I can't hear your idea and the answer is NO!

If you are responsible for delivering a product that works and doing it on time, you have a monster inside. It starts as a small feeling in the pit of your stomach, but this menacing character can quickly take over and as deadlines approach, Dr. No is unleashed and this evil doctor cannot be controlled.

There is a tension between people who dream up product on paper and people who build product for reals for reals…I have had to work through this tension with every product team from sneakers to mix tapes to video games and iPhone apps…the creators keep asking for more and the builders say no louder and louder and if not managed effectively this split causes you to loose the valuable collaboration between disciplines and the creative solutions that come out of great engineering teams.

If your engineering lead has become Dr. No, you may have a culture that treats engineering as a resource to be consumed, as executors who can never work fast enough or hard enough to deliver for everyone else. Can you hear it in your product meetings? No…silent behind a blank look. No…wrapped in rolled eyes or a shrug. No…articulated with a frustrated shake of the head. No…slicing through a suggested change before it can be considered. NO…cutting off the thought before it is complete.

You are the CEO. It is your f’ing fault. It Sucks for everyone. You have to fix it.

At my game company, I was responsible for product and Dr. No was in the house as soon as we started writing code and it was my fault. I had spent 6 years managing design and development at a sneaker company. The process of game design was similar, but building a digital product was totally different than working with leather and molded rubber. I knew what I wanted built but I didn’t understand how our product was built and didn’t get why some “big” changes were easy and some “small” changes were impossible. I started to think it was a personnel issue and that I needed a more creative/open minded and hard working CTO/engineering team.

Turned out I just needed to learn some basic logic about our product architecture and incorporate these constraints into my thinking. Also, once I started trying to learn, started listening to the reasons why some of my requested features were crazy, the engineers started listening to me and identifying the goal that lay under the feature request — adn finding awesome ways to achieve the goal without derailing the entire product process.

It was a communication issue and I had to own it so the two sides of product creation could stop speaking past each other in different languages based on different assumed priorities and different work flows and processes.

I worked with my team and we adopted some simple rules that really helped.

1. We started every product change or feature request with a statement of the goal. Before any work was done, we got to agreement on the goal.This put everyone on the same side, trying to find a solution leveraging their expertise/knowledge
2. We moved from a culture of “no” (engineering saying no to requests and design saying no to new ideas for product coming out of engineering) to a culture of “why?” that focused the whole team on understanding an approach and collaborating to remove blocks in the process and to understand the trade offs that have to be made as resources are allocated and deadlines approach.

The head butting didn’t stop, but it got down to a healthy level. People learned from each other and made each other better. Designers worked within the constraints of what could be done and engineers found ways to deliver product that met the designers’ goals.

I don’t think designers and other product creators need to be able to code, but they need to understand the engineering process enough to consider it as they design. Engineers do not need to “get design” or be UI/UX experts, but they need to internalize a view of the end user as interpreted by the product/design team.

For some more on this with specific tactics for designers and engineers, see this piece on designstaff.org

When you start-up you are building a fire and there is lots of wood to chop. Most founders could bring down trees by hand and snap the logs into fire wood over your knee. You have a vision, you are consumed, you will get it done with tools or with your bare hands — somehow, some way it will get built and it will burn.

VCs are tools. Tools are heavy, hard to carry and if not handled properly, they can hurt you. But, a good tool applied to the right problem at the right time can make you more efficient and help you build with higher quality and greater precision. The best tools can open up new worlds of possibility and help you focus on hitting exactly what you’re aiming for; remove friction and point all your energy at blasting through the market you are attacking.

When you are ready to build, tool choice really matters.

The best builders know what they need, how to choose the best tools and get the massive leverage from a great match of tool/builder/project. When you are about to put metal to wood, ready to make the first cut, take the time to carefully evaluate and select your tools. There are a ton of options out there and most are great for a specific job — each offers specific advantages and all have specific limitations.

There are lots of axes you can choose to pick up and swing. Make sure you don’t bring an ice axe to get shit done in the wood shed.

I am setting my priorities for 2012 and starting by betting that doing less, slower in will lead to accomplishing more, period.

Start-ups are a natural home to frenetic activity. People work super hard and put in long hours to see their vision fulfilled. In this world you have to do more than you think is possible faster than imaginable.  Investors are the same way, doing everything we can to see everything, go to every event, talk to every entrepreneur and make sure we don’t miss out. On either side of the table chasing every opportunity without focus or priorities is a fast path to working more and more and accomplishing less and less.

I love hustle, but hustle without depth and focus is a waste of time.

With this in mind, I spent some time looking back at 2011 – the milestones in life and at work.  Life was great with a move to Brooklyn and a new baby. Professionally 2011 was fantastic in a lot of ways and I loved spending a year in New York meeting really smart people who are busting it to build really cool stuff. However, looking back, I brute forced my way through much of the year and in 2011 I got eaten by my inbox.

Last year I spent a lot of time in the glorified position of inbox zero, but at what cost? What was urgent (often for other people) bubbled to the top and got done, but things that are important to me – time to engage deeply with a product or service; a lunch meeting that extends into post lunch coffee when the conversation is great; letting an idea you are passionate about or area you want to learn about consume you for a morning or a day; carving out time to chip away at a long term project in a consistent way for a month or a year – got squeezed out of the calendar.

My 2011 accomplishments, the goals achieved, all came from the discipline to focus and the control to slow down and make time for deeper, more meaningful engagement and learning. But somehow, the sense of accomplishment in the measurable elimination of unread e-mail often over-shadowed the need to prioritize my time, energy and focus each day.

I can’t let this happen again, so all the respect in the world to Brad and David, but in 2012 my new year’s resolution is to do less, slower.

Culture: wear it loud

Use your company culture as the first filter in the hiring process. If someone doesn’t like the experience, they are not a fit. Move on.

Culture is a powerful thing and when you get it right, it can be a guiding force in you business — how decisions are made, how innovation occurs, how people are motivated, what they are motivated to do…all culture. Whatever culture you create, it should be intentional, related to your mission and make it obvious to anyone who walks in the door what is important to you as a business.

If you make the culture obvious, make it loud and ubiquitous, you can create experiences for potential hires that expose them to the culture and really evaluate cultural fit — before you hire them.

AND 1 was a basketball company and we played hoops at lunch on the full size court in the middle of the office. Everyone who interviewed for a job over our first 100 hires had to play in the lunchtime run. Most people thought we were evaluating their game but we didn’t care if they could talk trash or hit a J with a hand in their face. We actually cared about the 5 minutes before the game. We cared how they reacted when we asked them to play — were they open to new/uncomfortable situations. We cared how they responded when we took them into the supply closet to pick out shorts, shoes and a shirt — did they love the product and engage in finding a cool hook-up with stuff that matched. We cared how they acted on the court — did they have fun and commit to the game or remain uncomfortable and nervous. For us, this was all about fit.

Recently I saw this piece on our portfolio company Fab.com and I think is shows how they are wearing their culture on their sleeve (and i don’t just mean Bradford’s ink). If I were interviewing potential hires for Fab, I would make sure to meet them at the front door and point them to the person they were going to meet — across the office. If they could walk across that office and not stop to look at something or pick up an item off someone’s desk just to check it out, I am not sure they would be a good fit. The company is all about design, the office is full of amazing design objects. It is totally subjective, but if a potential hire is not drawn to pick up at least one, does not appreciate an image or object for a moment as they head to their meeting, I would question if they are right for the job.(they are hiring by the way)

Creating the culture is the hard part, but once you have it, use it as the primary filter in your hiring process. It will pay off.

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

(first post from my mobile)

Over the past month, I have spent a lot of time working with companies on their plans for 2012. Everyone wants to do more than their resources allow and getting the most out of limited resources is in many ways what it means to be an entrepreneur.

But, teams often start editing the options before taking the time to fully create. They say no to opportunities before exploring them because the resources to support them are not in the current plans. The decision is obvious in the current headspace — but editing like this, locking in to your current headspace, makes it really hard to understand the value or potential of an effort and to optimize your opportunities instead of allocating your resources.

A simple example of this is travel. At my video game company I was responsible for product, marketing and sales. As the product got close to completion, I started to travel a ton. From Portland, OR, I was working on marketing partnerships in New York, Cincinnati and Chicago. I was also making trips to Seattle, Minneapolis and Bentonville trying to sell a fitness game to any buyer who would listen.

I scheduled all this travel myself and worked really hard to get the most out of every trip. As hard as I tried, there were meetings and opportunities I missed because it was impossible to get from one place to another, through security and across timezones to make it work for both meetings.

Once, I had to choose between meeting the head buyer at Wal-Mart and a national media opportunity in New York. I knew my priorities and based my choice on what I thought was best for the company.

We sent the product to Good Morning America and it was included in a segment (instead of me having my 15 minutes of fame by being on the show). I went to Bentonville to try to sell some games. I made the trade off based on the headspace I was in — a commercial traveler trying to generate revenue for my company.

But what if I had a private jet? How would my decisions and opportunities and priorities change in this new headspace? If I had a jet, I might have taken the time to more fully understand the chances of appearing on the show and the value of a focused segment vs. inclusion of the product in a segment on fitness gaming.

I think I allocated resources rather than optimizing my opportunities.

As you make your 2012 plans, fine people $100 for saying “no” and push them to imagine a world where anything is possible, unconstrained and with infinite ability to execute. Figure out what you would do and where the company would focus to optimize opportunity. Be clear about why.

Use this vision of the biggest opportunity to set your priorities and allocate your resources in the real world.

Last night I got an e-mail from a friend and classmate asking if I would spend some time with his friend who is graduating this spring from a top 3 b-school. He said she is:

…moving from consulting to a start up and would like to know how to best position herself in order to build the necessary skill set and make the transition to VC in the longer term (sales & ops, biz dev, sales etc).

start-ups are not stepping stones

I really don’t know what to say to this. People who start-up suffer, they grind, they obsesses, they push against the way the world is because they believe they can change it– for the better. You cannot survive this if you are not driven by passion and you will not do well if you are focused on what is next rather than what is now. Working at a start-up can open lots of doors — if you crush it. But if you view it as a stepping stone in your perfectly planned, career management optimized life plan — you will fail. Doors will close.

When I hear this type of multi-step plan I want to be helpful, but I struggle. I think the most successful people find ways to always pursue the opportunity they are most passionate about at that moment. Life is too short to spend years “learning the necessary skillset” to do what you actually want to do. You can be successful at a job if your motivation is to build the necessary skill set to make the transition to something else. If you want to be a VC, or anything else, then do that. Don’t waste a start-up’s time and money by optimizing for your future instead of the future of the company.

When I joined AND 1, I saw the opportunity to work on sneakers, a life long passion, and to play hoops at lunch, another life long passion. When I joined the footwear department, it was a department of 2 (me and a co-founder of the company) and I spent my first week organizing a storage closet and making photo-copies of design sketches. I loved it. I loved looking at the sketches and I loved being in a closet full of shoes. I also loved playing ball at lunch everyday and talking trash with a bunch of other young, smart people working their asses off to be part of the number one basketball company in the world.

I had no idea what I would do next and I didn’t care. We ended up at close to $200M in revenue and I played my part, but I never could have been part of this journey if I was motivated by anything other than love of the game.

When I left to build a fitness gaming company, I knew it would be hard (maybe impossible) but I was compelled. I could not help myself. I needed to work on the idea because I could not think of anything else. If I had thought starting that company would have helped me get a job in VC, we never would have pivoted from triathlon training software to home fitness games; We would have quit when we couldn’t get developer kits from Microsoft for X-box; We would have closed the doors when NIKE chose to work with Sony (instead of with us) on a fitness game; We would have given up when the gaming retailers said no and we never would have gotten Nordstrom or the fitness video buyers as Best Buy and Wal-Mart to say yes. If anyone on our team had been looking forward to their next job, we never would have raised money, built the product, sold over 100k copies and helped a bunch of people discover a personalized, interactive, goal-oriented home fitness experience…we would have just failed…sooner.

If you are a second year MBA and you are going to McKinsey or Goldman, great. You have a job. Enjoy. If not, spend the break getting back in touch with your heart and forgetting the strategic idea of necessary skill sets and career trajectory. Come back in the spring understanding the career safety net that lives in the risk mitigating degree you just spent 24 months earning and be ready to pursue a passion – be ready to jump.

When you want to talk about that, how to do it, where to start, I bet you will find lots of MBA alumni, including me, ready and willing to help. If you are still trying to figure out the stepping stone game to the end game that you can’t define because it is 5 years out…maybe talk to career management instead…

UPDATE: for another/additional look at this, see this piece on designsstaff.org

It is a great time to be a designer. Big companies are recognizing your value and your scarcity and start-ups are investing in design. With all this attention starting to focus on the craft, you will get calls, lots of calls.

Be excited, but be careful.

If the "product guy" can't answer these three questions, move on

Design is a hot topic right now and the bandwagon is filling up fast. Recruiters, investors, product guys, all calling to see if you want to come work at a start-up that has a great concept and early traction, but really needs some help on the design side…

When you hear this, listen. It could be a great opportunity. When you hear this, be skeptical, it could be some investor pushing a team to check a box. Everyone is saying you need a designer to be successful, but most people don’t know what a designer needs to be successful – and it is up to you to figure out if you are just a name on a list and will be a resource to be consumed or if this is a chance to be an integral piece of a culture that is driven by design.

I have been there, at the start-up that needed a ton of help on the design side to be successful. When I was the creative director for AND 1, we decided to invest in design and opened an office in Portland, OR. We ended up pulling some of the top designers from NIKE and Adidas over to our side. We built a fantastic squad. It started paying off immediately in marketshare and mindshare. Leading this team was a blast but I think we created a real advantage because this talent was poured over a culture compatible with design rather than into a department to be consumed as a resource.

The recruiting effort was intense and we went after top people across the industry – selling them on joining a start-up as designers. As the conversations progressed, I realized that all the best guys were asking us the same 3 questions in different ways and they all related to our culture.

1.    Where do new ideas come from? For example, how did product X or marketing initiative Y go from idea to in market? Who was involved? What did the process look like?

In my experience, designers flourish in a best idea wins culture. Look for a company where you are expected to contribute on any topic at any time. You will be more successful at start-ups that want engagement and vision on every consumer touch point and internal process and are set up to act on individual insight. If the person interviewing you knows what they would do with a great idea, it is a good leading indicator of this type of culture.

2.    Who is your customer? How do you know? What would it take to change the definition of your customer?

The best product teams I have been involved with always got the vision holders close to the consumer and created powerful loops of market feedback. Look for a culture that counts on everyone to help define the customer and that is open to new perspectives from customer service to finance to sales etc. A well formed, but plastic customer description that is expected to evolve with new insight means the door is open for innovation and that your developed sense of consumer empathy will be put to good use. 

3.    What does your brand stand for and what are your product priorities? 

At AND 1 we started and finished with the ball player with attitude and believed in brand above all else. Companies that have a well defined vision for the brand and believe in building brand across all consumer touch points are more likely to support successful designers. Brand conscious start-ups tend to be consumer centric and have a native, design driven culture where you can have material impact without material politics.

I think any designer considering a role at a start-up should be asking some version of these three questions and learning if they will be a design resource or a successful designer. If the company is not set up to let you succeed, keep waiting, the phone should ring again in 5…4…3…2…1…

If you are a designer thinking about joining a start-up I hope you will reach out. If you have other questions you think are critical to ask, I hope you will leave them in the comments.

Last week I spoke on a panel about subscription commerce at the Biztech@Wharton conference.  First Round has eCommerce in our blood and we are always looking for innovation in the space. Online subscriptions are an emerging trend and we have some great companies in our portfolio who are innovating around subscription commerce.

These businesses are much more than putting things in a box once a month. On the panel we talked about paid and organic customer acquisition, the complex operational requirements of the business and the value of original content as an engagement mechanism.

The most interesting piece of the conversation for me was around the question “how do subscription commerce companies create value and are there industries or subscription models that are more or less attractive for entrepreneurs and investors?”

Check the box to create maximum value in subscription eCommerce

Across all the “Birchbox of X” companies I have seen in the past 12 months, I think there are two things required to create maximum value in the subscription commerce space:

1. Opt-out economics
2. Brand voice

Value Driver #1: Opt-Out Economics

One of the great things about the subscription model is consumer commitment. When they subscribe, the consumer makes the purchase decision one time, but they buy every month. The best services completely separate the pain of the purchase from the reward of the product. The consumer gets a ton of distance from the pain of paying and may even think of the service as a gift. Big eCommerce businesses can be built by making compelling offers to your membership on a regular basis, but if the decision not to make a purchase in a given month is not equivalent to canceling your membership, then you are a building push commerce and might be closer to a flash sale site than a subscription business.

Value Driver #2: Brand Voice

Subscription commerce is most valuable when it fundamentally changes a consumer’s consideration and buying process. These companies need a powerful brand voice because the conversation with the consumer is on-going. It is this voice that builds an unfair advantage when it comes to curation and personalization in a cluttered market. It is this voice that helps the consumer discover what they want, shows them why they need it and delivers the surprise and delight to generate loyalty, motivate engagement and drive incremental purchases.

Because of these two must have value drivers, subscription businesses work best in categories of consumer goods that are overwhelmed with choice from infinite brands; categories where the consumer understands quality in a qualitative rather than quantitative way and where experimentation with a new product is both low risk and delivers immediate results.

When you have all these things working for you, you have built a service that moves people. You have the chance to change the way people shop.

The conversation covered a ton more than this and I really enjoyed it. Thanks to the other guys up there with me, including moderator, Anand Sanwal from CB Insights, Greg Alvo from OrderGoove, Rob Lafave from our portfolio company Foodzie, Matthew Smith from Shutterstock and Todd Smith from Stunner of the month

the pre-mortem, a no BS look into the future

Post-mortems help you do it better next time. In start-ups, sometimes you only have one shot and so I love the concept of the pre-mortem to help you do it better this time.

When I was building product at AND 1, we always did post-mortems on product launches and other strategic initiatives. It helped us get better as a team and build a culture of make mistakes, but never make the same one twice. In lots of start-ups, you see post-mortems in the form of Eric’s 5 whys when things break, when dollars are wasted and when people are looking to improve for next time. This is great, but it doesn’t help make what you just did any better and it doesn’t help eliminate the group think that probably caused the mistake in the first place.

The true “best idea wins” culture is rare in a company of more than about 10 people. As an organization scales, you have more structure and more meetings and often you get conversion around an idea or strategy and lose the highly valuable dissenting opinions.  A systematic post-mortem will help the company make better decisions over time, but to really make better decisions as a group, the institutionalized pre-mortem is one of the best ideas I have heard in a long time.

In a pre-mortem, you get your team together after a strategy or plan of action has been set and instead of asking them to project what will happen, you tell them to imagine it is 12 months from now and the effort was a complete disaster. Their job is to describe, in a detailed narrative, what went wrong and the impact of each mistake. You may not kill the project, but pushing your team to point their creative talent at imagining the things that got messed up a instead of the arguments for going full speed ahead, you will look through the curve and see errors before they happen.

Rather than group think, you have institutionalized dissent.

The term was created by Gary Klein and I heard it in the video below where Daniel Kahneman talks about the concept and how to apply it (the whole thing is good — the topic is how to think of decisions as products and implement quality control mechanisms, but the specific part I am referencing is from about 13:00 minutes left to about 8:30 left). Let me know if you try it and if it works for you (or doesn’t).

If you are going to buy something, it should be exactly what you want...it should be Custom Made

Today I am psyched to announce our investment in CustomMade.com. You can read about it here and here, but I wanted to give a little backstory on why this company and the marketplace they are building is so exciting.

I am addicted to sneakers and probably always will be. But, at the peak of my addiction, the recreational drug of mass produced kicks available at retail was not enough. In the deepest grips of my addiction, I took a deep dive into the hardcore world of custom shoes.

Working in the footwear industry, I became obsessed. I would seek out the craftsmen all over the world who could create the 1 of 1 custom footwear I needed to feed my addiction. There is magic in participating in the product creation process and getting something built just for you. The product says something about you, represents you, makes a statement that can only come as the result of a handcrafted project.  But, most people I know would never do this.  The process of creating these statement shoes was difficult to manage and very inefficient. I had to create a detailed description of what I wanted to some guy who would turn them into art. After a bunch of back and forth on the design, we would negotiate the price and I would cross my fingers and send full payment for the final product. Sometimes it worked out, sometimes it didn’t, but it was always a difficult process.

They don’t do sneakers (yet), but when I met the team from CustomMade, I fell in love. The team is building the first online peer-to-peer marketplace connecting shoppers with skilled artisans who create unique, luxury custom goods including furniture, cabinetry and jewelry.

It is a hard problem to solve, but if you can take friction out of the system and make it as easy to discover or create a custom item as it is to shop the generic stuff online, I think a large audience will never shop retail again – not just for shoes, but for all the products in our lives from tables and chairs to engagement rings, pool tables and picture frames. When a consumer can get better quality and personalization for the same price as big box retail, it becomes an IQ test, not a decision.

We were joined in this investment by a great group of syndicate partners including Google Ventures, Founder Collective, Launch Capital, NextView Ventures, Andrew McCollum and David Tisch.

The power of managing a complex transaction and creating trust for a consumer is obvious when you look at Uber and TaskRabbit, ReadyForce and Docracy. We have also seen the brand value that is built when you deliver unprecedented access to curated, high quality, personalized goods and services in Birchbox, Modcloth, KiwiCrate, Fab and Chloe + Isabel. I think the CustomMade marketplace will leverage these themes and we are excited to help the team build a leading brand in this space.

Fred had a great post yesterday about one of his portfolio companies gathering continuous feedback from the board after each meeting. I am a huge fan of gathering and measuring feedback and letting the results guide your next steps. I believe in it for product development, for corporate development (as Fred talked about) and for professional development (as in 360 reviews).

A few months ago I decided I wanted to have a more direct sense of how the founders I meet with each day, my customers, felt I was doing. What did they think of the SneakerheadVC product? Was it worth their time to sit down with me and help me learn about their business?

I said the VC product was broken for 99% of founders and began collecting feedback in a simple survey that I send people after every meeting.

Here are some results after more than 100 meetings.

VC’s are “always late” and spend some portion of the remaining meeting time describing how busy they are as a form of apology. I hate late and do my best to avoid it. As you can see, not good enough.

My sense is most investors, especially early stage investors, do not spend the time to dive into the pitch decks or summary plans prior to meeting with a company. Most meetings start with the open ended, “so, tell me what you do and give me a little background on the team…” Having spent days putting together summaries and pitch presentations for my companies, I think a meeting that starts like this is already headed in the wrong direction. With a little effort up-front I have found first meetings cover the ground of a first and second meeting and regardless of the outcome in terms of investment, I feel like I am able to be more helpful when I am more prepared. Again, still not perfect,but I am psyched to see more than 65% say I at least understood the business before the pitch and almost 20% say I was extremely prepared.

It is one thing to be prepared, another to add value. I also ask if people feel the time they spent with me, instead of building their business, was worth it. Time is a founder’s most valuable resource and if you give me an hour, I want to make sure you walk away feeling like it was well spent. It is great that most of you do, and interesting that  the percentage (4.55%) who feel it was not worth is the same as the percentage of meetings where I was late…

Thanks to everyone who spent the time to respond to my survey. I have some more data on my Net Promoter Score and the sources of my meetings that I am putting together for a future post as well as some of the free form feedback that i get in answer to “what could i do better” that is actually the most valuable part of the whole project for me.

If you have thoughts on better questions to ask or other feedback on the survey, please leave it in the comments or send me an e-mail.

So an architect, a psycho killer and an evangelical preacher walk into a VC’s office…Sounds like a decent joke, but the punch line is you need these three characters to get funded.

I have been on one side or the other of thousands of pitches and get asked about what makes a good pitch all the time. This is my attempt to answer that question. At AND 1 we pitched athletes to sign with us and pitched retailers to buy our product. We got pitched by agencies, potential partners and a few acquirers along the way. At my video game company I had to pitch investors, potential employees, retailers and partners from Microsoft and Sony to P&G and McDonald’s. We got pitched by distribution partners and content creators looking for placement in the game. Now, at First Round, entrepreneurs pitch their businesses and I pitch our platform and approach.

The Architect: Sketch something that will still be visionary in 100 years

Thousands and thousands of pitches over 13 years, some good, some bad, but none perfect…none that combined the ideal mix of clarity of vision, obsession with the problem and evangelical passion for their solution, until yesterday.

The sketch– Architectural clarity of vision

This team had a strong idea and clear vision for the brand rather than just the product, business model or distribution mechanism. Just like in design, the best ideas are things that can be drawn on a napkin. When someone asks what you are starting up, you should be able to sketch the business for them in a sentence or two. The perfect pitch starts with this sketch and gets everyone in the room leaning forward to learn more.

Psycho Killer: An obsession that lets you run through walls

The obsession – Psychotic depth of understanding

It was clear that the team had a medical grade compulsion to solve the problem and that this obsession with the consumer and the details of their experience were the foundation for every decision. As you describe your product and your vision, describe the insight that motivated the decision. The perfect pitch shows everyone that you know more about your consumer, your competition and the dependencies in your model than any sane person should and more than anyone competitor ever could.

The Evangelism– Religious passion

The Evangelical: Can I get an Amen? AMEN!

As the meeting went on, I could see the excitement in the room rising. The team was weaving emotion into the narrative and their passion for their solution was tangible. Every pitch should describe the innovations in product, distribution and business model, but as you build momentum, the best switch from pitching to preaching. The perfect pitch is not an objective business meeting but a baptism: a true believer working to convert the unwashed masses and at the end they get an amen!

Love to know if you all agree and if there are other characters that play a role in the performance that is the perfect pitch.

If you are really interested in the challenge of making a big, inefficient market more efficient or if you have spent time digging in and identified a multi-billion dollar market where capturing some small percentage of the consumers leads to a big opportunity, keep your day job. If you believe that starting a company is the shortest path to making a lot of money or if you feel good about the business because natural acquirers in the industry limit the downside, keep punching the clock.

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.

If you build a successful, design driven business you will be copied. The clones might hurt you, but distraction will kill you. To win, you have to focus on your customers and build the brand that matters in your category.

This past weekend at Y-combinator start-up school Ron Conway said, “Design and user experience are the new IP, not algorithms…”  (see the tweet here) I think this is true for a most start-ups and believe that customer centric, design driven businesses will create a ton of value by building brands in the coming years. But, because a design can be copied, this shift also means there is no way to “protect” this IP.

As more start-ups focus on design and user experience, the clones will darken the sky like locusts.

the plague is coming...

The power of (X)aaS to drive costs down and reduce the friction in getting products out to market is only going to accelerate as more elements of the technology stack are converted to commodity tools — the clones will run faster, they will multiply and generate more and more noise. These creative leeches sign up for your service, study what you have done and launch a copy. They see your pixels and your user flows.

Expect that your marketing messages, feature set, colors and fonts will all be copied. Your customers will be targeted and your brand name will be bought in AdWords campaigns. The press will compare you to the followers and imply you are the same or that your collective existence indicates a new trend. You will be furious.

Be aware of the clones, don’t be distracted. Learn from the way they tweak your model or your product, but do not pay attention. Clones copy the pages you build, but they don’t understand your customer like you do or why you made the decisions you made. They copy the result, but they don’t understand how you drive the process.

To keep the clones in your rear-view mirror, trust the consumer to know the difference. If the market is yours, own it. Be smarter. Care more about your customer and deliver more of what they love. Leverage excellence in execution and deeper passion for your product and your consumer to build the brand that matters in your category.

Investing in design is a winning strategy (AAPL)

Modern tech is continuing to make it possible to build more and more for less and less (time and money) making it easier to test your product and iterate towards consumer needs, but also easier and faster for copies to chase you. In this world of fast followers, companies that view their product (feature sets and functionality) as commodity and see design as THE way to differentiate will win.

At AND 1, we used the same suppliers and factories as our competitors and sold product through the same channels. We had to find a way to take the same rubber, foam and leather that Nike and Adidas were using and craft something that resonated more deeply with the consumer. In the consumer products space everyone embraces the design driven consumer centric thinking that builds brand because it is brand that builds loyalty and loyalty that drives value in commodity product categories.

Like any technical talent, design is a skill set. But, at my favorite companies design is also a mindset. Investing in design changes the way companies do business by bringing a primary focus to the consumer. Investing in design means valuing the design mindset in every aspect of your business. Companies that are built for design find a way to do four things really well:

1. Bring the vision holders closer to the consumer – Help everyone feel how they impact the consumer with what they do everyday. At AND 1 we didn’t just tell people to deliver the “damn factor.” We would bring them out in the market and let them see kids react to the product first hand. We included everyone from designers and developers to sales, marketing, customer service and operations so they could experience that feeling of consumer love, understand it and deliver it daily.
2. Give them the freedom to move the crowd – Empower individuals to own the experience they deliver. At Birchbox, customer service people are able to create solutions to problems as they arise rather than implementing solutions handed down to them by management. The editorial team understands the mission of surprise and delight and has the freedom to engage with their audience and drive the conversation.
3. Embrace “edit, undo” – Create a culture of individual creation and group editing where there is no ego and the best idea wins. At AND 1 our Trash Talk T’s were created by committee, but to get in the room you had to come with 5 slogans each month *that you would put in stores* As a group, we would edit to the production slogans of the month. This decision making process spread to every area of the company and created a lean forward culture of participation where the best ideas rose to the top. We got products into market for real tests and when they worked, we were right as a team and when they didn’t we learned from it as a team. “I told you so” did not exist.
4. Honor craft – Everyone (product, marketing, sales, operations, engineering, service etc) internalizes the mission of the business and then works to understand differences in priorities, approaches and process with a common goal. In my fitness gaming company we leaned on this a lot — surprisingly, the majority of game developers where not that into fitness — To bridge this gap we had developers pair up with game designers AND personal trainers. They would work together on product in the office and they would work out together to better understand the product they were building and consumer they were building the product for. This structure and the mutual respect and understanding that it supported helped us build a better product and made us a better company.

In May I wrote something about Investing in Design. Last week I got a chance to talk about it at Web 2.0. I have loved design and the way designers think about consumers since my first week at AND 1. I carried this love with me to my video game company and continue to feel it as an investor.

Here are the slides:

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.

Click here to get the app. post the coolest kicks you see today. let me know what you think

I am a sneakerhead and have been as long as I can remember. I am also a product guy and love nothing more than building cool stuff that (I hope) people will love. For the past few months I have been working with some awesome people here in NYC to build an app for sneakerheads. As an investor, I want to stay sharp by doing and this project has been really valuable. I was able to recruit a team around an idea, work to build a shared vision and be part of executing on a product from concept to launch.

The idea came out of my love for sneakers and a desire to create more products. In 2007 I started posting cool shoes I saw on the street to twitter and created the hashtag #todayskicks. Some other sneakerheads picked it up and when I went to buy the domain 2 days later, some guy I didn’t know in NYC (turned out to be Eric Friedman) had already bought the domain name – so I settled for @todayskicks on twitter. A couple weeks ago I realized there were hundreds of posts a day. No organization, but a cool little community. It seemed like a great time to build something for this audience and I reached out to Eric to get it started.

share the love

It’s called Today’s Kicks – it pulls in every image tagged #todayskicks directly from Twitter to populate the app.  Users can “love” images of cool kicks, and we built in a prominent “Retweet” button (one user who got a hold of a leaked version tweeted 29 individual photos of sneakers in less than a hour early yesterday). We are using the twitter namespace, so anyone who has sent a tweet with the #todayskicks hashtag has a page on the site with their images. When you add a photo from the app, you can also add tags that will be associated with the image/style and we hope to have pages by style at some point in the future.

Anyway, there’s more to come — pictures of sneakers are just the beginning. There is something really cool about identifying communities of passion, giving them a way to organize and accelerate communication and engagement with products they love and ultimately offer the ability to buy the “best of” based on community curation.

We are a long way from that, but I learned a ton in this effort and think every investors should find the time to build a passion product in the space where they say “no” everyday — it grounds you and reminds you how hard (and fun) it is to build. It also helps you give better advice to the companies you work with day in and day out because you are putting that advice to the test in your own efforts in real time (pivotal tracker was new to me for instance and I can’t wait to actually put money to work acquiring customers on Facebook).

I got to build Today’s Kicks with a bunch of awesome people – Amanda Peyton and Jason Gavris (who I originally met at MIT a couple years ago), Brian Kalma (former Director of UX at Zappos), Eric Friedman (Director of BD at Foursquare) and Rebecca Zhou (Techstars design genius) – it’s truly a New York City “joint effort” – and makes me love this community even more.

Check it out, get the app, post some kicks (not just your own — cool shoes are everywhere) and let me know what you think.

Back in June I agreed to get up on stage at the Lean Start-Up Ignite NYC meet-up. It was a ton of fun and probably the hardest 5 minutes of public speaking I have ever done. All the talks were great and you can see them at the Ignite Lean Start-Up YouTube channel. The next Lean Start-Up Ignite is October 27th. You should go. I am sure it will be great.

The video for my effort at Ignite is below. I called it Tilting at Windmills and the search for the next $Billion Lean Start-up. I think the lean start-up methodology has fundamentally changed the way companies are being built and investors need to adjust their strategy to fit this reality. In this world where anything can be built quickly and cheaply by leveraging modern programming languages, cloud platforms and social distribution, hyper-efficient brand building is the best path to defensible value creation. A return to the craft of start-ups and a passion for product is needed on both sides of the table and I hope to be part of this transition through the First Round Platform and our laser focus on supporting entrepreneurs as their companies grow from 4 employees to 40.

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.