Feel the Boot

Elizabeth Gore, co-founder and president of Alice (helloalice.com), recently joined me to talk about her entrepreneurial journey and to share some insights with other founders. Alice is a free multi-channel platform powered by AI technology that guides business owners by providing access to funding, networks, and services.You can also watch this as a video: https://ftb.bz/30VBefore that, she was the entrepreneur in residence at Dell Technologies, served in the Peace Corps, and much more.We talked about how she became an entrepreneur and how her background contributes to her capabilities as a co-founder.We discussed why women and minorities are at a massive disadvantage as entrepreneurs, and the particular challenges of being a founder/parent.Finally, she shared several tips that will be of great help to any small business owner, particularly during the COVID-19 epidemic.

Over the last couple of months, I have been incredibly busy with Feel the Boot and other projects. I have been setting up schedules, writing blogs, recording interviews, posting content, advising companies, and the like. All of the associated deadlines have been stacking up, making me feel stressed while not making much progress on my main strategic goals.Then suddenly, I realized that I had been caught by the busyness trap … again!You can get this as a video.Or read the blog on our website here.The busyness trap is when you get caught in a pattern of doing a lot but accomplishing little. In this installment, I look at: why entrepreneurs are so easily caught in the trap, what it means for your startup, what gets lost when you are in the trap, and some approaches to escaping from it.Why are entrepreneurs so vulnerable to this trap?For many, being busy has become a status symbol. When people ask, “how are you?” we say “busy” or even “it’s been crazy.” We brag about long hours, but rarely in the context of any strategic objectives.Another cause is guilt. I often feel guilty when I am not busy. I will do meaningless little things at my computer rather than walk away. Sometimes I find myself doing completely wasteful activities rather than leave the office. I find myself thinking that there might be a link to a useful article on Twitter if I just scroll down a few more pages.Stress can often lead to busyness. When you know there is a lot to do, you may focus on doing a lot of things. With no time to look up, you laser in on knocking off that next task, answering that next email, scheduling that next post, or whatever other tasks are on your to-do list, without pausing to think whether those are the most important things to be doing.For entrepreneurs, busyness is self-imposed. No external boss breaths down your neck, making sure you are filling every moment with productive activity. Although we might have learned the habit from prior employment, we have the power to change that pattern now.What does busyness mean for your startup?First, there can be diminishing returns from working longer and harder. Value produced does not scale linearly with hours spent on the job. Productivity drops off sharply after too long on the job.When I was in graduate school, pursuing a Ph.D. in Astrophysics, I had to take a two-day test covering all aspects of undergraduate and graduate-level physics. For months my life revolved around studying for that test, cramming my head with every possible detail, equation, and technique. I wallpapered my living room in equations big enough to read from the other side of the room to help me have all the information instantly available at any time.I quickly discovered that I was only good for about three hours per day of focused high-intensity mental effort. Working longer than that accomplished nothing more and left me fatigued. Eventually, I had to give myself permission to structure my days around that reality and do only less brain intensive things outside of those 3 hours.I need to remind myself that the opposite of busyness is not laziness. It is a purposeful choice about what to do and when.What gets lost when you get busy?A lot of important things can get dropped or missed as we get busier. As an example, look at the essential activities that I have been allowing to fall to the wayside.I don’t read nearly as much as I would like. Reading is fuel for my idea engine. When I am going through a good non-fiction book, I regularly stop to take notes on new ideas and projects.Busyness prevents me from making time to talk to people outside of structured meetings. Open-ended conversations bring forth all kinds of fantastic concepts and cement relationships that will be valuable later on.I find it hard to stop and “sharpen my saw” while in the middle of work chaos. It feels like wasted time, even though these meta-activities can lead to substantial overall productivity boosts. Intellectually, I know that improving skills, workflows, and organization structures can all pay big dividends. Yet I stay caught in the demands of the moment.I feel like I am missing out on opportunities. Being heads down in the weeds can mean that I don’t take time to notice openings or to take advantage of changing situations.I remember a lesson about relaxation from my Kung-Fu instructor. Tension makes your body slow, while a relaxed body is fast.The same is true of a relaxed mind that can perceive opportunities for action that would miss when locked into a narrow channel. When you are stressed, opportunity looks like one more thing to do, so you avoid it.The biggest thing I miss out on is pure thinking time without a specific plan, so my mind can wander over possibilities. I keep a waterproof pad of paper in my shower because of all the thoughts that pop up while engaging in that mindless activity. Long walks, or just sitting staring into a fire, can often be the most effective use of my time, if only I permit myself to do it.General Eisenhower had an excellent framework for thinking about tasks and making sure that important ones did not get lost in the shuffle. He looked at every activity along two axes.Whether it was it important and whether it was urgent.If something is urgent and important, like putting out a grease fire in your kitchen, then there is no question or hesitation. Of course, you do that immediately.The busyness trap arises from the issues that are urgent but not particularly important. They make a lot of noise and attract attention, but don’t change your world. These are the tasks that often fill our time driving out the others. They need to be kept in check.We need to make room for the things that are important but aren’t urgent. Reading, thinking, talking, planning, and working on long duration projects all fall into this category. If they are going to happen, we need to carve out substantial time for these kinds of important but not urgent activities.Finally, there are those tasks that are neither urgent nor important. You don’t need to do those at all.How do you escape the busyness trap?Obviously, I haven’t found the magic solution to avoiding the busyness trap. It is a tricky thing because there is no one moment when you feel its jaws grab you; it comes on over time.For me, awareness of this issue is the first step. Knowing that the trap is a real thing, helps me look for signs that it is happening again.When you realize that you are spending your time on less important things while strategic initiatives are being ignored, stop and take a breath. Force yourself to take some time to look for ways to eliminate the clutter. I find that an audit of where my time actually goes helps me see where my priorities are out of alignment with my daily practices.As soon as you realize you are in the trap, spend some time listing the projects and activities that are important to you and make sure you have a process to keep them front and center on your schedule.Finally, permit yourself to just ponder. Creativity requires that kind of open, unstructured time.If you are in the midst of the trap, this should help you find your way out, if only for a while.

Any time you are talking to an investor, whether in a pitch deck or during due diligence, they expect you to show financial projections. Many founders run into trouble with this when the company is mostly or entirely pre-revenue. You might wonder what you can show with no track-record. Even so, financial projections are still essential both to the investor and to your strategy.Right off the bat, let's be honest. Angels know that your numbers are going to be wrong. That is the only thing they can be sure of.Angel investors are an idiosyncratic bunch; we all have different things we are looking for in a business and in financial projections. I want to see the founder tell a not impossible story about their company’s success. We all know that it is likely that you will need to pivot at some point, but you still need to show that your initial plan could work and produce substantial returns on my investment. Of course, that means you will have a chart showing hockey-stick growth. But don't just make up the numbers, show that they are plausible, or better yet likely.Read the blog version: https://ftb.bz/startup-financialsListen to the podcast: https://ftb.bz/podcastLinks from the episode:Embrace the Pivot- https://youtu.be/OEDmau9ljoUWhy do Angels Demand 20X returns - https://youtu.be/J7tnKZW7TXgThe Three Kinds of Virality - https://youtu.be/jyxTtZ6Gl0wTest Driving Your Business - https://youtu.be/MLJQMRIIm7Q

Video: https://ftb.bz/27V Blog: https://ftb.bz/27B Episode on testing assumptions: https://ftb.bz/21B-testing-assumptionsStarting a business with nothingA viewer recently asked me how he could launch a startup when he does not have any significant savings or wealthy connections. With just an idea, but no source of capital, he is going to have to do this the hard way because no outside investor will ever fund a first-time entrepreneur with only an idea. If an entrepreneur has a significant track record of successful exits, then they might be able to get investment in their idea, but at that point, they would also have friends and family with money.If you are in this position, your first step is research and lots of it. You need to know everything about your business and market. Fortunately, it takes little or no money to conduct this kind of research and experimentation. For a company starting with no capital, avoiding waste and mistakes is even more critical. I wrote an entire episode on testing assumptions.Can you build it yourself?Engineers found most tech startups because they can build the initial prototypes themselves. They use their time, rather than cash to launch the company, avoiding the whole problem of fundraising on an idea.If you are launching a software-based business, can you code it yourself? You don't need to be the best programmer, just good enough to create a proof of concept or prototype that can demonstrate and validate the company's premise. I wrote much of the early code for Anonymizer and a few other products. I am not a professional developer, and that software was spaghetti code of the worst kind. But it got us initial customers and demonstrated that the idea was valuable or, in some cases, not. The same concept applies equally to hardware and service-based businesses if you have the needed skills.With just enough functionality to demonstrate your capability, and to validate customer demand and engagement with the solution, you are ready to bring your company to outside investors.If you can't build it yourselfBut what if you are an expert in business, sales, or marketing but have none of the skills required to create the solution? After you have finished all of the research and testing you can do without a product in hand, you must start evangelizing your startup to more technical entrepreneurs.Many technically skilled individuals want to be entrepreneurs but don't have an idea for their own business. Get them excited about your idea and bring them onboard. It may take a long time to find the person who both has the skills you need, and fully appreciates and shares your vision.This person will be your co-founder. They can spend their time creating the prototype and MVP while you focus on networking, pre-marketing, creating visibility, and yet more research. Mutually respectful technical and non-technical founding teams are incredibly powerful and attractive to investors. Your new technical co-founder will expect, and deserves, a substantial stake in the company. You literally could not do this without them, and they are not getting paid any salary.Spend time not moneyPeople often say that we should always spend money to save time. In this no-money situation, the opposite advice applies. In an unfunded startup, you are using time, which you have, to avoid spending money, which you don't. Beyond creating your prototype / MVP and doing research & testing, many of the other activities you should pursue depend on whether you are creating a consumer-focused offering or a B2B company.Consumer· Leverage free tools and online communities to get beta testers and early users. ProductHunt.com is a good example.· Engage in social media to build a following and create excitement about what is coming.· Participate in relevant online communities that will provide visibility, future users, advisors, partners, and investors.· Leverage PR if your solution is newsworthy. A company I help gets amazing PR because he is a veteran who makes a device addressing PTSD.· Use inexpensive online ads to test your messaging and the market need. You can learn a lot from just $100.B2B· Network with everyone in the space, in person, on LinkedIn, in forums, etc.· Ask for referrals and introductions to potential partners and customers.· Join associations and groups (that are cheap or free)· Attend industry events (that are cheap or free)· Spend time meeting and talking with potential customers, not to sell them but to learn from them.For everyone· Attend and present at pitch contests to hone your message, meet other entrepreneurs, and connect to advisors & investors.· Join quality accelerators or incubators for networking, logistical support, discounts, and sometimes funding.· Find potential advisors and sell them on the exciting prospects for your business. They can help with strategy, tactics, and growth. They should also make introductions and generally provide an experienced outside perspective.A long hard roadBecause you won't have any cash to spend, building your company to the point where angel investors are interested may take a long time. The process is challenging but not impossible. By the time you are ready for fundraising, you may be so good at bootstrapping that you find you don't need to bring in investors after all.

During any economic crisis, startups need to take immediate and radical action to stay alive. While I wrote this in response to the pandemic, the advice applies to any situation creating an existential threat to your company.My most significant experience with this kind of challenge was in the aftermath of the tech bubble bursting in 2000. Everything in the dot com sector seemed to grind to a halt. Surviving required that we significantly change the way we operated. The following five actions saved the company.1. Reset Expectations2. Seek Opportunity3. Hoard Cash4. Slash Costs5. Don’t Pay Your BillsWatch the video of this episode: https://youtu.be/_fqYF2qREawRead the blog version: https://ftb.bz/Crisis-survival

Blog: https://ftb.bz/25PBVideo: https://ftb.bz/25PVIntroFounders can be like hound dogs on a trail. They are tracking a scent, absolutely focused on their objective. Then suddenly: Squirrel! The CEO races off after some new enticing goal, possibly causing catastrophic damage to the core business. For all companies, but especially for startups, focus is critical.A founder I advise recently asked if they needed to be looking for an opportunity to pivot. They had seen the "Feel the Boot" on pivots and thought I was saying that they should be trying to pivot. My actual point was that while pivots end up being necessary for most companies, and should not be avoided, they are not something to seek out on their own. Changing direction without purpose is just a random walk. Pivots are a response to an underperforming business plan.The founder suggested that I should create a balancing episode about the importance of focus. So, here it is.Sources of DistractionThere are countless sources of distraction for an entrepreneur. News and social media are overflowing with new shiny objects: some new tech stack, development tool, development methodology, cloud service, API, marketing channel, etc. New technologies are particularly distracting to engineer founders.New markets can be another big distraction. Suddenly you realize that a whole different class of people needs something similar to what you are already building, and surely it would not be too hard to accommodate them as well. Right?Existing customers can also drive distraction. They will ask for new features or capabilities specific to their circumstances. It can be tempting to drop everything to give them what they want. While these might be great ideas, always consider them within the broader product roadmap and customer base.One company I am helping makes a wonderfully simple and effective medical device. One potential customer wants to have motion tracking and networking added to it so they can collect data on the users. The founder wants to add that capability. I am less enthusiastic. While this might be a productive new direction, my concern is that it will delay the product by at least several months. At the same time, it is not clear that adding this feature would increase sales and margins overall, or that the customer would refuse to buy without it.On the other hand, distractions can also come from advisors, so be careful when listening to them (me). We have lots of ideas that can help your business but might not be something you can address right now.All of these distractions are incredibly attractive because the grass always looks greener in the fields you have not explored yet. You know the challenges with what you are trying to do now, but those new things look easy.Benefits of FocusEntrepreneurs need to focus because they have way too many ideas. Scanty time and cash resources require a tight focus on only those efforts and deliverables central to the business. Creating the perfect minimum viable product addressing the needs of a narrowly defined customer set can be all you need to start the business growing.That single targeted and polished offering can generate far higher returns than creating additional parallel capabilities within your solution.Focus also helps clarify your vision to several different audiences. Your teams, from development to marketing, will all understand exactly what the company does and what you are trying to accomplish. Your potential investors will see what you are selling, who you are selling to, and appreciate the business model. Your prospective customers will gain a clear idea of how your offerings fit into their business and address their pain points.Pain of DigressionLack of focus leads to being spread too thin. Each of the multiple activities you pursue receives fewer resources than required. Even with perfect focus, in most startups the core of the business gets less attention than it needs, so with parallel efforts, the shortfall multiplies.We lose a tremendous amount of time and energy every time we switch tasks or change priorities. For that reason alone, we should never change direction frivolously. I have seen many projects in easily distracted organizations that never get finished because the constant reshuffling of tasks repeatedly pushes the completion date over the horizon.I think this killed one of the companies I helped last year. They wanted to create a comprehensive experience for their users, and so tried to provide a whole range of features that people said they wanted to see. However, this diffusion of effort left the core invitation and new user onboarding capabilities underdeveloped and untested. Those processes were awkward and complex. As a result, users never really engaged in the platform at all, making it impossible to raise additional capital and dooming the business.The Balancing ActFounders need to find a balance between focus and flexibility. It is a Zen thing, like when my Tai-Chi instructor said that my elbow had to be "bent, but not bent and straight but not straight." You need to be laser-focused on your most important objectives right up until the moment you take the considered decision to change them. Never allow yourself to follow a random walk from shiny object to shiny object, but also keep an eye out for the opportunity and necessity to pivot to a new direction when the current one is failing, or you have real evidence that the new course is better.So, my Zen wisdom is “be as focused and disciplined as possible, but not more so.”It is hardly a new thought that choosing what not to do is often more important than choosing what to do. The large number of opportunities combined with constrained time and resources means that you will be saying no to things far more often than yes. For those times you do need to change direction, make sure it is thoughtful and intentional, not reactive and Squirrel!

Watch the video: https://ftb.bz/impostor-videoRead the blog: https://ftb.bz/impostor-blogThe topics for these blogs come from the things I discuss most often with founders. Once they have started to trust me, they almost always talk about how they feel like frauds who will soon be caught and exposed. Even the most talented and successful feel this way. That is when I tell my favorite anecdote from author Neil Gaiman. http://journal.neilgaiman.com/2017/05/the-neil-story-with-additional-footnote.htmlSome years ago, I was lucky enough invited to a gathering of great and good people: artists and scientists, writers and discoverers of things. And I felt that at any moment they would realize that I didn’t qualify to be there, among these people who had really done things.On my second or third night there, I was standing at the back of the hall, while a musical entertainment happened, and I started talking to a very nice, polite, elderly gentleman about several things, including our shared first name*. And then he pointed to the hall of people, and said words to the effect of, “I just look at all these people, and I think, what the heck am I doing here? They’ve made amazing things. I just went where I was sent.”And I said, “Yes. But you were the first man on the moon. I think that counts for something.”And I felt a bit better. Because if Neil Armstrong felt like an imposter, maybe everyone did. Maybe there weren’t any grown-ups, only people who had worked hard and also got lucky and were slightly out of their depth, all of us doing the best job we could, which is all we can really hope for.Impostor SyndromePeople with impostor syndrome engage in a psychological pattern of doubting their competence and accomplishments. In short, they feel like frauds. They attribute any successes or recognition to either luck or deception. A UK study https://www.thehubevents.com/resources/impostor-syndrome-survey-results-116/ shows just how common this is, with 85% of people admitting to feeling inadequate or incompetent at work. Most of those people suffer in silence because they think they are alone in this. Only 25% are aware of the existence of impostor syndrome. Entrepreneurs with these feelings are often paralyzed with self-doubt, harming their businesses and chances for success.I experience impostor syndrome all the time, despite any objective evidence to the contrary. For example: I studied astrophysics in graduate school. I founded a company and brought it to a successful exit. I have been invited to speak at conferences around the world. I have dozens of published articles. I am regularly sought out as an authority on multiple subjects.Yet, I had a hard time writing that paragraph or believing those statements. In particular, I feel impostor syndrome every time I write or record for Feel the Boot.I suspect that impostor syndrome is even more common among entrepreneurs than in the general population. We are high achieving people with high expectations. Our role models tend to be the most successful founders and CEOs in the world, people like Steve Jobs, Elon Musk, or Jeff Bezos. If they are our reference for what we should be as founders, it is no wonder we feel that we fall short. We also tend to surround ourselves with amazing people, far above the average, which skews our perspective on our qualities.Anti-Impostor SyndromeThere is a mirror image to impostor syndrome in a set of people with no doubt about their worth or ability. Interestingly, where people with impostor syndrome underestimate their competence, this other group generally overestimates it.The Dunning-Kruger effect describes this odd relationship where self-assessed competence is often inversely proportional to actual competence. High performing entrepreneurs tend to assume that everyone around them is at or above their level.I think that part of this has to do with knowing what we don’t know. The greater your knowledge of a subject, the more you understand the vast extent of your ignorance. With each increase in knowledge or skill, we simultaneously discover an even larger set of new things about which we are ignorant. In my experience, true experts are humble in the face of the ocean of unknowns they can see.Conversely, people who only know a little often think that is everything there is to know.A Vaccine Against Impostor Syndrome.Just recognizing the existence, and near ubiquity, of impostor syndrome among founders can go a long way to reducing its impact. Thinking of Neil Armstrong’s self-doubt gets me through many crises of confidence.Knowing that we tend to undervalue our true areas of expertise, try to take a hard and realistic look at your abilities. Recognize where you are strong, and hire or otherwise compensate for the areas where you are objectively weaker.One path to recognizing our strengths is to start taking compliments seriously. If you regularly hear positive and specific statements about yourself or your work, believe them!Many of us suffer needlessly with this problem because we think we are alone. Entrepreneurs are constantly selling and pitching, and one of their key products are themselves. We often try to create an image of the perfect confident leader and visionary. It would be healthier for all of us if we could, even just in private with each other, admit and share these feelings. It goes a long way to reducing the burden. The community of entrepreneurs is powerful. We need to leverage our networks for mutual support far more than we do.

When I talk to startup founders or angel investors, one topic has started to dominate the conversations: the lack of A round financing.Video: https://ftb.bz/a-round-videoBlog: https://ftb.bz/a-round-blogPodcast: https://ftb.bz/podcastMany founders and seed stage investors have a story for how a startup will grow. Initially friends and family will fund early prototypes. About six months later, once there is some traction and market interest, angel investors will fund the work required to demonstrate product market fit. Six months to a year after that the company will close a $5 million series-A round that will fund explosive growth.But in reality, it is taking much longer to reach that A round investment, often a number of years. So the CEO needs to find other ways of funding the business until it happens, or skip further funding entirely.I am working with several companies right now that: have working products, that customers like, are growing, and generating revenue. Yet, after multiple years of effort, they still can’t close that A-Round.The problem with A rounds is structural. Funds are getting bigger which leads to larger investments. Investments of any size require a similar amount of work from the VC firm. With a larger amount of cash to deploy and a roughly constant amount of labor available, the rounds need to be larger. Rather than investing $5m, I am hearing that many investors won’t invest less than $15m.Of course, with that larger investment comes higher expectations. Reaching those higher hurdles takes longer and consumes more cash. The entrepreneur typically needs to to back to angel and seed round investors multiple times before they clear them.At Anonymizer, we raised a total of $2.5 million over about 7 years, all from angel investors. The slow growth in the consumer space never got us to a place where we could bring in VC with their larger investments, even in the more permissive late 1990’s environment. As it turned out, that saved us when the market crashed in 2000 because we were small and lean, unlike some well funded competitors who had high burn rates but no prospect for additional money.Other than in the medical space, which seems to have its own set of industry specific hurdles, I am seeing three paths to A-round funding.The first is to be growing exponentially. While 30% year over year growth is respectable, the VC are looking for 30% month over month, doubling every quarter. In addition to that, they are looking for strong fundamentals and unit economics. Finally, they want to see a clear path to continued growth at that pace. With all that in place, the investment decision is fairly easy.Another path is to have the right history or some unfair advantage. If you have multiple massive prior exits investors are much more likely to take a chance on this next venture. Similarly, if you have a rockstar team of people with track records of amazing execution, they will have more confidence that they can do so again. Finally, investors tend to move as a herd. If you have extremely impressive investors in your seed round, they will know the general partners at the VC firms and be able to leverage their reputations to secure the investment.The final path is to create enough track record to remove the risk. If the company has been executing for several years showing reasonable growth and reliable results, it will be in a position where a $15 million investment is warranted and relatively safe.Anonymizer never did raise an A round. Once we did our big pivot towards the national security community we started generating revenue faster than we could effectively spend it. While the VC might have been interested in us, we no longer needed them.Like Anonymizer, you might choose take many small investments until the company is self sustaining. Alternatively, you might be able to bootstrap the business with little or no funding at all.Sometimes the problem with growth is timing. The market forces and conditions are not yet right for your business. If that is the case, and you are confident they will be aligned soon, then just surviving till then can be the right strategy.Finally, it might be a sign that your business model is just not going to work. You either need to pivot to something that will generate the growth you need, or you should wind things down and look for a new opportunity entirely.Fortunately, two companies I have helped recently scored A-Round funding. One through the medical device exception, and the other through the long track record of reliable growth approach.The key is to build your business in a way that it can succeed even if the A round funding take much longer than expected or never happens at all. Model your finances without that investment to make sure the company has a viable plan B for survival and success. In this new reality, angel and seed investors need to see that kind of robust business model.

Almost all successful companies share one thing in common: a pivot. When your startup hits a wall, the best path may be to change direction to go around it, rather than trying to bash your way through. Learning and adapting can be the best path to growth and success.Video: https://ftb.bz/Pivot-videoBlog: https://ftb.bz/Pivot-blog

Entrepreneurs are always enthusiastic about their next business idea. They often avoid asking the hard questions that could undermine their plans. In this episode, I explore the importance of testing your assumptions and how to actually do it. Early experiments will reduce your risk and impress potential investors.Video: https://youtu.be/MLJQMRIIm7QBlog: https://FeelTheBoot.com/blog/test-driving-your-business