keep up.

That’s what the new website Hypebadger is for. Just tell the site what release you want to follow, and you’ll receive an alert on the release date. Easy as that.

Hypebadger is interesting for 2 reasons. First, the team is the definition of “distributed,” with an entire ocean separating certain members. Second, while the idea has some merit for individual users, it could be a boon for independent artists, filmmakers, and musicians. Hypebadger will remind fans of when their favorites are releasing new products, helping those artists actually make money.

Hypebadger is very young, still testing out their MVP. But, if you’re an early adopter, they would love to hear your feedback as they build out the next phase.

Check out our Q&A with Brad Rach:

What does your company do?
Hypebadger is a website designed to allow users to follow and receive updates on unreleased products that they’re interested in. For example, if you hear about a new movie that you’re interested in, but you’re not a huge movie-goer you might forget about it and miss it in theaters. With Hypebadger, you go to the site, ask to be “Badgered” by the movie, and when it is released you receive a notification telling you that it came out.

Who are the founders, and what are their backgrounds?
The founder of the project is Chris Horsnell. Chris is a developer based out of Milton Keynes (outside of London, England) Chris built the MVP prototype over a summer and then brought on myself and two other founders. David Bannister is our User Experience optimization expert and is based out of London England. Chloe Bromfield is the project’s designer and is from Northampton. I’ve taken on the role of Marketing and Business Operations, and I’m a Project Manager from Ottawa Ontario.

What’s the story behind your idea?
HypeBadger was dreamed up when Chris was following the release of a mobile game (Star Command). He constantly checked for updates on the game: images, videos, and eventually its release. Chris was dedicated enough to do this, because he was very interested in the game, but all the while he kept thinking that it would be nice to just wake up one morning and be reminded that the game was coming out.

So Chris started building HypeBader on March 22nd, 2013. Over that weekend, Chris would put the kids to bed and work all night on his product. By the end of the weekend he had built the bones of what would become Hypebadger. He spent the summer refining the product and building out the founding team.

Where are you based?
Hypebadger is a nice example of a global team. I work out of Ottawa, Ontario; and have never even traveled outside of North America. Chris is located in Milton Keynes, a town near London.

What’s the startup scene like where you are based?
In Ottawa, the scene is very heavily focused on tech and small bootstrapped startups. On the other side of the equation, Milton Keynes is not a large city, and has a fairly small startup community. However its proximity to London certainly helps with becoming involved in that community. Hypebadger is not a project defined by the physical boundaries of the location. Because its a purely digital service, the team resonates more with the startup scene online, on sites like CoFounders Lab or Reddit.

What problem do you solve?
Hypebadger solves two problems. The first, with the most broad appeal, is the issue that countless people have where they lose track of upcoming movies, albums, games, events, etc. With HypeBadger they don’t have to face this issue anymore, as soon as they’re interested in an announced release, users can go onto the website and follow the item for the future.

The second problem that Hypebadger solves is that many independent developers, filmmakers, musicians, or entrepreneurs don’t have an easy way of keeping the interest of fans. They often get a short window of interest, but lack the marketing budgets to announce their releases. Hypebadger will be a game changer for them, since they can ensure that interested fans receive a direct notification as soon as they launch.

Why now?
With the popularization of Kickstarter, more and more independent companies have begun producing their products. The market is becoming very saturated, there are countless sources for news, and its easy to lose track of things in information overload. Hypebadger is needed now more than ever, to help users keep track of the products that they’re interested in.

What are some of the milestones your startup has already reached?
Hypebager has already finished building a minimum viable product (MVP) to test the concept. We have also exceeded 250 users.

What are your next milestones?
Hypebadger is hoping to hit our 1000 user mark within the month. Our next major development milestone will be to complete an Android application.

Where can people find out more? Any social media links you want to share?
Website: http://www.hypebadger.com/
Twitter: https://twitter.com/hypebadger
Facebook: https://www.facebook.com/HypeBadger
Google+: https://plus.google.com/103391743539144654189/posts

Toronto-Based Slyce Raises $6 Million To Help You Shop

Does this ever happen to you:

You see someone with something you’d like to own, but when you get online to search for it, you can’t quite articulate what it was?

With the new Slyce platform, you can just snap a picture of the item and find out where to purchase it. In a lot of cases, you’ll also be able to buy it right away.

While this sounds cool from a consumer standpoint, think about what this could mean for retailers. Suddenly, shoppers can find you more easily than ever before, right when they are in the mood to buy what you’re selling. For the niche, unique retailers, a platform like Slyce could mean a huge boost in business.

We’ve talked about the Big Instincts Group before. If even one of their most recent bets pan out, they’ll definitely be a company to watch.

Our Q&A with the Slyce team is below:

What does your company do?

Slyce is a visual search platform that allows Users to instantly purchase items in the real world simply by taking a picture with their smartphone.

Slyce will exist as both an independent consumer application, and a white label solution which can be integrated with existing retailer technologies. Using advanced visual recognition on smartphones as well as through a desktop application, Slyce is enabling retailers to be there at a consumers exact point of interest and ultimately changing the way retailers and consumers search and purchase items.

Who are the founders, and what are their backgrounds?

Cameron Chell and Erika Racicot are Co-founders of Slyce and are also co-founders of venture-creation firm, Business Instincts Group . The pair have been working together for over 5 years. Cameron is considered one of the original founders of the Application Service Provider industry, and founded the original cloud computing company, FutureLink. Erika is the operational driver at Slyce and has a background in operations and marketing, working in industries ranging from technology to hospitality to politics.

Where are you based?

Slyce’s headquarters is located in Toronto, but they also have offices in Minneapolis and Calgary.

What’s the startup scene like where you are based?

The Toronto startup scene is arguably the largest in Canada. There is a strong, supportive community with incubators, accelerators, events, meetups and genuinely smart and innovative people. There are a numerous great startups which call Toronto home, and we’re excited to be involved in that community.

What problem do you solve?

For any consumer who has seen something they love and then struggled to clearly articulate that item in a search query, Slyce visual product search is the multi-dimensional and intuitive answer to their prayers. For retailers, the Slyce image recognition technology can be adapted in innumerable ways to facilitate all kinds of innovative functionality. For the first time, Slyce enables retailers to engage and transact with consumers at their very point of interest.

Why now?

Smartphones are becoming our most trusted and adored possession and taking pictures with them, part of our daily life. Approximately 350 million photographs are uploaded just to Facebook every day! People take pictures of items they want, or clothes they like, and with the Slyce platform we help them discover where exactly they can purchase that item and enable them to do so almost instantaneously. The way the offering is structured means Slyce competes both in the visual search arena, and the social shopping sector. With mobile shopping accounting for 39% of all online traffic during this holiday season, there is a clear opportunity to get deeply involved and grow the shopping experience.

What are some of the milestones your startup has already reached?

Over the past 12 months Slyce has raised just over $6 Million in financing and just last week announced the acquisition of another visual search tech startup, Hovr.it.

What are your next milestones?

Upcoming milestones will be in customer acquisition and product development. We will be closing another round of financing early in 2014 and are currently looking to expand our Toronto team in order to scale quickly and effectively.

8 Simple Things Your Joint Venture Agreement Should Include

Combining forces to create a joint venture (JV) is nothing new, but the real trick is to do so in such a way that protects each venturer so that both parties are free to put their best creative foot forward. I’m talking “Captain Planet” levels of teamwork that can only come when all parties feel that they’re in a safe space to build an empire.

Just three little words are required to make your wildest joint venture dreams come true: joint venture agreement. Sounds dry. Sounds complicated. But they are absolutely necessary. By outlining each partner’s expectations, not only are both of your businesses protected, but the relationship between the people teaming up is protected, too. No passive aggressive emails or fighting over customer lists and trademarks — or worse.

Every agreement varies depending on the specifics, but when I joined forces with Ashley Ambirge of The TMFProjectto create a comprehensive legal resource for entrepreneurs called Small Business Bodyguard, we made sure to cover the absolute must-haves. Here are some of the key items we included that you can use as a jumping-off point to craft your own agreement:

Simply stated, what will each party be contributing to the joint venture? It’s vital to know if the work will be split 50/50, who’s bringing what to the table, and what you can expect from the other person or company. Laying this out in your joint venture agreement in detail will ensure that you and your partner’s expectations are aligned.
Who is responsible for the operations of the venture? The day-to-day stuff like managing the mailing list, handling customer service, doling out affiliate payments and keeping track of the overall finances of the project are essential to the project’s success. These duties can pile up, and if you don’t know who’s going to be taking care of them, they can either fall by the wayside or one party can end up resenting the other for the amount of work involved. So figure out how operations will be handled and compensated ahead of time and build it into the agreement.
What is the term of the arrangement? Is there an end date? Deadlines are always important, but especially in joint ventures. Each party is likely running an entirely other business, so it’s important to have milestones specified throughout the project to keep everyone on track. Deadlines and end dates not only keep the project on track, but also allow each party to plan their other endeavors accordingly.
Who owns what? Does each party own equal shares of the resulting products, or will the percentages vary? This ties in to the work contribution bit but another consideration is which party has access to a big audience of potential customers. If one person does 80 percent of the work, you need to decide if they’re going to own 80 percent of the product, or if some other measurement is appropriate.
How can branding, intellectual property, and the products/services created in the joint venture be used by each party outside of the joint venture? (As in, can one of you take the product you both helped to create and sell it in a new market by yourself?) Knowing how the intellectual property and other assets created in the JV will be used ahead of time will cut down on post-project stresses tenfold and make sure everyone is clear on if, how and when they can use the project assets.
How will finances be handled? That is, when will you guys receive revenue from the venture? What sorts of things are authorized to be deducted from expenses? Will both parties split the initial startup costs 50/50? Money is one of the main stressors in joint ventures, and setting these percentages in stone will eliminate arguments later on.
What happens if one person can’t perform their duties? Maybe they sign on to another project and aren’t contributing their previously-stated share to the product, or have gotten sick or had a family emergency. In any case, it’s good to know in advance what the consequences will be for backing out or slacking off and whether or not the project will go in and in what capacity.
What’s the plan if you guys disagree, and the conflict can’t be resolved between you? Even with the joint venture agreement in place, there’s still a chance you’ll have disagreements, but the real problem comes about when you can’t come to an agreeable resolution. Will you consult a neutral third party, such as a mediator, to help you resolve the issue? Or have the option to go straight to court? The plan of action is up to you, but you need to have one.

The list seems long, but for the right partner, it’s worth it. It’s all about preparing to work together; preparing for the investment of both time and money, and most of all; preparing to unleash a product for your clients that is so much better than you could ever create on your own.

The alliance between Ash and I was vital to our joint venture’s success. Without Ash, the content wouldn’t have had that little somethin’ somethin’ that readers of her blog have come to know and lust after. Without me, the legal bones wouldn’t be sturdy or complete. But together? We’re unstoppable. Working together has been an absolute pleasure, in part, because we hammered out all of the details ahead of time and both knew what our responsibilities are and what to expect from each other.

Disclaimer: This article is a resource guide for educational and informational purposes only and should not take the place of hiring an attorney. No information in this article creates an attorney-client relationship between the reader and the author.

Rachel Rodgers is the business lawyer for young entrepreneurs with online-based businesses. Her practice, Rachel Rodgers Law Office, is run entirely online. Rachel and Ash teamed up to create a comprehensive legal resource for entrepreneurs that pulls off teaching business law with personality. Check out their project, Small Business Bodyguard: Cover Your Bases, Cover Your Assets, Cover Your Ass, here.

6 Free Ways To Drive YouTube Fans To Your Crowdfunding Page

Modern society is inherently visual. Multimedia content creation and digital innovation go hand in hand as entrepreneurs search for alternative storytelling methods that will distinguish them among the increasingly competitive and cluttered landscape of startups and ventures. Consumers are no longer making purchasing decisions simply by product. Rather, consumers are searching for brands with an appealing and vivid narrative. The easiest method for organizations and brands to illustrate their story is through video. Moreover, succinct and well-executed videos have the potential to go viral and simultaneously elevate brand awareness and online interaction.

YouTube, one of the premiere sources for online video sharing, accounts for 25 percent of Internet search traffic. As a result, YouTube videos, along with other online video tools and platforms, are not only being used to drive successful marketing campaigns, but also to drive successful fundraising campaigns as well.

Social Media marketers and entrepreneurs understand that multimedia campaigns with compelling video are more likely to attract more customers and investors to raise capital through crowdfunding.

In order to translate YouTube viewers into active campaign donors, however, it is essential that content creators utilize YouTube’s full capabilities and networks to achieve greater success.

Below are six tips to drive YouTube traffic directly to your organization’s crowdfunding campaign:

Tip 1: Export Your YouTube Subscribers to a Google+ Circle

For a crowdfunder, this is one of the most exciting YouTube features that you can use. You can easily export your YouTube subscribers to a Google+ page circle and then contact or share updates with them on Google+. ReelSEO has a great step-by-step guide on how to connect your G+ page with your YouTube channel. Once your YouTube account is connected to your Google+ page, go here to get started: https://www.youtube.com/audience_management

Tip 2: Leverage the Annotations Function

Annotations on YouTube are simply text layers that can be placed anywhere in a video and be linked to an external page such as your crowdfunding campaign. You can add direct links to specific video times and grab your viewer’s attention as they pop up on the side.

Tip 3: Add Links to Video Descriptions

This tip seems so simple, yet it’s easily forgotten. Link to your campaign page through all available video descriptions, particularly your pitch videos. If your campaign links are lengthy, use a URL shortener (like Google’s at http://goo.gl/). Make sure you link to the campaign right at the beginning of the descriptions, so it appears above the fold. Link format: http://www.mycampaignurl.com.

Tip 4: Engage Your YouTube Subscribers Through Feed Updates

Consistency is one of the most essential factors of a successful campaign. Keep your YouTube subscribers engaged through your channel feed by posting ongoing updates about your campaign’s process. Make sure to time your posts appropriately and maintain consistent messaging in order to avoid flooding your subscriber’s feed with superfluous content.

Tip 5: Optimize Your Pitch Video and Make It Your Channel Trailer

In order to maximize exposure, every aspect of your crowdfunding campaign must incorporate strong and branded visual content. This includes placing a creative pitch video as your YouTube channel’s trailer. Placing your campaign’s trailer at the very top of your channel will generate more traffic and participation in your crowdfunding efforts. Be sure to add annotations to your video that link directly to your campaign page.

Tip 6: Ask Fellow YouTubers for a Shout out

The best way to land online mentions and publicity is simply by asking. Does your network include individuals with prominent YouTube channels or influencers with common values? Ask them for a shout out, link or annotation on your campaign and video.

Josef Holm is the founder and CEO of TubeStart, a crowdfunding platform designed specifically for YouTube content creators. TubeStart provides creators with three funding models, including subscription-based crowdfunding. In addition to being a successful internet entrepreneur and investor, Josef serves on the board of the industry’s leading crowdfunding association, the Crowdfunding Professional Association (CFPA) and speaks at leading technology conferences around the country.

Mobile First? Apparently Not In 2013, According To Mattermark

I love helping our clients look for promising deals, and I’m starting to recognize certain patterns for exceptional signals of growth that go beyond what our UI exposes in an obvious way. The most surprising thing the data has revealed lately is how few startups have widely used mobile applications.

Of the 200,000+ companies in our database just 6,386 received a mobile growth score, indicating they are or have been ranked in Apple’s iOS App Store in the United States sometime in the past six months. Of this group, only 1,180 are the flagship application of a venture-backed company.

Context: Challenges of Building Product for Mobile

Investing in the growing mobile startups is highly competitive, but finding a promising deal feels a lot like searching for a needle in a haystack. For all the noise being made about going “mobile first” this strategy doesn’t seem to be working (or happening) at the majority of companies we are tracking. Andrew Chen’s piece from August 2012, which went viral again earlier this week, titled “Mobile App Startups Are Failing Like Its 1999″ explains the challenge:

Startups today have a super high bar for initial quality in their version 1. They also want to make a big press release about it, to drive traffic, since there’s really no other approach to succeed in mobile. And so we see startups burn 1/3 to 1/2 of their seed round before they release anything, it becomes really dangerous when the initial launch inevitably fails to catch fire. Then the rest of the funding isn’t enough to do a substantive update.

Context: Challenges of Distributing Products for Mobile

Relatively few startups have applications that are ranked in the App Store, and those who do often spend significant marketing dollars to keep them there. For early stage folks without that kind of budget anything short of an immediate hit will struggle for exposure, while an organic hit can catapult these companies to multi-billion dollar valuations seemingly overnight.

Here are the top 10 fastest growing mobile apps of EVERYTHING we are tracking, based on the Mattermark mobile growth score:

Bitstrips [MM: 669] – Turn yourself into a cartoon character, make comic strips to share with friends. (No known funding)
Notegraphy [MM: 852] – combine words and graphics to create beautiful notes to share (July 2013 $260K seed round)
24me [MM: 378] – automate your calendar and tasks (No known funding)
Paprika [MM: 338] – recipe management (No known funding)
Vinted [MM: 1699] – P2P marketplace for clothes (No known funding)
Bandcamp [MM: 239] – publishing platform for musicians (December $10 Series A from True Ventures, unknown amount)
uSpeak [MM: 67] – mobile language learning (July 2012 Seed round from Great Oak Ventures Capital, undisclosed amount)
Anomo [MM: 65] – anonymous social networking app (June 2013 $355K seed round)
TheFind [MM: 369] – mobile ecommerce (July 2007 $15M Series C from Lightspeed Venture Partners, Redpoint Ventures and Bain Capital Ventures)
SaveUp [MM: 156] – rewards for saving money and paying off debt (July 2012 $5M Series A by True Ventures and BlueRun Ventures, $7M total funding to date)

While many debate the accuracy of these valuations, they are missing the broader point. Few startups know how to do mobile distribution at a price point that makes sense for advertising-supported (or zero revenue) consumer applications, so anything short of a massive breakout hit carries the risk of ending up a huge money-pit for marketing dollars.

What About B2B Mobile Applications?

Ah yes, these rare unicorns. With my fantasy mobile fund I would aggressively go after any B2B mobile application with the slightest hint of organic traction and some previous funding (but not more than $10M) – these criteria whittle the list down to just 147 companies, and if you only want positive mobile growth scores the list is reduced further to just 40 prospects.

I think this is where we’ll find our next unicorns. Want to check some of them out? Here are top 10 on my list for B2B applications on the iPhone, ranked by Mattermark’s mobile growth score:

CoTap [MM: 751] – workplace mobile messaging (May 2013 $5.5M Series A from Charles River Ventures & Emergence Capital Partners)
Droplr [MM: 513] – simple secure file sharing for business (October 2013 $478K seed round lead by Seven Peak Ventures)
Spotflux [MM: 294] – mobile security (March 2012 $1M Series A from New Atlantic Ventures and Kima Ventures)
ClassDojo [MM: 1308] – behavior feedback platform for teachers and students (August 2012 $1.6M seed round from Ron Conway, Kapor Capital, StartFund, General Catalyst, Lerer Ventures, NewSchools Venture Fund and SoftTech VC)
Attendify [MM: 667] – event attendee engagement app (September 2013 $200K seed round)
Certify [MM: 38] – travel and expense management for SMBs (October 2009 $1.9M angel round from Irving Levin, Joe Proto, Esther Dyson, and William Benedict)
Weekdone [MM: 431] – team task management dashboard (November 2013 $200K round from Kima Ventures, $360K raised to date)
QuickMobile [MM: 442] – enterprise event management and planning (May 2013 $3.2M round from BDC Venture Capital, total funding $8.8M to date)
LightArrow [MM: 28] – organization applications (March 2013 $1M seed round)
FullContact [MM: 578] – contact information management (July 2012 $7M Series B from 500 Startups, Foundry Group and David Cohen, $8.8M total raised to date)

Testing out a B2B mobile application can be tough, because it requires much more effort to get going. Unlike consumer apps, where at least some of your friends have likely already joined, with B2B applications you are often the first one. Loading in tasks, projects, schedules, plans, goals, and then getting someone else in the work context to test it out with you can pose a challenge. To fill in the UI and actually get a “real” testing experience takes more time than making a profile and posting a silly picture… and so most people won’t. Which is why for investors willing to expend the time and attention, these types of applications offer an unfair advantage.

mattermark

Do you invest in mobile startups? Purchase our Mobile Startup Report for $999 to receive a spreadsheet of 6,386 startups with mobile growth scores. Data points include app store rankings, estimated downloads, investors, investment amounts and dates, growth stats for web and social, industry categorization and more. BUY REPORT >>

Danielle Morrill is the co-founder and CEO of Mattermark, the Bloomberg for startup investors. Mattermark tracks the growth signals of more than 200,000 private comapnies. The Mattermark newsletter is also one of Nibletz’s top 5 resources for startup newbies.

*This post originally appeared on the Mattermark blog.

Do Entrepreneurs Everywhere Else Need to Visit The Valley?

Here at Nibletz we talk a lot about startups outside of Silicon Valley. A lot of other publications focus on the coasts, where there is an intense concentration of startup activity. Around here, though, we know that in the 21st century great companies can–and will–be built everywhere else.

BUT…there’s always a but…Silicon Valley is still the leader in startup activity. (I know you don’t want to hear it, but it’s true.) In that relatively small part of the planet there are more successful investors and entrepreneurs than in any other relatively small part of the planet. And any entrepreneur who is serious about building high growth startups needs to not only acknowledge what Silicon Valley has done, but look to it for opportunities to learn.

Okay, now I’m off my soapbox. Here’s what put me on it in the first place:

General Assembly and LaunchRock are sending someone to the Valley. With their “Break Into The Big Leagues” competition, the two companies have partnered up to offer a sweepstakes of sorts. The winner gets a trip for 2 to San Francisco including:

Airfare (from anywhere in North America, Europe or Australia)
3 nights at an Airbnb property
Car service throughout the trip
Tours and meetings with the hiring managers at Facebook, Google, Twitter, and Airbnb
Career mentoring from General Assembly and InternMatch
One-on-one coffee meetings with “Silicon Valley VIPs”

To enter, just hand over your email address here.

Now, it’s not uncommon for companies to use giveaways or contests to grow their mailing lists, but General Assembly and launchrock are going above and beyond. Entrant who don’t win the trip will still get access to interviews with tech insiders on how to break in and the GA class on getting a job at a startup.

We’ve talked about General Assembly before. The New York based organization offers educational programs that “transform thinkers into creators.” LaunchRock is an LA-based startup that helps companies set up “launching soon” pages.

10th Magnitude Is In The Business Of Helping Entrepreneurs

You know howW to tell that startup culture is going mainstream? There are now businesses whose sole focus is providing services for entrepreneurs.

It used to be that companies built their businesses on corporate clients (you know, the kind that can pay), but founders with good connections could get a lot of work done for free or cheap. Companies didn’t advertise their services specifically for startups but were often happy to help out friends or acquaintances.

Now, though, plenty of businesses are more than happy to advertise their services specifically for startups. Sometimes they provide services in exchange for equity or sponsorships, but sometimes they also have a payment structure in place that makes it beneficial for a startup to spend some money.

Veteran tech guy Alex Brown saw this kind of need in Chicago three years ago. He founded 10th Magnitude to help founders build out some of the cloud applications they might need. The company also helps big companies jump into the 21st century by facilitating a move to the cloud, but Alex and 10th Magnitude are really excited about startups and founders.

Check out our Q&A with CEO Alex Brown:

1. What is your startup called?

10^th Magnitude

2. What does your company do?

10^th Magnitude is a cloud software and services firm. We help clients of all sizes build and run cloud-based applications, as well as migrate existing applications and infrastructure to the cloud. We specialize in Microsoft’s Azure cloud platform, and we are one of Microsoft’s leading Azure partners in the US.

3. Who are the founders, and what are their backgrounds?

10^th Magnitude was founded in 2010 by tech industry veteran Alex Brown, who combines decades in tech—both on the solutions side and the data center side—with an undergrad degree from Oberlin in economics and an MBA from Yale. His experience includes:

Executive Vice President, Arrowstream, cloud based supply chain management technology
Vice President and General Manager, Univa, Datacenter automation and Cloud Management
Director, Dell Inc. (US and Asia-Pacific), Consulting Services, Global Solutions
Managing Director, Plural, one of the largest .net developers in the country (acquired by Dell, 2002)

4. What’s the startup scene like where you are based?

Chicago is a pretty vibrant startup scene, not only in tech but also in a variety other industries. It’s pretty collaborative, which is great and encouraging to all the entrepreneurs. And, from 10^th Magnitude’s perspective it’s incredibly valuable since a lot of our clients on the application development side of our business are also startups.

5. What problem do you solve?

10^th Magnitude solves the problem of organizational stagnation. Our services allow organizations to innovate without taking on the risk of the capital expense normally associated with that type of initiative.

6. Why now?

I started the company because I saw the writing on the wall. The technology was just coming into focus and has been on a rapid adoption curve ever since. Cloud technology is available now, and we jumped on the opportunity and our clients have as well.

7. What are some of the milestones your company has already reached?

o We are 3 years old with no external funding and we have grown consistently.

o We’ve continued to acquire larger and larger (i.e., over $1B clients on a regular basis)

o We are acknowledged as an industry leader; seated on advisory boards at Microsoft and Channel Company.

8. What are your next milestones?

Our immediate goal is to doubling staff and revenue over the next year.

9. Where can people find out more? Any social media links you want to share?

Twitter: @alex10thmag; @10thmagnitude

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