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Think you’re good at networking? Think again! Properly following up (especially with a VC)

I wrote this article originally for the 24 Ways to Start blog - I encourage you to check out the other articles on this “advent calendar for entrepreneurs”, they are well worth the read.

“I use LinkedIn to keep track of my professional network, and would like to add you.”

Let me start this with a true story: Two years ago I mentored startups at Seedcamp. My group of mentors consisted of VCs from the largest European firms and top-notch technologist from companies such as Amazon and Microsoft. We ended up talking to at least 20 entrepreneurs from all over Europe. We gave each and every one our business cards. None of them followed up, nor at best send out a LinkedIn invite with the standard invite text. First I thought “…it’s just me”, but after asking my fellow co-mentors, it turned out this was true for them as well.

I was baffled – as an entrepreneur you are in the business of relationship-building (and if you think otherwise, you better rethink your approach). You should see every interaction with someone who might be helpful to you and your business as a golden opportunity. Not making use of this opportunity in the best possible way is not only wasteful, it might be the make-or-brake moment of your company.

So here it goes – my personal tips on how to properly followup.

The Why

I guess by now I don’t need to tell you that you should always follow up. No exception. If someone spends time with you, listens to you, probably gives you some advice or helps you in any other way, you follow up. A follow up is not only an act of courtesy, but your opportunity to build a long-term relationship, ask for a favor or simply say thank you. Its the good manners that your Mom taught you.

There is a ton of research which shows that people are very inclined to help you if you just ask. It’s engrained in our nature. We want to help. It makes us feel better and boosts our own ego. And on the flip-side – who wants to be the Scrooge who didn’t help someone (if asked nicely)? Finally – don’t hesitate to followup just because you think the person is too busy or too important. We are all humans – we all work the same.

The How

Now that we’ve established that you always follow up – make sure you follow up properly. Send a short email thanking the other person for his/her time, and do ask for something specific. Yet think about keeping your early demand small, you don’t want to overburden your newly established contact. Remember, always ask – it’s your golden opportunity to build a working long-term relationship.

This is all pretty much a no-brainer, right? And people seem to grok it when it comes to email (minus the “ask for something” part). But once you get into the wonderful world of social networks, all this seems to fall apart. Never (and I mean never) send out an invite on a network such as LinkedIn using the standard invite text. The signal you are sending me by doing this is: You are not worth the time for me to change this text and I just want to connect with you to add you to my collection. In my eyes this is one of the biggest mistakes you can make, and a surefire way for me to permanently ignore you.

Here’s how you do this properly – don’t leave the standard text in there, write a short, personal message which sells the other person on the idea to connect with you. This is usually best achieved with a small ask – e.g. “I would love to stay in touch with you and ask you every once in a while (not more than once every couple of months) for your advice on XYZ”.

The What’s Next

Don’t trick yourself into believing that it ends here and all will be good. This is only the beginning – granted you got it of a good start, but now you want to mature your relationship (think long term, not short term again — no-one likes to feel used). Send an email every once in a while, pointing out some interesting news or research which is relevant for your contact. Ask for the occasional coffee to compare notes. Get creative and add value for the other person – trust me, it will pay back twice over.

With that being said – go and network. Make new friends, allies and partners. Don’t be shy. Ask for help. And always follow up!

Never Walk - A talk about entrepreneurship and running

Part 1 - Roger

This is one of the most inspired moments in the history of athletics: Roger Bannister crossing the finish line on 6 May 1954 during a meet between British AAA and Oxford University at Iffley Road Track in Oxford, United Kingdom, where he became the first human to run the mile in less than four minutes. An extraordinary achievement which was, at the time, considered impossible. Seeing the picture of Roger crossing the line gives me goose bumps. Each and every time. This picture evokes so many emotions in me - in a lot of ways it’s the perfect capture of the perfect moment.

But we are getting ahead of ourselves. For now - keep Roger in mind, we will meet him again later.

Reaching the finish line, never walking, enjoying the race. These three, in this order, are my goals.

Haruki Murakami

This presentation is a story about running, running a business and running through life at large. And how all these things can be treated the same. A story about lessons learned. A story about failures, perseverance, winning and the sheer joy of accomplishment - large and small. And it is a story why we should never walk in life.

Let’s get ready… toe to the starting line.

Part 2 - A True Story

We embrace pain. Pain is the purifier.

Runner’s Proverb

In 2008 I found myself with pretty severe depression. A condition and feeling which I never experienced before. I felt helpless. I didn’t know what to do. And I didn’t know how to get out of it.

Over the course of some months I first talked with friends and family and tried to fix it myself. Thought I could figure out what it was, mend it and move on. But it didn’t work.

Eventually, I knew that I needed help. So I searched for help. And found a fantastic therapist. She worked with me through a lot of issues in my past - but more importantly she asked me why I stopped doing sports years ago, having spent most of my youth engaging in one sport or another. I didn’t know the answer. Life just got in the way.

My therapist asked me which sport I enjoyed most. The answer was immediately clear to me - running. Running is primal. It’s hardwired into our brains. Humans are born to run.

So I started running again. I ran for life. For my life.

About 10,000 miles later, after endless hours on the roads and trails in every place I lived & visited ever since, running with and without company - I learned something. I learned that the fundamental lessons which running taught me, hold true for running a startup. And running through your life.

They are the essential rules for any entrepreneur. They are the essence of living life. At least if you want to do the impossible - and break your own four minute mile.

Three - Ten Principles

Somebody may beat me, but they are going to have to bleed to do it.

Steve Prefontaine

Train hard. There is no way around it. It’s the foundation. Everything else will depend on it.

When I built my first startup, fresh out of university, I didn’t know anything. I had a huge ego and thought that I knew everything there is to know about building and running a startup. But I didn’t. I went into the race without training. It was ugly. I learned on the fly - which is fine. But I had people rely on me. And they suffered from my level of unpreparedness.

Train hard. If you want to race, you need to pour your heart and soul into the preparation. This is where races are lost and won.

Make sacrifices. Emil Zapotek is one of the greatest runners of all times. Emil wasn’t terribly talented or genetically gifted to run. But he made sacrifices. More than anyone else. And he won.

Building a startup requires huge sacrifices. I slept on the floor in my company when I worked through the night. I blew up a long-term relationship. I lost friends as I didn’t have the time to see them anymore. My first startup was a financial disaster. It was a sacrifice which, in the end, made me a better entrepreneur. And my following ventures so much better.

Make positive choices. Your life will be full of decision making points. Make sure you choose wisely. Choose the ones which will have a positive impact on you.

I made a choice in my startup which I paid dearly for - against my gut I chose the investor with the better term sheet. I wanted the money. When the company went downhill, it turned ugly. I didn’t make a positive choice - and paid dearly.

Seek your potential. I recently read that, unless you are an ultra-elite runner, you always have the ability to run faster. Always. I believe this is true for everything we do. Only very few people tap their whole potential.

Seek out your potential. Figure out what you’re good at and get better at it. Don’t waste time getting mediocre at something you’re bad at. It’s not worth it. I learned so much about myself doing startups, working at big, fast-growing companies and helping other entrepreneurs. I think I know my strengths now - and I am sure I haven’t reached the limits of my potential. Keep pushing. Become Muhammed Ali.

Set high goals. Remember Roger? When Roger set out to break the four-minute mile, people believed that the human body will never be able to run that fast. Doctors were of the opinion that the heart will explode if you run that fast. And despite all this, Roger knew that it was possible - he set his goal that high. And only weeks after he broke the four-minute mark, a handful of other runners broke the same barrier. The barrier was was only in their heads.

You can’t change the world if you don’t set out to do so. Be bold. Dream big. Who would have thought that we can put a man on the moon? Or that a little social network for Stanford students can become the largest website on the planet?

Relax under pressure. Look closely at Shalane Flanagan’s facial expression on this photo. Shalane is the world-record holder for the 3000m. And she is completely relaxed and in the zone while racing.

You can’t perform to the best of your abilities if you are tense. You will annoy the people around you. I know - I was tense when I did my first company. I yelled at people. It wasn’t nice - and it didn’t help. Learn to relax under pressure. Breathe deep - it will help you.

Attack pain. Pain is inevitable. You will feel pain. You can choose to let it dominate you or choose to attack it, ignore it, grind through it. At the end pain is just a neuro-signal. You can will your way through it. Pain is the purifier. Be Arnold.

I can’t count the amount of times I came to a point where I just wanted to stop. Wanted to give in to the pain. Or just take a break. Both in running, life and running my businesses. Ignore the feeling. Grind through. It’s just a neuro-signal. If its worth it – push on.

Push the pace. Go out and don’t hold back. Don’t be the guy who races in the shadow of others and tries to sneak by on the last few meters. Keep on pushing the pace. Steve Prefontaine to this day is the most courageous of runners in the world. He kept pushing the pace. Always.

You chose to start a company. Now do it properly - with every fibre of your body, continuously pushing the pace. Be bold. It’s the only way to succeed as a true leader.

Work as a team. Running looks from the onset like a very solitary sport. It is not. Roger had two good friends pace him through the first two and the third round of his four-round record run. Your team is everything. Without them you are nothing.

Embrace the spirit of the team in your organization. There is no room for anything else - you have to work as one, for a common goal. Even the brilliant Steve Jobs couldn’t make things happen without his team.

Run to win. History has it that Pheidippides died after reporting the Greek victory over Persia in the Battle of Marathon to Athens. Treat the marathon with respect. Run to win. Every time.

Don’t get into business if you aren’t in it for the win. And do what it takes to win. Honor Pheidippides. And run like Usain Bolt.

Encore - Two More

I’m going to work so that it’s a pure guts race at the end, and if it is, I am the only one who can win it.

Steve Prefontaine

Defeat the wall. When you run a marathon you will hit the wall. After 21 miles of running your body simply runs out of glycogen and wants to shut down. This is the point where your will is tested most. You push through it. You force carbohydrates into your body although your stomach started cramping up at mile 15. But deep down you always knew - it is possible. So you persevered and set one foot in front of the other. Repeat. And repeat.

In every venture, I hit the wall. There always was the day when I didn’t want to get out of bed. Where I just wanted to throw it all down the drain and give up. Persevere. Get dressed, get to work, get going. Force yourself through it. It won’t last. You can defeat the wall.

Relentless Focus & Boring Consistency. Running is all about spending hours and hours doing the same thing - runnig. You need to have laser-sharp focus and be consistent. There is no way around.

In your company there is nothing more important than making the main thing the main thing and then executing on it. It’s not flashy & glamorous - but it is how you will get to your goal. I ignored this piece of advice in my first company. I kept chasing the next new thing. And failed.

Again

1. Train Hard
2. Make Sacrifices
3. Make Positive Choices
4. Seek Your Potential
5. Set High Goals
6. Relax Under Pressure
7. Attack Pain
8. Push The Pace
9. Work As A Team
10. Run To Win
11. Defeat The Wall
12. Relentless Focus & Boring Consistency

One Rule

The man who can drive himself further once the effort gets painful is the man who will win.

Roger Bannister

The first rule is actually the first and second rule of everything you do.

If you don’t have a big, fat grin on your face when you run, don’t do it. Have fun while you’re out there. It is your race.

Remember

Nach dem Spiel ist vor dem Spiel. — After the game is before the game.

Sepp Herberger

The only good race pace is suicide pace, and today looks like a good day to die.

Steve Prefontaine

NEVER WALK.

You are hosed. But do it anyway!

I recently sat down with a good friend to go through some stats which show the harsh, ugly truth of Angel/Seed/VC funding. It essentially goes like this:

In the first half of 2011 there were about 175,000 startups looking for early stage investments in the US (note that this number is not limited to tech). Out of those, a mere 26,300 received angel and/or seed funding - that’s only 1 in 6.5 (or a 15% yield). Kinda scary if you’re in the position of looking for money. But it gets even scarier - out of the 26,300 startups which received angel and/or seed funding only 7% (a total of 1,850) received series A funding (aka institutional funding from a VC firm). Putting this together - your chance to receive institutional capital is pretty much exactly 1%.

Now - what that tells us is: Your chances to receive funding are slim. You could assume that you’re hosed. But fret not - first of all: There are 1,850 startups which get funding all the way to series A (and are thus well on their way to be successful - at least the odds are stacking up). And probably more importantly - focus on building a product people want to buy - that way you don’t need funding. Or can take funding for accelerating your growth instead of building your product. Which is the best way to do the VC dance anyway - as your leverage is much, much better.

So my friend - fret not! Go, build an amazing product which people love and are happy to pay for. And you will be fine! :)

Entrepreneurs/Students at Mozilla

Last year (jeez - is it really 2012 already?) I had the great fortune to host a bunch of entrepreneur/student groups from all over the world here at Mozilla.

I simply love interacting with entrepreneurs - especially when they are young and/or first time entrepreneurs. The energy is boundless, there is nothing holding them back and they have no fear. One thing which stood out for me was the fact that all these groups came from places outside of the US - essentially they came to the Valley to expose themselves to the culture, DNA and vibe which make Silicon Valley what it is. A truly unique place on earth.

Which brings me to my one advice for entrepreneurs (if you’re not in Silicon Valley anyway) - get the cheapest flight, the cheapest hotel and expose yourself to a couple of weeks of Valley craziness. It will change the way you see the world.

On that topic - The folks from Pioniergarage wrote up a nice summary of their trip to the Valley including a short video interview with yours truly. Enjoy!

And if you are part of a group of entrepreneurs coming to the Valley to visit - ping me and we’ll host you here at Mozilla and talk about some of my favorite topics such as “How you can win when you’re small”. :)

Cashflow matters.

If there is a single thing, a single activity and a single metric you should care about when building a business (or a sustainable open project - which you should run like a business anyway), it is cashflow.

Cashflow is simple: Money in minus money out. If your cashflow is positive your business lives, if your cashflow is negative your business dies. Simple as that.

Yet I am befuddled by the lack of understanding for this essential fact of business. I literally haven’t had a single discussion about the actions which lead a particular business to get to positive cashflow or even the notion of cashflow with any of the many startups I’ve met over the course of the last couple of years. It seems that Silicon Valley’s obsession with growth and the vague notion of “we’ll figure out the business model later” led to a culture of people building companies with the single goal of selling them. And as Silicon Valley culture spreads throughout the world these days, founders all around the globe follow suit.

I cannot stress enough how important it is to get to positive cashflow as soon as possible. Unless you’re the next Facebook/AirBnB/Name-your-preferred-hot-startup and swim in heaps of venture capital (which to be honest you most likely won’t be - the cards are clearly stacked against you… just look at the stats) having positive cashflow means you are master of your own destiny. Cashflow puts you into the driver seat. It allows you to do the things you want to do. And even if you want to raise money to accelerate your growth it puts you into a position of power, not one where you need to beg for money.

So - unless you want to build your business as an acquisition target (nothing wrong with that - just know that the odds are heavily stacked against you) but want to build a business which lasts, read up on cashflow, understand the principals by heart and make it one of your key objectives!

And to that end - we’ll make cashflow discipline an essential part of Mozilla’s WebFWD program. Time to build the next crop of 100 year organizations!

P.S. Here’s some recommended reading for you - Don’t Build A Company To Sell, Build It To Last by Kanyi Maqubela and anything you can find by Norm Brodsky (a columnist at Inc Magazine), e.g. this piece on cashflow.

Quote of the Day

I don’t deny that it’s easier, cheaper, and less risky to put up a website than it is to open a store, manufacture products, or provide a service to customers. At the same time, however, driving traffic to a website and turning visits into sales are other matters. Few of the would-be Web moguls I meet have figured out how to do these things. Most, I suspect, never will.

Norm Brodsky on the New Breed of Entrepreneur in Inc. Magazine

Read the article - Norm has a point.

Pitch 101

All you need to know about pitching your startup. Seriously.

…and don’t forget to read Guy Kawasaki’s “Art of the Start”.

Mozilla for Entrepreneurs

For quite some time now I find myself talking to entrepreneurs all over the world about the lessons we learned here at Mozilla, turning the unlikely contestant Firefox against all odds into a hugely successful product used and loved by millions of people.

I believe that our story holds a couple of key concepts which are highly applicable for startups of all colors. In the past I have used a modified version of John Lilly’s excellent “7 Lessons from Mozilla” deck. Over time I added a couple of lessons of my own - partly based on my work and understanding of Mozilla as well as personal experiences in the world of startups, venture capital and mentoring a ton of startups through programs such as TechStars, Seedcamp or The Unreasonable Institute.

The following deck is a first pass at uniting all those experiences and influences into a coherent deck. What do you think? What’s missing? What doesn’t make sense? What’s good and terrible?

about:me

Last week I was invited to speak at Stanford’s E-Bootcamp event about… myself. The invitation to the event read:

The event will feature 100 of the best entrepreneurial students around the world and over 50 of the most successful and inspiring Silicon Valley leaders. As an E-Bootcamp speaker, you will share your personal story and entrepreneurial spirit with our student participants. You will give two 20 minute presentations to two different groups of 10 students, leaving 10 minutes each for questions and answers with time for transitions. I believe the students will be excited to learn about your personal experience and insights from having worked at Mozilla and other startups.

It was an intriguing and interesting experience. Usually, even if I talk about my career and the lessons I learned along the way, I weave this into a broader discussion about some aspects of creating and running a business.

I decided to do a quick screencast to record the talk - probably it’s interesting for you. You can find the slides on Scribd as well.

Mozilla for Entrepreneurs

My dear friends at Pollenizer recently asked me if I could write a guest post on their blog discussing the lessons we learned at Mozilla, which are particularly interesting for entrepreneurs and startups.

Head over to the Pollenizer site for the article and do let me know what you think of it!