To celebrate our 100th episode, Raul Rosa and I curated snippets from various interviews that illustrate particularly valuable lessons in entrepreneurship. Below you will find a list of the full episodes next to the name of the guest cited.
Starting at the launch of the 100th episode it will also be possible to search for content on our website based on a list of topics, some of which I list below.
Full transcript of the episode
Focus:
1. Michael Mark – Click to Listen to the Complete Episode
2. Jean Hammond - Listen to the Complete Episode Here
Selling
3. Tivan Amour - Listen to His Origin Story - Listen to His Remarkable Pivot Story
Raising Money
4. Ben Littauer- Ben's Full Episode - Even More Ben
5. Alice Lewis - Alice's Full Interview - Alice's Clever COVID Pivot
6. Sal Daher - Sal's Origin Story - Secrets of Fundraising - More Secrets of Fundraising
Returns
7. Howard Stevenson - Building Your Wealth
Boards
8. Michael Mark - More Michael Mark
9. Bettina Hein - Bettina's Origin Story
10. Christopher Mirabile and Adam Martel - The Full Episode - Christopher Mirabile Origin Story
11. Joe Caruso - Joe's Origin Story - Irresistible! - Joe Caruso on Startups & COVID
Co-Founders
12. Ed Roberts - The Full, Glorious, 89-minute Ed Roberts Experience - Awesome!
13. Chuck Eesley - Chuck's Full Interview
14.Nell Meosky Luo and Dan Toffling - The Full Interview
15. Ed Goluch - Ed Goluch's Full Interview
16. Russ Wilcox - Russ' Origin Story
Product
17. Chris Savage & Brendan Schwartz - The Whole Brilliant Interview
18. Sam Bogoch - The Sam Bogoch Origin Story
Discovering Entrepreneurship
19. Gillian Isabelle - The Complete Interview with Gillian Isabelle - Compelling
20. Larry Sullivan - The Full Journey through Larry's Amazing Career
Transcript, “20 Lessons from 100 Episodes”
Sal Daher: Welcome to Angel Investor Boston.
Hi, this is Sal Daher. Welcome to the 100th episode of the Angel Invest Boston Podcast. I created this podcast as a tool to make me a better angel investor and it also serves as a tool to help you become better as an investor and as someone who is building a company as a founder, or someone who works at a startup. The 100th episode is different from all the other episodes we had before in that it's a compilation of some really interesting lessons that I've drawn from these conversations that I've had with some fantastically capable people that included angel investors, venture capitalists, founders, scholars, attorneys, scientists.
So, I invite you to think of Angel Invest Boston as a learning resource and this 100th episode also serves as a way of highlighting the restructuring of our website, angelinvestboston.com. Instead of it being a list of various episodes, it is now categorized by various areas. For example, if you want to learn about focus in a startup, you can look up that topic. If you want to learn about co-founders, such an important thing. If you want to learn about fundraising, you can look that up. I invite you to take another look at our website and use it in a new way, and I'd love to hear back from you, what you think of the new arrangement. So, sit back and enjoy the 100th episode of Angel Invest Boston.
Focus
1. Michael Mark – Click to Listen to the Complete Episode
Sal Daher: Michael Mark is a super angel in Boston. He's invested in hundreds and hundreds of startups, has had some fantastic exits. He's been doing this basically his whole life, since he graduated from MIT when he started his first startup. He's been in the startup world ever since. Knows tons about startups, and he's my mentor, so I invite you to listen to Michael Mark talking about focus in a startup.
Sal Daher: I want go back a little bit to what you said about not trying to run two businesses because I've heard you many times, ask questions in this direction when we're doing diligence with startups and saying which business are you guys in? Are you in this business and that business? Can you expand a little bit on this importance of focus on that? How did you feel it when you were juggling two businesses?
Michael Mark: Well, we like all the other startups that I run into, we had rationales for why we had to do two businesses. In our case it was we had to build the clinical laboratory systems around the IBM 1130 because IBM was going to sell it for us. But the IBM 1130 was the wrong computer to use, it didn't have the resources we needed. We had to add equipment to the IBM 1130 at the same time we were automating clinical laboratories, so we had a rationale. The problem is that it's very hard to be successful in a company and it's doubly hard to be successful with two companies and when you have two companies that are interdependent on one another, they both have to be successful for you to be successful. You're truly asking for trouble, so find a way at the very beginning to avoid that situation.
Sal Daher: Okay. I guess, that's advice for the board at Twitter.
Michael Mark: They need more advice than that.
Sal Daher: No doubt.
2. Jean Hammond - Listen to the Complete Episode Here
Sal Daher: Jean Hammond is a super angel in Boston. She was the motive force behind funding Zipcar. Here is Jean Hammond on focus.
Sal Daher: Is there some advice that you find yourself giving to people all the time that you wish you could just put a little blue card and you hand out to founders?
Jean Hammond: Focus, focus, focus. If you're trying to do too many things, none of them will get done. In fact, my lead investor in Quarry said that to me. I said and the third thing we're going to do, and he said what? I've been around startups a long time, Jean, and I know there's the first thing and I know there's the second thing, but I'm not sure that I've ever heard of a third thing.
Sal Daher: No matter what it is, there is no third thing.
Jean Hammond: So really, helping to focus and focus on the right things.
Selling
3. Tivan Amour - Listen to His Origin Story - Listen to His Remarkable Pivot Story
Sal Daher: Selling is essential in everything that you do in your startup. Nobody addresses the value of selling better than Tivan Amour. Tivan is an extremely founder who I have interviewed twice on the podcast, and this clip is from an early interview where he’s talking about his founding story and how he got started and he has as really outstanding presentation of the art of selling. The art of convincing people. Here is Tivan Amour.
Sal Daher: What role did working as a sales associate at AT&T, what role did that play in helping you decide the future course of your life?
Tivan Amour: So, I don't think I realized it at the time, the foundation that it was giving me. During school, it was more of a necessity. I needed to make sure that I was paying my rent. I needed to make sure that I had money for books, and that I had money to participate with my friends, go out to dinner, go out to lunch, get drinks. I think I wasn't thinking about the relevance of it for my future career. But in effect, what I was doing was going to a mall store every single day and seeing 20 to 50 customers who were looking to buy a cell phone. It was that sort of 10,000 hours gained in getting just sales experience that I think made me comfortable with wearing all sorts of hats in entrepreneurship. Because no matter what you're doing when you're starting a business, your selling to everyone; whether it's to customers, whether it's to suppliers if you have a hardware startup, whether it's to potential partners, whether it's to investors. It's always sales and it's always understanding what other stakeholders' needs are and changing the pitch to meet their needs.
I think that what AT&T did a very good job of was providing me with a structured approach to how to set up a sale. So the one axiom that I think they provided was sell benefits not features. The training that we went through early on was always around customer comes in and they say I'm looking for a phone and your immediate reaction, especially if you're a data-driven intellectual will be like great, what features do you need in this phone? Do you need a phone that does X, Y, Z? That was definitely my first instinct. But what they taught us through their training program was it's all about Socratic method. It's all about asking them questions about their daily lives and how they might be using their phone, how they might be interacting with their phone to figure out what benefits a product could be providing.
So, for example, I started selling cell phones in 2005, when it was all flip phones and they had just come out with the first camera phone. The questions we would be asking if we wanted to figure out if somebody was qualified for a camera phone, it wouldn't be do you want to take pictures with your phone because most people weren't even ready for that. They weren't necessarily looking for a phone to do that, but it would be more around their habits around taking pictures in general. Do you take pictures on the go? Do you have a digital camera that you use on a regular basis? Do you travel a lot? How do you document your travels? That would parlay into, well, we actually have this new thing. It has a camera on it and it's actually way smaller than your digital camera, and you don't have to carry two devices. That's the benefit, not the feature.
Sal Daher: Excellent, yeah.
Tivan Amour: So yeah, so fast forwarding to starting my first company is I think definitely when we had to set up sales organizations from the get-go, it was those kinds of lessons that those frameworks that I had when writing the first Google Doc, I could say, okay, how are we going to sell the benefits? What are the benefits?
Sal Daher: Benefit and not the feature, yeah.
Raising Money
4. Ben Littauer- Ben's Full Episode - Even More Ben
Sal Daher: Ben Littauer is a very active angel in Boston. He is a founder of a startup and he is also one of my most appreciated mentors in angel investing. Here is Ben talking about fundraising for startups.
Sal Daher: Ben, you've advised so many companies. What's the advice you're giving companies most frequently?
Ben Littauer: With regard to funding, the advice is to be very practical about what you're asking for. It's very easy as an entrepreneur to get wedded to your idea and say this is so hot and it's so unique. Now, seeing as I do probably an average of one new company a day between judging 30 companies on one day and meeting individually with a bunch of companies, your idea isn't unique. What's going to sell us is execution, and so you have to sell yourself far more than you have to sell the idea. When you're looking at raising money, you tend to say, well, I want to give away as little of the company as I can so that I’m going to be in charge and in control, and that turns out to often be a mistake that kills the company.
So, you come in and you say I want a $6 million valuation. It turns out that you really aren't worth that. So on the next round, you have a down round and all of a sudden...
Sal Daher: It's very depressing.
Ben Littauer: It is very depressing. Nobody wants to invest because you look like you're failing. And so, if instead you had more modest goals at the outset and been willing to take a little bit more of a haircut on the equity...
Sal Daher: You would have a much bigger pie.
Ben Littauer: You would have a much bigger pie because everybody would say, hey, you're actually knocking it out of the ballpark and that's one of the key things that I say.
Sal Daher: And it's important to keep in mind here that you're an investor. You put money into a company. You're an advisor. You're getting some equity in here, so you're already in the company. So when the company is negotiating these fundraising terms, you're being diluted along with the entrepreneurs. So you're giving that advice that dilutes your position but in the long run is beneficial for the company.
Ben Littauer: Yeah.
5. Alice Lewis - Alice's Full Interview - Alice's Clever COVID Pivot
Sal Daher: Alice Lewis is a tremendous founder. She's the founder of Alice's Table and she's been on Shark Tank. Mark Cuban and Sara Blakely are investors in her venture and she has hooked up with 1-800-Flowers. Anyway, she's really a tremendous founder. Hear her thoughts on fundraising.
Sal Daher: What have you learned about funding your startup that you think other founders should know?
Alice Lewis: Yeah. First of all, I think the most important thing for people starting businesses to know is that nobody comes into it knowing how to fundraise, right?
Sal Daher: Mm-hmm (affirmative).
Alice Lewis: I felt when I first started, like oh my gosh, all the other founders know how it works. Ask questions. There are people in the startup community that will take the time to say what's the difference between a Seed Round, and an A Round, and a B Round, and who should you be looking for investors at this level? I think ask those questions. You're not expected to know that as the founder of a business. You're supposed to be good at being a founder of a business, and I think that was something that I was intimidate about at first, like how do I raise money? I should know this. I should know what all of that means, and learned that it doesn't really matter. If you're authentic and you're working really hard, people are going to tell you when and how you should raise money.
I think the other thing that's important to note is that there is a culture of using how much you've raised as a metric and I think it's a really dangerous thing to do. I think it's important that funding and capital into your business is fuel for your growth.
Sal Daher: Right. Right.
Alice Lewis: It's not a KPI of we've raised $1 million.
Sal Daher: So, we are successful because we raised $1 million.
Alice Lewis: Right.
Sal Daher: No.
Alice Lewis: Congratulations.
Sal Daher: It's just like you've put another burden on yourself.
Alice Lewis: Right, and so I've really viewed it consistently as what's the fuel we need to get to the next level with this company? Put that into dollars and cents, give yourself a little bit of leeway. Because my dad used to always say to me growing up, the one thing you should know about projections is they're 100% wrong.
Sal Daher: Yes.
Alice Lewis: And it's true, right?
Sal Daher: Mm-hmm (affirmative).
Alice Lewis: So, your projections are 100% wrong.
Sal Daher: Yes, yes.
Alice Lewis: Hopefully, you get better and better at modeling them, but they're never right on target. Know that and get the capital or the fuel that you need to build that business.
6. Sal Daher - Sal's Origin Story - Secrets of Fundraising - More Secrets of Fundraising
Sal Daher: Just in case you don't get enough of me, here are my thoughts on the secrets of fundraising.
Sal Daher: The absolute secrets of fundraising; don't tell anybody. The first secret about raising money, guess what? Raising money, it's selling and a lot of people, particularly PhD types. How many here are PhDs? Okay. Wow. Anyway, we can laugh at the PhDs. The PhDs are the worst fundraisers you can imagine because they're used to always getting accepted everywhere. They were always a top student like my dad and they never got a rejection. Their papers are always cited a lot. They are really successful people in getting their peers to accept them.
When you're fundraising, guess what? People like me shoot them down. We say no, your presentation is full of holes. You've got to do better, and they can't handle it. Who here knows who Stephen Hawking was? Right. Brilliant physicist, right? PhD. A brilliant PhD.
Who knows who Willy Loman was? Yeah. He was a really poor salesman who ended up killing himself for his life insurance money because he was so desperate. But let me tell you something. If I had to put my money on who is the better fundraiser, I will put it on Willy Loman any day over Stephen Hawking because Willy Loman knew something about sales that Stephen Hawking didn't - is that you need a sales funnel. You need to treat your fundraise as a sales process. You have to use Sales 101. It means you that you have to look for a lot of leads and qualify those leads into prospects. From hundreds of leads, you might end up with a handful of investors in your term sheet.
Now, that doesn't mean that you're going to start spamming people. You need to do warm sales because raising money means trusting you. They have to like you and they have to trust you.
The point is that angel investing, it's somebody that you're going to be involved with for 6, 7, 10 years. You better like each other and that's not something that you're going to develop by sending people hundreds of emails and so on. You're not going to develop this sudden affection from someone by sending them emails.
You have to connect with them somehow, and that gets me to the second secret of fundraising and you hear this over and over again. It's a commonplace but it's actually a secret among people for fundraising. If you want to raise money, you ask for advice. If you want advice, you ask people for money because people get defensive when you ask them for money. So before you start your raise, talk to a lot of people. Pick their brains. Ask them, here is my pitch, what do you think? Tell me honestly. Don't spare me. Don't be nice. Shoot it down. Tell me where you think there is a hole. That will make you a better pitcher.
Now, remember when you start pitching for real, don't pitch in front of the people you think are your most likely investors. Go to the people who are the hardest investors most likely to turn you down and most likely to shoot you down because your pitch will get better. And believe me, I have seen companies improve their pitch over a three-month period like you would not believe. I said no, but it's the same business? No. After you explain your business over and over and over again, it's a matter of communication. You get better at explaining to people what it is that you're doing. You understand better what your business is and then you refine your message and you shrink it down.
Returns
7. Howard Stevenson - Building Your Wealth
Sal Daher: Howard Stevenson is a storied professor of entrepreneurship at the Harvard Business School. He is unusual in the sense that he is a professor who needs a family office because he is one of the founding members of Baupost and he has made some really exceptional investments and he talks about his angel investing and the returns he's gotten on his portfolio. I think this is really informative for angels who want to know about what kind of returns are possible and how to get them in angel portfolios.
Sal Daher: We're going to talk a little bit now about building wealth. What type of early stage investments have you made and how have they turned out over time?
Howard Stevenson: I've always been experimental because I don't believe I understand and can predict the future. By the way, when you look at the facts, very few people can.
Sal Daher: That's right.
Howard Stevenson: We've always tried to invest in places where in the early stage, I prefer to invest when people have some revenue because it points to the fact that there is somebody that's willing to have cash-ectomy performed on their wallet. We like to be broadly diversified. I'm not trying to guess what's going to be the next public market.
Sal Daher: So, you prefer companies that are post-revenue, that are earning.
Howard Stevenson: Post-revenue.
Sal Daher: Okay, in a growth stage.
Howard Stevenson: In a growth stage, where they need the money to... If it's in biotech, I prefer something where there scientific risk is out but the market risk is still there. The best investment I ever made was in a company that had a really stupid business plan but the people were fantastic.
Sal Daher: Yes.
Howard Stevenson: They were in an industry that I thought was very interesting. I thought what they were doing in that industry made no sense. And over a couple years, they morphed and that's probably returned 400 to 1.
Sal Daher: Oh, the 400 to 1 return that everybody is looking for to pay for the rest of the portfolio?
Howard Stevenson: Yes.
Sal Daher: Which company was that?
Howard Stevenson: It's a company called Asurion.
Sal Daher: Asurion.
Howard Stevenson: They're very quiet. I'm still invested and they're doing very well. One of my friends who is a noted venture capitalist turned them down because the business plan was too stupid and that's been one of the worst decisions he ever made. Whereas, one of the other venture capitalists that put a little money in said it's the best decision he made in his life.
Sal Daher: I know those kinds of investments are very few and far between and when you turn one of those down, it's hard to live it down.
Howard Stevenson: Well, you have to live life forward. You can't live with regret.
Sal Daher: True, true. True, but I think there is some room for learning.
Howard Stevenson: Well, I think the thing I've learned is I have four criteria for investing in companies that I know and love. Is the person honest? Because if they're not honest, they'll screw you some way.
Sal Daher: Oh, yeah. That goes without saying.
Howard Stevenson: Now, how do you figure out if they're honest? Well, there are two ways. One, you know them; or two, one of my favorite questions is tell me about the sharpest deal you ever did and it's amazing what people will tell you. One guy told me how he cheated the IRS and you say, well, if they can send you to jail and I can't and you're still willing to do it, I think I know something about your values.
Sal Daher: That is remarkable. That is remarkable.
Howard Stevenson: The second criteria that I like to use in investing is are they nice? By that I mean are they looking out for somebody other than themselves? I've had experience in startup or early stage investments where the entrepreneur takes care of themselves really well and the early stage investors, not so much.
Sal Daher: Left holding the proverbial bag.
Howard Stevenson: Well, we're holding nothing.
Sal Daher: Yeah.
Howard Stevenson: We have one that just went public and I think compared to my investments, I'll make 10 cents on the dollar, even though the company was successful and I went through three or four rounds and then I discovered what the person was. But trying to figure out are they nice? That means talking to people that know them, looking at past decisions. I've had investors at companies where we lost all the money and they gave me stock in the next venture they did, which is a good sign that they're nice people.
Sal Daher: Yeah, that is a nice sign. Yeah.
Howard Stevenson: The third element is are they curious? Because if you believe the future is impossible to predict, then anybody who thinks they know the future absolutely is not looking around the corner. So I go back to my example with the best one we ever did, they had a bad plan but they were curious and said where can we serve this group of customers with a very profitable notion? And they found it. The last is are they smart? Because this is a very complicated field.
Boards
8. Michael Mark - More Michael Mark
Sal Daher: My mentor, Michael Mark, repeat founder, super angel, makes another appearance. This time, talking about the value of boards to startups.
Sal Daher: George Orwell said: “Sometimes the first duty of intelligent men is the restatement of the obvious”. The importance of having a functioning board of directors is one of the most obvious things that need restating. With the benefit of your vast observation of boards, kindly restate that obvious proposition.
Michael Mark: One of my big concerns these days is that there is often no board. 10 or 15 years ago, I never saw that. The problem is that in the startup investment space, there's been a big movement from the initial investment being an equity investment to being either convertible notes or SAFE [agreements]. I think in that process, a lot has been lost because the equity agreement mandates a lot of things. One of the things that the equity agreement mandates is a board and I know that entrepreneurs think a board is just going to be a hassle.
Sal Daher: It's very true.
Michael Mark: But they need a board for a lot of reasons. They need the board because they're going to run down alleys that we've already been down and we can help them avoid that. They need a board because we come from the investor space and although they don't think they're going to need more money, they're going to need more money and we can help oil the path to get new money. We could tell them what's feasible, what's not feasible. We can make introductions. To me, it almost makes no sense that they wouldn't want a board, but I do see this, time and time again. My advice to entrepreneurs is if there is someone who has a lot of experience from the investment community who wants to help you by being on a board, create a board and have them on your board because you will not regret it.
9. Bettina Hein - Bettina's Origin Story
Sal Daher: Super dynamic founder, Bettina Hein, the founder of Pixability and also a co-founder of an earlier company, talks about the value of boards and how she really valued the work that she did with her board at Pixability.
Sal Daher: It's not uncommon for early stage companies, particularly tech companies, not to have a working board in the stage where angels are investing. What are they missing out by not having a board?
Bettina Hein: A lot. They are missing out a lot. Many beginning entrepreneurs are scared of having a board. They fear the meddling in their business. They fear that people will force decisions on them on the board. I have not seen that ever happen. If you are scared of that, you have to get over it. I love having a board. I think that that is one of the wonderful forcing functions as an entrepreneur. It really makes you be more disciplined. It allows you to look back on your business every month, every quarter, depending on the rhythm that you have. It forces you with your team to get together and take stock of what your really have accomplished in a certain amount of time.
For me, oftentimes the exercise of preparing for a board meeting is almost more important than the board meeting itself because it allows me to really think through the narrative of the company. And going back to fundraising, if you have regular board meetings, you have check-in points and you know where you stand. So if you have to go out and fundraise, you pretty much have your story down because you have been regularly revisiting this.
Sal Daher: Every board meeting is a prep for a fundraise. One of Ed Roberts's point was that the directors are there to make sure that the CEO is looking a little bit ahead of her feet.
Bettina Hein: Exactly, and I would like to give just a little plug here for a case study that Noam Wasserman, who is now at the University of Southern California, but before was an entrepreneurship professor at Harvard Business School did a video case study where my board at Pixability allowed cameras in the boardroom and this case study called Bettina's Boardwalk showcases an early stage board's functioning in a board meeting. I cringe every time I have to watch this again because Noam brings me in for it, but I was really sweating. This was sort of a pre-fundraising board meeting and it was tough on me, but it's really interesting to watch. The case study really helps people, entrepreneurs understand what it is like to have an early stage technology company board.
10. Christopher Mirabile and Adam Martel - The Full Episode - Christopher Mirabile Origin Story
Sal Daher: Super angel, Christopher Mirabile of Launchpad and Adam Martel, a superb founder of Gravyty, on boards.
Sal Daher: The average founder has the attitude as: the board is kind of like grumpy dogs you kind of have to placate.
Adam Martel: Whoa, whoa, whoa. He said that. I didn't say that, Christopher [crosstalk 00:27:51].
Sal Daher: No, no, no, no, no. But that's the average. This is the image that I want to dispel. I want people to understand that a board is... When you're starting out [inaudible 00:28:02] it's not a big board. Sometimes it's just one or two board members. These are people who are in your corner, who are going to go to bat for you. They have to be people who have put money in the company, so they have real stake in the company and not just people who are talking and so on, advisor. Those are advisors. They haven't put money in, the most they can be is advisors. But if they've put money in the company and they're really in your corner, invaluable.
Adam Martel: Yeah, we actually... We have three board members and they were all pretty early. Raymond Cheng was the first one. He wrote us the very first check and he's been phenomenal and just supportive and kind to us, and guided. Obviously, Christopher, and as an extension, Ham [Hambleton Lord]. The amount of time that we're able to get with these folks who have seen this a thousand times and we don't have to reinvent the wheel every time we want to create a board deck. We don't have to reinvent the wheel every time we want to run a succinct board meeting, and they give us candid feedback, good and bad.
And then, we actually do have a member that doesn't have a stake in Gravyty in terms of investment, Jay Love. He had sold a bunch of companies to one of our potential natural acquirers, Blackbaud, and he had built a bunch of companies in this space. We had talked about an investment but I think when we went down that path, we realized that having a fifth board member that actually didn't have an investment in the company might actually be a decent way to go.
Sal Daher: You thought that was valuable?
Adam Martel: It was antithetical to what a lot of people told us, but I think Rich, me, I remember we were talking to Christopher and Ham about this and Raymond. I think everybody just sort of agreed that with somebody with that type of experience, he was willing to put in money but I think that we already had a full round and we just sort of said, hey, we want you to help. We would love to have you involved. You know more about this space than anybody. And at the time, Rich and I knew about fundraising but we didn't really know about the M&A space. We didn't know about the partnership space. Christopher knew about Launchpad and about the angel space, and so did Raymond, but none of us had great experience with the people that we actually had to work with to change the world and that's the Blackbauds, the Salesforce, the Ellucians, except for Jay. So he brought a dynamic that has been phenomenal.
Christopher Mirabile: And you guys have what I think is sort of the perfect board for your stage, which is what I call the two, two, and one, right?
Adam Martel: Mm-hmm (affirmative).
Christopher Mirabile: Two common, two investor, one independent; and five is enough brains around the table to have meaty discussions but it's small enough and nimble enough that it's not impossible to schedule a meeting. The meetings don't drag on with everyone waiting their turn to get their two cents in. So perfect for those early angel years where the company's raised a couple million bucks and they're really going quickly up that growth curve.
11. Joe Caruso - Joe's Origin Story - Irresistible! - Joe Caruso on Startups & COVID
Sal Daher: Joe Caruso is a super angel in Boston. He has vast experience building startup companies in the technology space and every time I talk to him, I learn something new. The guy is just fantastic. I call him the Father Confessor of Founders, the CEO Whisperer because of his wisdom. Anyway, here is Joe Caruso on boards, on how to get the most out of your board. You should listen to everything that I've recorded where I talk to Joe Caruso. Let me tell you, the guy is fantastic. Joe Caruso on boards, Joe Caruso on fundraising, Jose Caruso on so many topics.
Sal Daher: Here is something that I hear all the time. Oh, I don't want to have a board because I'm afraid they're going to constrain what I do, or I have a board of directors, I've got to "manage them". Respond to that, Joe.
Joe Caruso: I think one of the big mistakes entrepreneurs make is to view a board just the way you described them. I think instead, they should view a board as a strategic weapon. Instead of viewing it as this unpleasant task they have to deal with or this hurdle they have to overcome, they should think of it as to how to expand the resources available, how to expand the knowledge base available, and how to help them through the various pivots that they're going to have to go through.
I think it morphs a little bit into the discussion of board of directors versus advisory board and I think they sometimes mix the two. Advisory boards to me are a place where you get domain expertise. You get subject matter expertise. Board of directors, you get people who are experienced at building companies.
Co-Founders
12. Ed Roberts - The Full, Glorious, 89-minute Ed Roberts Experience - Awesome!
Sal Daher: Professor Ed Roberts of MIT Sloan School, who really pioneered the study of entrepreneurship, talks about the importance of co-founders and the value of additional co-founders in the success of a company.
Sal Daher: Now, Professor Ed Roberts, what do you consider to be the most important result from your scholarship of entrepreneurship? What's the result that you think is the most significant?
Ed Roberts: Well, most significant in this case, I will interpret as being what is that that I really try most hard to communicate to my students. I run the entrepreneurship and innovation track in the MBA program. So it's the largest track in the school and it consists of people who think that they're dedicated to starting companies. What I most want them to understand is that if they grew up believing with this American myth of Horatio Alger, which is that individuals are heroes and individual heroes accomplish everything, they have a lot to learn relative to starting companies.
Our data are very clear. The failure rate of those who start companies alone is the highest by far among all of the companies we study. It is not the individual alone that matters. It is the individual is part of a team along with other individuals who bring, hopefully, complementary skills, attitudes, and the like, while bringing, again hopefully, comparable values together. So our data say as you go from one founder to two, you significantly improve the likelihood that you will succeed rather than fail. As you go from two to three, it improves again. As you go from three to four, it improves again.
Now, at those levels, one to two to three to four, my statement is a statistically significant statement. The data are clear and well-defined. If you go to five, the trend is still the same. More likelihood of success, but now unfortunately there's not enough five-founder companies in our sample for me to say it's a statistically significant finding. I'd believe it, but I can't prove it to my level of satisfaction.
Do I really believe more is always the merrier? No, I do not. I believe that if you get beyond something like four or five, you're going from team to chaos and it's going to be a very difficult thing to manage a very large group of individuals. Now, why a team? First is just the addition of the assets of those people. More skills, more money, more experience, more capabilities. Second is the increase likelihood of complementarity. What I know is different from what you know and adding you and I together is not just one and one, it is something that may have some meaningful significance.
Three, by bringing multiple people together, I'm bringing multiple sources of interpersonal strength and comfort together. It's a terribly difficult thing to start and build a company. You try to do it alone, where is your backup for you? Never mind for the company. Who are you going to weep on when you're in pain and suffering? It's great if you have a supportive spouse or partner. That's wonderful, but it would also be nice if you had a supportive partner who was a partner in the business where you could sit and talk together, coach each other, help each other, comfort each other and the like. The more is merrier, at least up to a small number of people who could together be a much stronger group of people providing reinforcement to each other.
So, the data are clear. Now, two different additions. Number one, the team is more successful if the team is commingling people with a technical background and people with a management background. So that combination of skills turns out to be statistically significant. And now one final thing, if of the management background, someone has background in sales of marketing, it's still better. So at each of those points, I can say, okay, more people up to a given level is better. More people who come from different sets of skills base, technical and management is better. More people that include some degree of experience in sales and marketing is better. Every one of those three dimensions of teaming is statistically meaningful and I think critical in the founding and building of a company.
13. Chuck Eesley - Chuck's Full Interview
Sal Daher: Professor Chuck Eesley, who got his PhD at the MIT Sloan School with Ed Roberts and teaches entrepreneurship at Stanford University talks about also the value of co-founders.
Sal Daher: Earlier on, you talked about the work that you're doing on teams.
Chuck Eesley: Mm-hmm (affirmative).
Sal Daher: I know that Ed Roberts, during his interview, one of the many things that he pointed out was that likelihood of success increases if you have additional founders with complementary skills. You're bringing in people with complementary skills. Would you talk a little bit about your work that you've done on founding teams?
Chuck Eesley: Well, just one important note on the founding team size, this is one of the most robust effects and one of the stronger effects actually is that larger teams tend to do better. And in general, people tend to have slightly too small of a team.
Sal Daher: Yes.
Chuck Eesley: So, we found that not only among MIT alumni, we replicate that same finding among Stanford alumni and even the international datasets that I've collected in China of the Tsinghua University alumni, almost any entrepreneurship database out there, you see this same effect. That larger teams tend to do better.
14. Nell Meosky Luo and Dan Toffling - The Full Interview
Sal Daher: So, having a co-founder tremendously increases the chances of success of a new startup, a new enterprise. And yet, founders resist getting a co-founder because it's hard. Coming up, a couple of stories precisely about this topic. First, Nell Meosky Luo and her co-founder, Dan Toffling, tell us how they got together.
Nell Meosky Luo: I started looking for a co-founder who'd be able to help us develop the technology.
Sal Daher: How did you and Dan get together?
Nell Meosky Luo: I put out an ad.
Dan Toffling: About two and a half years ago, I had been working as a software engineer/CTO for a company I had founded over a decade ago and so I had been looking for something a little bit more rewarding. And like Nell said, there was an out there. I was looking for a new position, something that had a little bit more of a double bottom line to it and I went on bostonstartupguide.com, and the second ad was hers. I interviewed for the first time in 15 years.
Nell Meosky Luo: And I interviewed for the first time ever.
Dan Toffling: And we hit it off and we went from there.
Sal Daher: That's great.
15. Ed Goluch - Ed Goluch's Full Interview
Ed Goluch, professor at Northeastern and founder of QSM Diagnostics tells us how he got his co-founder.
Ed Goluch: The funding started in January of 2018. We'd now had the funds to set up a laboratory outside of the university. I had enough money to pay someone to become a full-time employee. This is actually a funny story to most people. It seems really straightforward to me. I put out an ad on Indeed. I'm like I'm looking for a PhD recent graduate that knows surface chemistry, electric chemistry. And this is one of the great parts of being in Boston, I got 20 amazing candidates in less than a week and one of the people I interviewed and ended up hiring was Nicholas Cadirov, and he's been my co-founder with me for the last two years.
Randomly applied online. He had finished his PhD at UC Santa Barbara in chemical engineering. Perfect skillset. Happened to move back to Boston. He was originally from Massachusetts and his girlfriend and now fiancée had been finishing her PhD at Harvard and just worked out beautifully for us.
16. Russ Wilcox - Russ' Origin Story
Sal Daher: Russ Wilcox was one of the co-founders of E Ink, the company behind the technology that is used in all the e-readers, including the Amazon Kindle. Russ is now a VC at Pillar VC. I think he is one of the most thoughtful venture capitalists in the Boston area. Here are his thoughts on a co-founder.
Russ Wilcox: If I had one little bit of advice, I think for anyone who is listening who is considering to start a company, let's just go to the very beginning. There is a moment of someone saying I want to start a company, I'm not sure how. And so, I'll just share one piece of advice I have for that, which is don't think you need to sit in a corner and try to do a brainstorm and put yellow stickies on the wall with all your different ideas. It's very unlikely you'll come up with an A+ idea by yourself, and I like to encourage people who are thinking of starting a company not to hunt for an idea, but to hunt for a co-founder. Find a person with a deep expertise who has built something really understands the customer problem or has a new piece of science, or they're a visionary of some sort. That person is out there who does have an A+ problem, but they probably aren't able to get there by themselves.
You go find a person you're compatible with and between the two of you and your backgrounds, the idea will become apparent. Bottom line, don't look for an idea. Look for a person.
Product
17. Chris Savage & Brendan Schwartz - The Whole Brilliant Interview
Sal Daher: Chris Savage and Brendan Schwartz are two amazingly scrappy and capable founders. They are the founders of Wistia, a very successful video platform and these guys, you should definitely listen to their podcast because the company has an amazing culture. They finance themselves in their special way. They were very lean in the way that they started the company, but here they are talking about building product. Nobody knows better how to build competitive outstanding product than the wizards at Wistia.
Brendan Schwartz: I think it's easy to look at a lot of successful companies and think that they took a very linear path to get where they are. But I think finding your customer's pain is one thing, and also understanding your customers will change as you grow and that's completely fine. I think when we started, we had some idea that we needed to have the perfect vision for a product and everything figured out. The thing that made us successful was when we did that and failed miserably, and then we ended up just talking to this one customer, this medical device company, and then started connecting some dots from other conversations that we had. I think, like Chris said, that is another big one that I feel like I don't see as much, but the people being open about their ideas. I feel like that was another thing that we thought we have the perfect idea. We need to be so secretive about it because what if someone copies it? Which is a crazy...
Sal Daher: Oh, Google is going to copy the idea and is going to copy the idea and it’s going to eat us up.
Brendan Schwartz: Yeah, you should be so lucky.
Chris Savage: Yeah.
Sal Daher: You should be so lucky.
Brendan Schwartz: Yeah.
Sal Daher: Ben Littauer, I interviewed months ago on this is exactly the same thing. You should be so lucky that Google gets interested in your idea because it means you really have something. Yeah. I remember Beth Marcus, another entrepreneur, talking exactly about this. Talk people's ear off about your business and your idea, the thing you're planning to do. I guess that's what helped you guys find the medical use for the videos was the fact that you became known and you talked about this stuff, and so forth. Yeah.
Chris Savage: I think it's just to be if you're not embarrassed by the stuff you're putting out in the world, you probably have taken too long in protecting it or trying to make it perfect and that's normal. You can have something great that you still think is only solving a small percentage of the problem. We launched Soapbox and Soapbox is a tool that lets you make videos by recording your webcam and your screen.
Sal Daher: Yeah.
Chris Savage: Yeah, and then you make these transitions. So we're trying to make it really easy for people to make videos that look really professional. We think if you can do that, you're going to use it at work and you'll make videos where you wouldn't have otherwise, but we're also Wistia and we've really differentiated ourselves with analytics for example. We invented the video heat map and the engagement graph before YouTube and all these things because we found these problems before anyone else was focusing on them. We were like we should probably put analytics in Soapbox, right? You would think that that's something you would do. And yet, we didn't because the team was like that's a good idea, but that's actually not the core of what this is about, like we actually have to have an MVP.
I remember we were talking about it like a month before, I'm like, Brendan, are we going to stuff analytics in this thing [inaudible 00:45:19] was like no, we're not going to. We're not going to. We're going to actually wait. I'm like, well, I'm kind of a little embarrassed because as a company, we're known for these analytics and you would think that this would be in there. And then, you realize actually this is how it should be. We got it, put it out there and know that it's unfinished. And if it's not valuable enough as it is currently, then we're not working on an important enough problem. I think that's really easy to fall into that trap, like you have to actively work hard to not fall in the trap of trying to have the perfect thing when you're launching. Often, because you start making something and you use it and you think it's good, and realize what is the next thing you should do, and what's the next thing you should do? And so, it doesn't feel done, but that first thing might have been.
Brendan Schwartz: Yeah, and there is no substitute for getting feedback from actual people using it because it is probably... Unless, you are some kind of genius mind-reader is probably not what you thought or what is important.
18. Sam Bogoch - The Sam Bogoch Origin Story
Sal Daher: Sam Bogoch of axle.ai has worked very hard to perfect the product that his company offers. It's a way for people who own a lot of video content to figure out what they have using artificial intelligence and other techniques to make massive amounts of videos accessible. Listen to him talk about the importance of product. Very eloquent.
Sal Daher: Is there anything that you want to get out to our audience of startup people and investors, and so forth?
Sam Bogoch: Well, I think that the biggest thing that I would pass along is that if you can find a market fit for what you're doing and you know that the demand is there, other good things will follow. The funding is easier to get. You don't have to work as hard to convince people that there could be customers if you have actual customers and if they're big names or if they're credible at what they do, that really helps. So more than anything else, there's a kind of a culture these days of let's start something and raise a bunch of money and figure out what we're going to do soon after that, or maybe in the process of doing those things. It's not a hopeless approach. It works quite often, but it's also inefficient when you can start from a product/market fit and say these are a whole bunch of customers that really need this. Now, let's raise some money to grow the business.
So that's my preference and it's a personal preference, but I think it leads also to healthier sizes of companies. You end up with more companies that do good things for individual customer sets rather than these behemoths that try to do a peanut butter spread of everything.
Discovering Entrepreneurship
19. Gillian Isabelle - The Complete Interview with Gillian Isabelle - Compelling
Sal Daher: Why people found their company, their startup is extremely important and we all know as we've talked about this before, people don't found companies to make money. They found companies to solve problems they feel very deeply about, but I think that the founding story that most moved me was the one told by Gillian Isabelle, the founder of Enlivity. Here she is giving really a very eloquent explanation of what drove her to leave a very safe scientific position to venture into building a startup.
Sal Daher: When did it dawn on you, this is what I'm meant to be doing? Do you remember that moment?
Gillian Isabelle: I do. I do because as I said, before Enlivity, I worked in biotech and I have to say I had some really great jobs, like really phenomenal jobs in biotech. And then, when I worked in biotech, I know that I've tended to think of cancer patients in very statistical terms. So if you have X mutation, then you have Y percent chance of developing Z type of cancer. That was really how I thought about cancer and then some years ago, I lost a very close friend of mine to cancer and she was very brave and went through her treatments and never complained about anything. But I could tell that when she went through her chemotherapy and radiation, they really slowed her down. She was a very active person, but when she went through the chemotherapy and radiation, you could tell that it had an effect on her.
And then, there came a point where actually her cancer had recurred. She qualified for a clinical trial and all of our friends were talking about how we were going to help to support her when she went through the clinical trial and she just announced that she was not going to go through that trial. She had made the decision to stop treatments. She talked about the need to make a choice between length of life and quality of life, and that was really very shocking to me. I'd never really thought about cancer in that way before and it just really didn't seem fair that someone at the age of 42 should have to be making that type of choice, and I thought surely we can do better than this for these patients.
Thinking about that really got me to think about what can I do now? Not 5, or 10, or 15 years from now with new treatments, but what can I do now? You have to think about that very carefully because you are leaving a safe salary and a safe position to go and do this, but I looked at the situation and thought there is this clear gap in cancer care and somebody should be doing something about this and it looks like it's going to have to be me. So, I just said I'm going to do it.
Sal Daher: Before we wrap up this episode, I'd just like to take a moment to thank the people who have made this possible. I am the host and I get all the attention and the guests that come on as well, but this podcast is made incredibly better by people who help in all sorts of ways. First, I want to recognize my daughter, Grace, for her help, her criticism. Her constructive criticism. Always cheerful, always encouraging, but also spot on. Thanks, Grace.
I want to recognize Katharine Woodward-Maynard, who designs but also advises me on the look of the website and just how to present the podcast. And most importantly in particular for this episode, my really tremendously valuable collaborator, Raul Rosa. Several of the snippets in this episode were suggestions of Raul that I had missed and these are gems, like three or four of them. Raul doesn't just suggest things, doesn't just edit and make me sound much smarter than I am, but he also connects me with people who are tremendously interesting. For example, he connected me with the people at Wistia, but here is an example of the kind of finds that Raul makes. He insisted that I put this snippet as the closing of this podcast.
20. Larry Sullivan - The Full Journey through Larry's Amazing Career
This is Larry Sullivan, who is a very thoughtful person who's had many, many different careers as an academic, as a priest, and as a founder. So he's a person who's a very deep-thinker, so I think it's really fitting that we go out with this tremendously inspirational reflection from Larry Sullivan, co-founder of chiefofstaff.com. Thank you for listening. I'm Sal Daher.
Larry Sullivan: I am amazed at the fact that we're here. Not you and I talking right now, but the humans are here, that life exists and we're able to think about it. Between our ears, we can have an image of the entire universe. We can think about the Big Bang, 14 billion years ago, somehow in our gray matter. I find this just astounding when you think of the chain of events that had to happen for this to occur, for us to be here with whether there were red dwarf stars, the planets that were exploding to have calcium in our bones and the heavy elements, or just the...
Sal Daher: How many happy coincidences had to happen for us to be here?
Larry Sullivan: Exactly, it's just in our family line, all the people had to find one another to make us biologically possible. I do find it amazing and I think my own attitude toward that is to just be grateful and to therefore appreciate both the differences and the similarities of people around me. I say this in the context even of corporations and companies. The value of a company really is the sum of all these differences, these extraordinarily different people who are able to bring different value to one another as shared enterprise. We try to take that deep philosophy of appreciating everyone's autonomy, their agency, and yet their shared mission as something that we can put on a platform and magnify, and put in people's hands.
Sal Daher: Wow.
Larry Sullivan: I'm enjoying dealing with people and their missions, and their differences, and then the different ways they exist at corporations. And at the same time, perhaps offering something to even raise that up another level.
Sal Daher: So, you are systematizing happy accidents?
Larry Sullivan: Yes, I think so and giving everybody a chance to see everyone else with more respect and awareness.
Sal Daher: Hi. I hope you enjoyed this compilation of interesting views from various people who have been on my podcast over the last 99 episodes. Just a reminder, the reason that I did this compilation is to emphasize the fact that the website is now organized in such a way as to make it really easy for you to find the snippets of podcasts that most address the topics that you're interested in. So please go to angelinvestboston.com, and have a look at our newly organized website.
This is Angel Invest Boston. I'm Sal Daher.