how much true grit you got?

I am not a big believer in quantitative predictors of start-up success, but Fast company had a great piece today on some research out of Upenn finding that “grit” is the real key to success.  We all know starting up takes grit but researchers at Upenn have discovered the elements of Grit and developed a test to measure how much grit you have. The thing that struck me about the piece was the definition of someone with “grit” sounds like someone ready to start-up:

• A clear goal
• Determination despite others’ doubts
• Self-confidence about figuring it out
• Humility about knowing it doesn’t come easy
• Persistence despite fear
• Patience to handle the small obstacles that obscure the path
• A code of ethics to live by
• Flexibility in the face of roadblocks
• A capacity for human connection and collaboration
• A recognition that accepting help does not equate to weakness
• A focus and appreciation of each step in the journey
• An appreciation of other people’s grit
• A loyalty that never sacrifices connections along the way
• An inner strength to help propel you to your goal

Take the test this weekend and see how you score. If you come out above a 4.5, call me

i'm a start-up guy myself

It is totally irrational and you cannot fake the funk. Starting up is the hardest job you will ever have and you need to be chased by demons and in pursuit of angels just to survive. It is totally crazy and usually financially sub-optimal. You should never do it unless you absolutely have no choice.

If you are overwhelmed by a medical grade compulsion to solve a problem or build a product, and it is easier to start up than to overcome the compulsion, start up. If the idea keeps you from going to bed, wakes you up in the middle of the night and gets you up in the morning and starting up is the only way to cure the insomnia, start up. If all your friends are sick of hearing about how you are going to change the world by starting up and you keep preaching into the doubt, start up.

If not, have a nice weekend and don’t forget to turn in your TPS reports on Monday.

but we're not supposed to lose...

This morning I woke up to a beautiful sunny day full of sour faces here in New York City. On the train to work I heard all about how A-Rod sucks and Jeter is too old etc.Time to fire the GM, replace the manager, get a new third baseman and better pitching. As a Red Sox fan, I agree. The Yankees suck.

But I have to say New York’s reaction to a wasted season (any season where the Yankees do not win the World Series) makes me nervous. It is not the love of a winner that I worry about — we don’t start companies to do anything other than dominate a market and change the world — it is the dismissal of this entire season as a waste that kills me.

Proof that the fear of failing or being seen as a looser will change behavior was alive and well around town today: Many fewer Yankee hats on the heads in Union Square than yesterday for instance…

The Yankees are the incumbent. Each year they have to reassure their fans that they will win with an annual payroll that exceeds the vast majority of start-up exits.  Their fans love to root for the dominant force in the industry, the 27 time champion, 800 lb gorilla — systematically destroying opponents with more resources and raw talent at each position. When Yankee fans put on that hat each spring, they feel confident because there is no requirement for luck, team chemistry or an innovative approach to the game when you have free-agents…They need a sure thing, but have only won the World Series twice in the last 10 years. 20% success? Sucks right?

Imagine if your team had to gut it out for every victory, had to make due with raw talent that was willing to learn on the job and get more done faster for cheaper than anyone else just to stay alive? What would it be like to root for guys who had to hustle to sell tickets and hack the establishment to get noticed by customers? How would it feel to love a team that needed to convince investors of their vision and potential in order to play another year because they are burning cash instead of printing it?

It would feel like rooting for a start-up.

If you had to count on a combination of team, hustle and the occasional error by your opponent where the ball goes through his legs on a routine play in 1986 to win it all, you would be a Mets fan like all the guys in the First Round NYC office. Eternal optimists and loyal supporters of their team who do whatever they can every year to help them win…and sometimes they do.

Thanks David

A few days ago David Cohen published the Tech Stars Mentor Manifesto. I think it is great and as he says, the list speaks for itself. Not surprisingly, it also describes the behavior of the best investors.

When mentors (investors) do these things, relationships blossom and companies flourish. When they don’t, it’s often a struggle.

So, here’s what entrepreneurs can and should demand from their mentors (investors). And here’s what mentors (investors) should consider if they want to build effective relationships with the entrepreneurs they’re working with.

• Be socratic (collaborative).
• Expect nothing in return (Be transparent about your expectations) (you’ll be delighted with what you do get back).
• Be authentic / practice what you preach.
• Be direct. Tell the truth, however hard.
• Listen too.
• The best mentor (investor) relationships eventually become two-way.
• Be responsive.
• Adopt (Invest) in at least one company every single year. Experience counts.
• Clearly separate opinion from fact.
• Hold information in confidence.
• Clearly commit to mentor (invest) or do not. Either is fine.
• Know what you don’t know. Say I don’t know when you don’t know. “I don’t know” is preferable to bravado.
• Guide, don’t control. Teams must make their own decisions. Guide but never tell them what to do. Understand that it’s their company, not yours.
• Accept and communicate with other mentors (investors) that get involved.
• Be optimistic.
• Provide specific actionable advice, don’t be vague.
• Be challenging/robust but never destructive.
• Have empathy. Remember that startups are hard.

Recently, I have been thinking a lot about the healthcare space and see a Gil Scott-Heron style revolution coming there as well.

First Round’s investment in Mother Knows is a great example of the disruptive forces I am seeing in health care and I am really excited we are involved in bringing fresh blood and a consumer product midset into the health care space. The Mother Knows team has deep consumer DNA and they are building an elegant solution for a specific customer: new parents. The product closes the information gap between parents and care providers and helps the parents understand their child’s development from the first days. Mother Knows helps track development milestones and manage immunizations, growth charts and general health records. As a subscriber, your child’s medical data becomes actionable, portable and easy to understand – a God send in an emergency and a dramatic improvement in understanding and meeting the day to day needs of your baby.

Back to Gil Scott-Heron, KRS-1/BDP and the NIKE revolution commercial for inspiration…

A revolution is coming to health care, but it will not come from the practitioners or the coordinators or the administrators. The revolution will come from the imagination of patients who create products that will be user tested, iterated and UX optimized. The impending disruption of the gazillion dollar health care market will be consumerized.

The revolution in health care will not be created with words like efficacy or double-blind. It will not come from labs or be funded by big pharma. The revolution will be touched by screens you can touch and pushed by pixels that have been A/B tested and shaped by paper prototypes that make Eric Ries stand-up and say Amen. The health care revolution will be consumerized.

The revolution in health care will not require the entry of social security numbers in triplicate with each visit just so they can be transposed via carbon copy, read into a series of dictations on mini-cassette tapes by doctors and transcribed into digital form by the same person who handed you the form when you showed up 15 minutes early for your doctor who was running 45 minutes late. It will not require pencil and paper or photocopies of insurance cards and the memorization of group numbers and co-pays. The revolution will know who you are and remind you where you have been, what treatment you have had and how you got better. The health care revolution will be consumerized.

The revolution will not be installed on a circa 1995 piece of equipment and rented out for thousands of dollars a night. It will not get processed and printed onto a billing statement to be mailed to your home and then forwarded to your insurance provider only to be rejected and re-submitted over and over. The revolution will be found in an appstore and it will run on your smartphone for free. It will capture data, motivate action and enable the treatment of the causes of disease not the symptoms. The revolution will help us all become consumers of wellness through better behavior and enable patients to walk in and demand that their doctor treat them as a person rather than a set of symptoms. The revolution will be consumerized.

If you are part of this revolution, I would love to learn more about what you are building.

The emotional bond with a brand is permanent...like a tattoo

The building blocks of modern programming languages, (X)aaS and the simple integration of social mean anyone can build a product or service cheaply and quickly — original or knockoff.

Good ideas will be copied so founders should leverage the technology ecosystem in hyper-efficient construction of brands that can emerge as category killers. To create significant enterprise value web start-ups need to think like a T-shirt company and build an emotional connection with the consumer that transcends the product.

In the T-shirt business, your competition has access to the same basic materials and blank shirts, the same printing and embroidery machines and the same stores for distribution. If you operated in this commodity product environment, would you stand out? If someone decided to knock-off your idea, would you keep your customers? Would you still be in business if you were selling T-shirts?

The commoditization of the technology stack means the copycats are coming. A focus on understanding the consumer and being best at the one thing they care most about is the only way to win.

At AND 1 we started with a brand thesis and used the commodity medium of T-shirts and shorts to deliver our message to the market. We focused exclusively on the ballplayer with attitude and spoke to him with every product, every ad, every piece of the AND 1 experience. We believed if we got our stuff on the backs of the most smack-talking, ankle-breaking, jump out of the gym ballers with attitude, the rest would follow.

We had to elicit emotion and connect in a way that transcended any one experience or product. (because even the best products can be copied)

We couldn’t out-spend anyone in marketing. We didn’t have the volume to compete on price. Heavier weight T-shirts in higher quality cotton and uniform quality shorts with a 3-inch waistband were our “technical” advantage. This got us in the market, but we knew the consumer better and the attitude we poured into every product allowed us to win. When NIKE and Adidas offered our $35 short for $30 and when all the MeToo brands jumped into the trashtalk T-shirt game our consumer stayed with us.

The other guys claimed to understand the consumer and they copied our slogans and our shorts, but it fell flat. We went deeper into the soul of the game. We embraced hip-hop swagger and launched the mix-tape. We were the playground brand when streetball was the brand of hoops everyone wanted to play and watch. We had NBA bound ballers tattoo our logo on their bodies while the copycats watched their stuff go on sale. Our target consumer wanted AND 1. Our brand was legit and we rode this brand legitimacy to over $200M in sales.

My experience at AND 1 taught me the power of brand and I see the next wave of massive enterprise value creation requiring brand investment. Companies need to differentiate on deep consumer insight and exceptional product experience to earn consumer love and loyalty.

Brand is as important to tech start-ups as it is to people who put ink on cotton T-shirts or sugar, flavor and color in carbonated water.

If you are building a brand, let’s talk. If you’re not, let’s talk about why not.

Don't forget to tell a story when you hit the stage

This weekend I was lucky enough to hang out at the Tech Crunch Disrupt Hackaton and then get invited to head over to BarCampNYC6. Over the course of the day, I was reminded of the power of deep passion and creative environments to pull the best from each participant and to focus the mind on moving from idea to implementation and back in endless layers. NYC Geek-er-y was in full swing but the narratives did not live up to the talent in the room.

After being up for more than 24 hours straight, over 100 teams at the Disrupt Hackathon were given 1 minute each to present their hack to the judges. The 4 winners, Gilt-II, Docracy, Dispatch.io and Doach, will be presenting on the main stage at Disrupt on Wednesday – and they are all very cool – but for me the biggest difference between these 4 and the other 99 teams had much more to do with the quality of their 1 minute presentations than the technical quality of their hacks or the creativity of their ideas.

Where the four winners separated themselves for me was by presenting a narrative that fit the data they had spent the weekend creating. They described what the hack was and showed us what it could do. They talked about how they built it, who would use it and why they would love it. “Once upon a time” to “happily ever after, The End” with 30-45 seconds of demo in the middle helped the judges know what they were looking at and why they should care.

Each team spent close to 1500 minutes straight creating their hacks. I saw super talented people building clever solutions to problems and in the process, creating data to support their bid to pitch on stage at Disrupt– data that was often lost in the one-minute demo. Sleep deprivation certainly played a role in these lost in translation demos, but I think with 15 minutes of preparation each team could have crafted an impactful narrative around their project.

With a 1 minute time limit, you can practice your pitch 10 times with 30 seconds of teammate feedback in between in 15 minutes. If each team had been able to craft a narrative to highlight their hack and practice a few times, my sense is 2-3 different teams might be on stage this Wednesday.

Either way, congrats to the winners and I look forward to seeing you bring together that perfect combination of story and data when you hit the main stage later in the week. Until then, I will be working on a high score in my new favorite game.

Wait...why is the door locked?

I am spending the day at Harvard Business School today. I am ahving lunch with some MBA students, speaking about entrepreneurship and investing and meeting some teams who are launching companies out of school.

My friend Adam organized the trip and I look forward to hanging out with Christina, Andrew, Dustin and David for the day.

I imagine a lot of the questions will be about getting a job in VC. I have lots of thoughts on this but they boil down to act like an entrepreneur or better yet, be one. Founder is the hardest job in the world to be good at, but it is the easiest job in the world to get – you just have to start.

As I sit on the train headed to my beloved Boston, I have to admit I am thinking about taking the next step in a career and the last time I visited the business school at Harvard.

It was 10 years ago.

I was a prospective student.

I got dinged.

It hurt.

I recovered by launching a company.

The day I got my rejection letter, I signed up for an Ironman. I wrote “sub-12” on the letter and started training. The training forced me to use technology to monitor my performance and track my progress against specific goals. This activity, combined with hours of solitary time in the pool, on the bike and running the trails of Portland inspired me to build a fitness technology company that evolved into the first home fitness video game.

As I would have been taking my first semester mid-terms I finished the ironman in 11:40.

I did not worry about building a feature or a product or a business, I started with the process of working toward a goal. I knew that my use of technology had helped me achieve my goal and the same thing should work for other people. I started with the hunch based on the unaverage – me and other long course triathletes – and designed a system to monitor training and provide suggested adjustments to the training plan based on training results and stated goals. I called it multi-phase media.

As I would have been planning a globe-trotting b-school winter break, I started talking to angel investors.

Moving from particulars of the system to generalities of the market I realized that while there are more than 1,000 people doing ironman training there are probably less than 1M. Still convinced that the concept of personalized, interactive, goal oriented technology was an ideal training platform, I went looking for a bigger group of people.

As I would have been selecting classes for my second semester I was executing my first pivot.

Gyms seemed like a good place to start. I spoke to gym managers and fitness instructors at a local gym. The managers loved the concept and talked about the cost savings they could see coming from a platform of networked gyms with virtual trainers and the deeper engagement they could get with their members by moving state of the art entertainment from TV to interactive experiences. For trainers, it was “suicide” as more than 75% of their income came from private sessions with “clients” and this was a “trainer replacement.” I learned that the only products they ever recommend to clients were for diet or home workouts. Damn!

As I would have been starting to think about a summer internship, I had another pivot to execute.

I found out that more than 40 million fitness DVD’s were sold in the US every year. In a small market test, home fitness users said they loved the privacy, the convenience and the cost of these workouts. They hated the linear format, the lack of diversity in the exercises and the fact that there was no way to know if you were making progress or doing it right. At the same time, game consoles were becoming ubiquitous and while women were the decision maker in 80% of the games sold each year, they only represented 20% of the end users of the games.

As I would have been heading into my first summer, I was recruiting a team of people to pursue a new hunch, to build a fitness video game and take on the monumental task of convincing women to put a disk into the box next to their DVD player and unlock a personalized, interactive, goal oriented home fitness experience.

We built a great product and sold it with some success. My choice of business partners could not have been worse. How we chose to handle a lawsuit early in the company’s life was immature and bled us to death. The way I structured business development deals and allowed the capital structure of the company to evolve were naïve.

As I was standing in front of 40 people to verbalize the layoffs that they knew were coming, I would have been celebrating my first reunion with my HBS classmates; maybe raising a glass to toast the business I started while in school and the partners and supporters from the HBS network who joined me in the effort.

You never know what will happen, but if you always listen to your hunches and pursue what you are most passionate about at the time, it will work out.

You want to work in VC.

You should pursue it with passion.

You will probably get dinged.

It will hurt.

Recover by starting a company.

I wish you the best in your search and hope my thoughts today are helpful. More importantly, I hope you will call me this summer if you need support in your recovery and have decided to #beafounder.

Cheers to everyone out there pursuing their passions as businesses, hobbies or side projects. No matter the outcome on paper, you have won the game.

I have embedded my portion of the evening below along with the slides, but all the videos are available on Vimeo. I am not sure when the next Hobby NYC event will be, but I will be there and it will be great.

Here is the talk:

Hobby: Phin Barnes, Sneaker Addiction from Harvest on Vimeo.

and here are the slides:

While working on another side project I will be unveiling shortly, I found Jason Walton through @spencerfry and Carbonmade. A quick search for illustrators lead me to Jason’s portfolio and I reached out to see if he would be interested in helping me with a small side project. I described the project and asked him to send me a couple examples of the work he felt was closest to the style I was describing. In addition to existing work, an early version of the sneakerheadVC logo you see at the top of the page was one of the examples he sent over. I love the logo, but the experience of working with Jason has as much to with my affinity for the image as the quality of the final result.

We talked about First Round Capital and my sneaker addiction coming together in a logo as they had in the name, SneakerheadVC.  Jason suggested using the First Round color palette and adding an FRC to the shoe because the opportunity to work at First Round is what made me a VC. Jason was also inspired to represent the shoe as a simple line drawing because First Round is a seed-stage fund and we often invest in a vision before all the details have been figured out.

If you have graphic needs big or small I would encourage you to check out Jason’s stuff. I would also recommend using Carbonmade to discover artistic talent of all kinds and if you are in the creative services business, throw your portfolio up there. It is killer.

MVPP: one slogan per shirt

When I was at AND 1 my job was to understand the customer and build product that he would love (and buy). In my role at First Round, I get to meet tons of smart people who are doing the same thing. I was making t-shirts, shorts and shoes and they are building technology, but at the end of the day, understanding what the consumer will love (and buy) is the essence of the work.

A popular framework for product development is MVP, minimum viable product as championed by Eric Ries. Iterative development is great because knowing your consumer is hard and it is tempting to cheat by throwing every feature you can think of into the product. At AND 1, when I was not sure what a consumer would love, I would add features to make the product “better.” A buyer at Footlocker taught AND 1 the real cost of this approach and introduced us to what I call MVPP, minimum viable product purchase.

When AND 1 started, there were 5 trash talk slogans and shirts were printed in a Philly basement. The slogans are still great and I try to work them into my game as much as possible

1. Your game’s as ugly as your girl
2. Wear a collar, you just got dogged
3. I’m the bus driver, I take everyone to school
4. You have NO game
5. I saw your game on a milk carton (it’s missing)

Early on, AND 1 got the opportunity to meet with Footlocker for the first time and it felt like a “make or break” moment for the brand. The team spent a ton of time putting together samples to show the buyer and went up to New York with 5 sample shirts. Black, Blue, Red, White and Grey. Each one had the AND 1 logo on the front and all five trash talk slogans on the back. If one slogan is good, 5 must be better, right?

The meeting went really well, but the buyer made a critical product suggestion: Why not put one slogan on each shirt instead of five slogans on one shirt? He thought kids would buy two or three shirts each, and that by recognizing the minimum viable product required to get our customer to buy, we could double or triple our market.

If the shirt was changed, he said he would take 5 of each in each of the five colors. Doing the quick math, that was 125 shirts and made Footlocker AND 1’s largest single customer. Later it became clear that he was ordering in thousands and AND 1 was one step closer to becoming the number one basketball company in the world.

The product suggestion, focus on MVPP, changed the trajectory of the company very early in its life. Now, when I learn about new products and technologies, I always wonder if we could grow the total opportunity by offering less. In the effort to build the best launch product or to discover product/market fit, are we iterating into offering much more than the consumer requires to make a purchase decision? Does our launch offering set expectations for the consumer that will make it harder for the company to grow in the future? Rather than killing features, could we save them for later?

Elegant design achieved through killing features and discovery of product/market fit informed by iterative development are frequently discussed and I would love to get your take on this extension of MVP to MVPP in the comments.

Sneakerhead (VC) Illustration by Sam Flores for LRG

I changed the name of my blog. I want to explain.

I have been collecting shoes since 1985. As a kid I would do jobs in the neighborhood to earn money for kicks. When the Air Max came out I had to have it and once they were dirty, I cut them apart to learn how they worked. My original Jordan 1′s suffered the same fate. I wore those with two pairs of socks so I could fit a 6.5 and get AJ’s, not the sky jordans that the rest of my friends had to wear in the kids size.

As a ball player I was in the sneaker culture and quickly moved from curious to addicted. Understanding the story behind the shoe, the inspiration, was always the best part. It was not enough to know they were hot, I wanted to know why they had been built that way and I love to talk about it.

After collage I worked at AND 1 and while still a collector, also became a creator. We did the mix tape and the ToChillin. We did trash talk tees and ad campaigns with Spree getting his hair done to the National Anthem within days of choking his coach. Our customers tattooed our logo on their bodies.

The designers had reasons for every shape, stitch, material and color we put into a shoe. As the creative director, I learned how to bring the consumer’s eyes into the design studio and work with the artists to create product that would pop. They taught me the language of design and creativity.

We had to choose from thousands of sketches, hundreds of prototypes and build a line of 10-12 styles every 3 months. Each shoe had to create an emotional reaction from the consumer from across the playground court or the food court and continue to delight with discovery through the purchase and use.

At the end of the day, my job was to work with extremely talented people to help them bring their vision to market. In my role at First Round I do the same thing. My years of addiction, of developing a curiosity and deep appreciation for the creative process and for discovering what a consumer really wants are paying off.

If you want to share your creative vision for a technology product or service or if you want to talk kicks, I am in.

We’ve been waiting all year for 2010. So glad it is right around the corner!
Happy Holidays,

SneakerheadVC @phineasb

What's in a name?

I was talking with an entrepreneur today about messaging and his frustration with having a great product that some customers are struggling to understand reminded me of some kicks I built.

When I was the creative director for footwear at AND 1, Ballers were walking around in soccer slides with socks on before and after games, to the mall, to the B-B-Q and to school. Not a good look, not that functional and your socks get ruined. We wanted to create a slip-on shoe that could be worn before and after games and generally enter the casual athletic market. We built the shoe you see here and called it “the slide.”Comfortable, affordable and way better looking than soccer slides with socks.

I took it up to 155th and 8th to test it. Everyone hated it. I took it to West 4th, they hated it. At playgrounds and malls across the country, everyone hated “the slide.” We tested different colors and fabrics and nothing worked. Kids said we should stick to lace-ups or make a soccer slide.

The shoe was a failed experiment until our audience helped us with the messaging.

On my last testing stop before heading back to Asia to finalize the line I was at the Northline Mall in Houston, TX and didn’t notice the kid holding The Slide until the argument started. 30ish high school kids, boys and girls, surrounded the shoes and 29 of them were laughing at the one holding the shoe. He argued with them with no success until he said, “No, stupid. It’s not to hoop-in yo, it’s to-chill-in.” The other kids were silent. Then, one by one, they agreed. In this group “the slide” was the best shoe.

I delayed my trip to Asia by a week and went back to all the other places we tested product, but this time I did not bring “The Slide” I brought the “Tochillin.” It tested off the charts and we included it to the line. Within 12 months we had a $50M Tochillin business with multiple styles and the original Tochillin Low went on to sell over a million pairs in 3 years.

The name of a product or service or how it is positioned through marketing and customer messaging can determine its success or failure. Don’t assume to know your audience, listen to the market to discover the right message. If you have an example of messaging changes that drove significant changes in consumer acceptance I would love to read it in the comments. If you own a pair of ToChillin’s, post it here or on twitter with the #todayskicks tag.

Artful Product

Working with footwear designers taught me a whole new language and comparing my translation of a design with the actual or rumored backstory for a given style or limited colorway is a huge piece of my sneaker addiction. It is fascinating to decode the art and look for messages in the decisions the designer made. The same opportunity exists in street art, t-shirt design, music, poetry and spoken-word. There is always a backstory and the art becomes more meaningful as you discover the message the artist was trying to convey or, in the absense of a message, you discover the inspiration behind the design — what were the visual cues, the feeling the designer was trying to build into the final product.

As a long time fan of Rodger Gastman’s work, his magazine and the cross over between art and product that exists in pop-culture T’s and today’s kicks, it was cool to see these worlds come together to form a  collection at another innovative powerhouse, Threadless. Congratulations to all involved. I will have one of each.

Kanye West, 100K Battle Winner Murdoc, and Ahmad, all return to the World Famous Wake Up Show with Sway & DJ King Tech. Episode 4: Interview and Cypher!

The rest of the interview segments are here.

Anyone at the top of their field should be inspired by Kanye’s willingness to participate and should look for opportunities to reach out to the community that raised them and help others climb toward their goals. The more you give the more you get. Competition is none.