Steven Cox - Founder of TakeLessons. Build Something You're Proud Of

Steven Cox Interview on Fox 5 News - Finding the Right San Diego StartUp Company to Work For

 

 

http://StevenCox.com. Even with the unemployment rate in San Diego hovering around 10%, the city's startup scene is bustling with activity and creating new jobs for San Diegans. TakeLessons.com CEO, Steven Cox, talks about the 10x100x100 event where 10 startup companies that have collectively raised over $100 million in venture capital and will be hiring 100 new employees next year.

A lot of technical and web people move to the San Francisco area to find work, but you're saying there's work right here and they don't have to move?
• That's Right!
• Cheaper to buy and rent housing here than in other hotbeds such as SV, NYC.
• A lot of startups are hiring

What's it like working for a startup?
• Incredible! Faster pace. Quicker decisions. My startup: http://TakeLessons.com

For College Graduates:
o Instead of making coffee, make a difference.
o No cogs in the wheel
o Chance to work on things at a young age -- (BEST BUY example)

For Senior people
o A chance to take your knowledge and build something you're proud of.
o Make a positive, lasting impact.
o Grow leaders underneath you.
o Potential stock upside

Everyday, I wake up thankful that I get to go to work.
o Focused on building the new sort of company.
• A company with a conscious.
• A company that makes more than money, it makes a positive difference.
o Awesome people all focused on building a great company.
o Super laid-back dress code.
o No politics.

A lot of young Internet companies didn't make it in the dotcom crash. What should a job prospect consider when looking at startups?

Not all startups are created equal.
• Management -- is there adult supervision? People who have built and ran companies before.
• Culture -- Do they have a strong sense of purpose, yet flexible enough to change on a dime.
• Funding -- are they well-funded. http://CrossLinkCapital.com
• Product or Service -- is it something that truly adds value to people's lives?

What type of jobs do startups hire for and what tips do you have on landing a job there?
• Big focus on Software engineering, product management and developmet, IT
• Marketing, Sales, Customer Support, Finance, HR

Tell us a little bit about the 10 x 100 x 100 event.
• StartupsAreBetter.com
• 6pm Dec 1 at Sweet Labs (http://sweetlabs.com)
• Joe Kraus -- Google Ventures focused on mobile, gaming, local services
• Michael Robertson -- SD Local tech hero. MP3.com
• Focused on engineering and product talent

More information can be found at these sites:
http://10x100x100 and http://StevenCox.com

What's it Like Working for a Startup?

Come find out this Thursday December 1st!

Our friends at SweetLabs have banded together with ten top San Diego startups (including TakeLessons) that have collectively raised over $100 million in venture capital and looking to hire for 100 new positions.

Visit this site to register.

Why are we doing this?

We want to get the message out that you don't have to move to the Bay area to find an awesome job!

San Diego tech startups are creating new jobs right here in our backyard, in the midst of one of the worst economic times we’ve ever seen.

While big companies (i.e. HP laid off 500 San Diego employees last month) continue to struggle, local entrepreneurs and innovators have been able to build disruptive startups, secure funding, and create new jobs.

We’ve joined forces for this event with 9 other startups who have collectively raised $100 million in venture capital and have created more than 100 new jobs for San Diego. 

 San Diego’s not only a great place to live, but a great place to innovate. We’re shining a spotlight on the local technology startup community.

We all know that San Diego is the best place to live, and we want to show Silicon Valley and the rest of the world that you don’t have to sacrifice quality-of –life and settle for congested freeways and bad weather in order to work for an exciting, life-changing company that’s on the cutting-edge.

People think of San Diego as strictly a biotech town or a military town (or a lazy beach town) and assume that only interesting technology companies are in Silicon Valley. But in fact there are a number of great, innovative startups in San Diego doing really interesting things.

At SweetLabs, for instance, they’re re-inventing the PC by bringing the modern app experience to the desktop, so that anyone can enjoy services like Facebook or Twitter or Groupon with the same ease and elegance they enjoy on their mobile devices.  They have a great group of investors led by Google and Intel, and plan on doubling their staff over the next twelve months.

 BrightScope helps you make critical (yet too often confusing and ignored) financial decisions, such as retirement plans and wealth management.They are led by a great group of people and will be adding new people next year.

Here at TakeLessons,we're the nation's largest music lessons company, and provide the leading online platform for connecting anyone who wants to learn music with safe, certified music teachers. Backed by Silicon Valley venture capital heavyweights, CrossLink Capital (think Pandora) and SofTech Ventures (Twitter, Facebook, Groupon), we're building our teams in tech, sales, support, marketing, and product development. We're currently at 75 people and plan on adding 60-75 new people next year. 

Deal Current Network is the fastest growing white label daily deal software provider in the US and Canada. Deal Current provides deal software, deal inventory, deal distribution, and expert training to over 200 publishers. Their goal is to be the largest deal distribution network in the US in 2012. They are hiring for positions immediately.

Related articles

• Upcoming Events for San Diego Start Ups (stevencox.com)
• San Diego Tech Startup Launch Quickpitch Event (stevencox.com)
• Music Lessons Start Up Wins $20,000 (prweb.com)
• Intel Capital Leads $13M Round for SweetLabs in Bid to Re-Invent Desktop Experience (xconomy.com)
• Job growth is dependent on Start-ups (kauffman foundation)

Mary Meeker's internet trends presentation at Web 2.0 Summit

Mary Meeker, one of the most interesting forecasters, gave a presentation on her view of where the internet is going.

A stat I found fascinating is that ecommerce makes up less than 10% of the total pie. That means there's still a long way to go before we reach an equilibrium point. When you consider that services, as an industry, is far behind products when it comes to online commerce, it bodes well for companies like TakeLessons, Limos.com, Kitchit, and othes that are looking to create service brands that customers can trust.

I believe we're still in the early days of Service Commerce for the web and mobile.

Complete coverage at VentureBeat

Download Mary-Meeker-Internet-Trends-2011

 

 

 

Register for The Art of the Startup

From our friends at CONNECT:

CONNECT FrameWorks Workshops present The Art of the Start-up

Program Overview:
For entrepreneurs, deciding to form a company, or become involved with a start-up, presents enormous challenges. Navigating around legal, fund raising and other issues can often seem overwhelming, and traps for the unwary or uninformed are numerous. However, successfully avoiding the most common pitfalls made by entrepreneurs can make a significant difference as to whether or not a company is fundable, the sources and types of capital that will be attracted, who controls the company, the economic impact on founders upon exit, and a company’s likelihood of success. In this interactive half day workshop, Roger Rappoport will discuss these and other issues in three interactive sessions.

What you will learn:

• Start-up Issues Generally—including, choices in entity selection; an appropriate capitalization table, including how much stock to set aside for employees, consultants, board and advisory board members and the perils of Section 409A; Founders’ issues, including amount and allocation of founders’ stock (including Series FF Preferred Stock), vesting, assignment of intellectual property, employment/consulting agreements and more;

• Developing and Executing the Right Funding Strategy—including a discussion related to seed, angel and venture capital funding, appropriate funding instruments for each round, including the pros and cons of selling equity, convertible debt, and venture debt; selecting, and gaining access to, the right funding partner; and valuation, and things to do to increase the pre-money value of the company.

• The Anatomy of a Term Sheet— a brief discussion on the anatomy of the term sheet, including, understanding the structure of, and the provisions that will most likely be included in, a convertible debt and venture financing term sheet; how to arrive at a realistic pre-money valuation; the economic impact of certain terms on existing shareholders; the provisions that affect the degree to which current founders and management will have to relinquish control of major and/or day-to-day decision making; and the most recent trends relating to liquidation preferences, participation rights, anti-dilution provisions, pay-to-play provisions, redemption rights, registration rights, rights of first refusal and co-sale rights, and more.

Who should attend:

Founders, CEOs, and managers who are looking to start a company and develop and implement a funding strategy or are seeking funding, as well as scientists and technology experts considering a business start-up in need of financing.

Event Details:
Date: Wednesday, September 14, 2011
Time: 8:00 a.m. – 11:30 a.m. (Registration begins 7:30 a.m.)
Location: Sanford - Burnham Medical Research Institute
10905 Road to the Cure
San Diego, CA 92121
Note: A light breakfast will be provided for participants.
Contact: Linda Wells
Email: lwells@connect.org
Phone: 858-964-1319
Fees: Pre-Registration $45.
At the Door $65. (subject to availability)
*Registration will close on or before September 13.

Register Here

Related articles

• 5 Ways To Raise Funds for Your Startup (mashable.com)
• The Startup Factories, How Incubators Are Shaping Entrepreneurs [Report] (vccafe.com)
• One Book Every Entrepreneur and VC Should Own (techcrunch.com)

How are you going to make a profit in your startup?

Image via Wikipedia

I read an interesting post from Mark Cuban today on the problems of startup success using a free model. Back in the 90's when I was cutting my teeth around web/tech, the mantra we heard from VC's was "get big fast", and "eyeballs are everything", and "don't worry about making money, we'll fund you", and "you can get a higher valuation if you're NOT producing revenue".

All of these statements seemed odd to me. I do understand the value of first-mover advantage, but what are we in business for if we can't focus on providing value that people will pay for?

Mark argues that the company that is successful on being free will feel the need to continue to build bigger infrastructure and hire more people because the next 'free' thing is right around the corner. This means they never learn to be lean and protect themselves in downturns. In order to stay competitive with the next free thing, they'll spend too much money and lessen their ramp time. 

"The more success you have in delivering free, the more expensive it is to stay at the top. The more success you have, the more important it is to management to remain successful.  The more important remaining successful is to management, the more money they will spend, the more chances they will take, the more infrastructure they will build, the more people they will hire.  All of the things that will prevent them from staying lean, mean and flexible. All of the things that distract them from innovating within their core competency."

I live in downtown San Diego, and across the street from me, a new restaurant just opened. Based on a reliable friend in the local restaurant scene, I know they spent a total of $2.5 to $3 million to open the doors. This is about the same amount of money raised by a web quasi social networking company I'm familiar with. The difference is that starting day one, the restaurant had customers lined up willing to pay $50 - $75 for it's service. The web company, now two rounds of financing and three years into it, is still not charging for their service, and I question whether they have anything that people will actually pay for. Now that they've done a series A and B, I doubt if the founding team even owns the majority of their company. Thus, the entrepreneur has locked himself into a job.

(As a side note, I absolutely believe in raising money for growth. Once a model has been proven, it makes sense to accelerate the earnings, and normally, this takes additional capital. The difference is that at this stage, the company has been given the task of figuring out customer demand and iterating their model quickly. Those that succeed are able to find the model that works and begin to place their efforts towards amplifying their processes.)

I just have a different way of looking at things. I speak to entrepreneurs all the time that want in the game simply to cash out. There's more thought to the exit than there is to service needed to provide the exit. It's rare that I hear them say, "here's the value I provide to my most loyal customer". Just like in the 90's, it doesn't make sense to me.

Unless you are starting a company for the sole purpose of flipping it, it is my belief that the company should have a clear revenue model rolled out soon after launch. This means you may have to build slower and have to execute on a customer-centric strategy. The revenue generated will give you a longer launch-pad and the company that you've toiled and sacrificed for will remain in the hands of the people most passionate about its success.

San Diego Tech Company MojoPages on $5mm raise

Congrats to our friends over at Mojo Pages on a new $5mm raise. I believe their enhanced model of providing a white-label solution to news sites is timely and needed. Jon Carder and the team have been working hard on the site for a few years and this vote of confidence is a good sign for the company and the San Diego tech scene.

MojoPages Raises $5 Million For White Label Local Business Search Engine

Top 100 Most Connected Venture Capitalists

From Techcrunch - here's a list of the top 100 most connected VC's. Did yours make the cut?

Here are the top 10:

1. Draper Fisher Jurvetson
2. Sequoia Capital
3. Accel Partners
4. Intel Capital
5. First Round Capital
6. Dag Ventures
7. New Enterprise Associates
8. Kleiner Perkins Caufield & Byers
9. Benchmark Capital
10. Ron Conway

Whom You Know Matters: Venture Capital Networks and Investment Performance -

Seeking Venture Funding? Have a Clear Understanding of your Financials

Recently, I've discovered the blog of Robert Ochtel. He's an author and a serial entrepreneur with over 25 years experience. He's also raised over $50 million for his businesses, and started VentureBlue, a national Angel network. And, he's just up the road in Carlsbad, CA.

Robert wrote a post explaining why entrepreneurs should be comforatble and intimately involved in the company financials. Most VC's hail from business schools and if they have not ran a company themselves, they do know how to analyze financial statements. So it becomes paramout that the entrepreneur be able to explain the projections and the assumptions underlying them.

Image via Wikipedia

Don't defer your financials to someone else. You can have mentors help you with it, but it's important that you, as the CEO, understand the key variables that shape your business. By doing so, you can understand why your projections were off (which, in most cases, they will be).

"When presenting to venture capitalists, the CEO of your start-up company needs to be an expert in all aspects of your company, including its financial statements. It is not a good idea, as the CEO of your start-up, to defer the financial statement related questions to your CFO or another third party. As the CEO, you are the one where the “buck stops”, so venture capitalists expect you to be able answer any and all questions regarding your start-up company’s financial statements. Therefore, as an entrepreneur you need to study your company’s financial statements from an investor’s point of view, including being able to recite the underlying assumptions of your financial statements. If you cannot do this, you will not get far with the venture capitalists and your ultimate goal of securing funding."

Read Robert's post here

Related articles

• Being an Entrepreneur in the Great Recession (unionstreetmedia.com)
• Venture Capital: It's a Downer (blogs.wsj.com)
• Entrepreneurial DNA: Do You Have it? (blogs.harvardbusiness.org)

Do Web Entrepreneurs Still Need Venture Capitalists?

Image via CrunchBase

There's an interesting article and comment thread going on over at the New York Times on whether web entrepreneurs need VC's like they did ten years ago.

I see both sides of the argument. It's true that costs to build have plummeted, and a couple guys can knock out an iPhone app in a couple weeks. But, to scale in a consumer-centric offering where there is competition, it takes money. And the worst thing you can do is build up a team, launch a product, and not be able to see it to fruition because you don't have the cash necessary to build a following.

There's a hotel being built near my home (I live in downtown San Diego). It has taken them over a year of building - and I'm sure at least and additional 1-2 years of planning - just to get the place where it can produce revenue. In contrast, the city threw up a giant tent for housing homeless people in about two weeks. Do you see the difference? One has much more revenue potential - and that one also requires more capital.

"As the cost of starting a Web company decreases, thanks to cloud computing services and technology that entrepreneurs can rent instead of buy, many founders can finance a new company without the help of venture capitalists, using their savings, money from family and friends and credit card debt, Mr. Hendershott writes. More often, they are choosing to sell small, immature companies instead of taking the longer, riskier path of developing a business that could one day go public. That makes venture capital less relevant, he concludes.

“Potentially, the venture model for finding, developing and vetting new Web-based businesses breaks down,” he writes.

The venture capital model evolved to start and expand capital-intensive semiconductor companies. “Without resources beyond the reach of most entrepreneurs it simply wasn’t possible to create a new semiconductor company, or even an Internet company,” Mr. Hendershott writes. Now, Web start-ups are routinely started for less than $50,000.

One of the key roles of venture capital, Mr. Hendershott argues, is providing the money needed to prove that a new technology works and that a market for the technology exists. During this period, start-ups rely on outside capital because they are not making any money for themselves.That period may no longer be necessary."

 

Read the whole article here.

Need a Venture Capital Term Sheet? Here's a FREE One.

Image via CrunchBase

For all my fellow entrepreneurs: Here is a FREE term sheet generator for equity invesments. This tool will generate a venture financing term sheet based on your responses to an online questionnaire. Sponsored by Wilson Sonsini Goodrich & Rosati, one of the the premier legal advisor to technology and growth enterprises worldwide.

From the site:

This tool will generate a venture financing term sheet based on your responses to an online questionnaire. It also has an informational component, with basic tutorials and annotations on financing terms. This term sheet generator is a modified version of a tool that we use internally, which comprises one part of a suite of document automation tools that we use to generate start-up and venture financing-related documents.

Because it has been designed as a generic tool that takes into account a number of options, this version of the term sheet generator is fairly expansive and includes significantly more detail than would likely be found in a customized application.

WSGR Term Sheet Generator