in Startups

The only model that matters: Founders First

Screen Shot 2013-02-22 at 8.55.58 AMThere are a lot of models that people throw around for how to build a strong startup community. There are a handful of types of players in each community, so there are many permutations of “who gets what” and how resources are moved around.

It gets complicated, fast.

So there is a model that I subscribe to. It can be a little myopic, it can be a little bit pigheaded, but it is always effective. It is the one metric that matters for startup communities and it is why we back the things we back and why we take exception to the things we do.

In Halifax there has been a recent discussion about a local angel group and their funding model, which we do not believe is founder friendly. Hopefully this post will clarify for some people as to why we see things in such a black and white contrast.

There is a litmus test that can get to the heart of many issues:

  • Does this help founders create more companies?
  • Does this help founders build better companies?

You need a Yes on either one of those, otherwise the effort isn’t worth it.

OK, there are more than just founders in the ecosystem, I know. The truth is however that Founders are the only ones who rely on everyone else in the ecosystem to be successful. Nobody else is so ecosystem dependant. Service providers can always find work elsewhere, investors can always squirrel their money in to safer places.

It is founders and founders only are the assemblers, allocators and creators of resources that make successful startups. It is those successful startups which are the only things that demonstrate the success of the community.

In early 2008 we started talking about how Startups Will Save Venture Capital in Canada. I believe that post and the thesis behind it has stood the test of time:

My thesis is simple: Startups just aren’t getting started in Canada nearly as often as they should. This isn’t about education levels, creativity or even for a lack of cash floating around this country. This is about ambition.

This is about hustle.

Most entrepreneurs have heard that things aren’t great for VCs right now. LPs are shaky, some funds are crashing, others are just throwing their hands up, and for a lot of startups it seems like no matter how many people you pitch, you aren’t getting anywhere. I tried to put some hard number behind that, and they paint a scary picture.

This goes two ways, and nobody wants to sit around while we all whine and moan that nobody can get funded. It’s time to build companies that are worth something.

We need to focus on building our local startup communities more than ever. Local communities are important because they are far easier for local Angels and Entrepreneurs to connect to, and they also act as a great filter to help find people who need national and international exposure.

(Read the rest . . .)

David Crow started this thinking in 2005/2006 when he built the thesis that Community is the framework. That approach has brought incredible success to many startup communities. Founders are the anchor of community. Every year or so we publish the Hot Shit List and we focus on profiling founders who are taking pushing our communities to the next level.

In an community it is the ability of founders to succeed through diligence, hard work and creative thinking that determines success. All encumbrances to founder success must be removed to achieve a sustainable model for growth.

There is no half way, there is no “maybe” there is no “but…” there are just founders. Founders who are picking investors, lawyers, accountants, marketers, developers, product managers, customers and markets. It is founders who develop vision and create early product.

It is only the founders who are tracking their cash, calculating runway and determining what is going to make their startup successful.

So the next time someone tells you that anyone or anything matters then tell them that you will not water down a founders-first approach. Not because someone else needs a little something, not for any reason.

Remember the great founders you know who have struggled against all odds to build incredible companies. Forget the rest and focus on what matters.

  • http://startupcfo.ca/ Mark MacLeod

    Can’t disagree with any of this Jevon, except to make one important point: while the best community building efforts are founder driven, I actually think founders should be more selfish with their time. The single biggest thing founders can do to build great communities is build great companies. Halifax is legit now in large part due to your exit. That along with Q1 and Radian 6 have put the east coast on the map.

    If you can build a great company *and* do some community work, great! But there’s always more that can be done inside a company. So my guess is the best, most successful founders are just hunkering down building.

  • http://startupnorth.ca Jevon

    I didn’t mean for this post to be FOR founders… I am in violent agreement with you. It’s hard, more or less impossible, to be a community organizer while you are a founder. Even right now I have time to get out 2 posts this week but that will probably be it for a while because even evenings and weekend are stacked. Every minute I take away from the job I have to do is just that: a minute gone.

    The audience for this post is really everyone else. I think that because founders are (and should be more) selfish with their time, community contributors tend to shy away from engaging with them. So it is easier to kumbaya on policy, etc without really finding out what drives founders.

  • http://startupcfo.ca/ Mark MacLeod

    We are missing that 1st generation of successful founders from our industry who could now be in a position to give back and who would know what today’s founders need. 

    Most Canadian angels made their money in a different industry. They don’t totally get what you’re going through. They haven’t been there. It’s starting to change though.

    Ryan from Hootsuite is investing now. Dan Martell has been for a long time. Dan Debow too. When you have a lot of folks like that investing and community building, then you’ll see things happen.

    Similarly, there’s a changing of the guard taking place in Canadian VC with the new fund managers all having operating backgrounds. 

    All the other stakeholders should provide sponsorship $ and venues but otherwise leave the work to the folks that best know what’s needed.

  • http://startupnorth.ca Jevon

    I don’t know if we are agreeing or not but I think so ;)

    and yeah: We are getting rid of all those bad VCs!– I hear they are just going to work for companies in Toronto now! :p zing

  • http://startupcfo.ca/ Mark MacLeod

    Well played sir. 

  • http://twitter.com/danmartell Dan Martell

    Jevon, you nailed it.

    TL;DR:
    – It’s our problem to solve
    – Without founders, there is no community – so start.
    – Success is the best way to impact change—I was telling a local newspaper recently that I don’t feel like the government should be trying to solve these problems for us – they need to come and be lead by the entrepreneurs in our community, as it’s the only way that’s ever been successful.  [French | L’Etoile https://www.evernote.com/shard/s4/sh/3f60162f-0370-4313-b719-8df6df33b149/72fa850b5571a12385b4cfd1f3d6b2ad]YC, TechStarrs, 500, GrowLabs, PropelICT etc were all started and ran by entrepreneurs.  I find it ridiculous that we have government officials telling first time entrepreneurs what’s a good or bad idea – or even worse, how to approach it.The solutions needs to come from the community.  You and the rest of the crew at StartupNorth have shown us that.Here’s 2 big ideas …I think we forget as founders how truly special we are .. and obviously I’m biased :) .. but it’s true.  A while back it hit me that entrepreneurs get up everyday to create a better world for the rest of us to live in.  It doesn’t matter if you’re starting a lawncare company, a non-profit or a tech company – you started it to solve a problem in a way only you envisioned – and I truly appreciate that.Also, .. and we sometimes forget this.VC’s and investors don’t have a job if founders don’t start companies.  We are their customers, they work for us.  We create the value and hustle each day so they can generate a return for their LP’s.  Without us, they don’t have a job.  We must not forget this.To wrap it all up … yes it’s our problem to solve, but I also know the best way I can impact my region is to create a huge meaningful company, share my story and make myself available to those who aspire to do the same.  We need more founders to tell their stories and connect in real life with the next generation of founders.That’s what Silicon Valley does so well .. you can’t through a rock without hitting an entrepreneur who’s raise $$, or sold a company.  There’s folks in the area who’ve done it – it’s our responsibility to tell those stories – the real ones – to inspire more folks to start.my2cents.@danmartell:twitter 

  • http://chrisarsenault.wordpress.com/ Chrisarsenault

    Yes, Founders first. We back Founders. The most successful VCs, were successful because first the Founders were successful. And yes, tech Founders are more successful when backed by strong VCs. At least, that’s how it works in my little world. Founders aren’t beggars, they are builders. “Founders need to focus on what matters” to succeed, and it’s a long road from launch to growth. Founders need to hire the best and replace themselves, or start with dividing their responsibilities, when the time is right. Founders make Communities thrive, but they don’t manage them nor invest all their time in them. Communities are built right when many successful founders start giving back to a select few emerging entrepreneurs (with coaching, mentoring, or as angels), not when they dilute themselves across the board.

    Now, let’s talk about “Employees first”. A Company’s most valuable asset. Building the best team of focus and competent people, passionnante and driven, people you trust. Building a team that can deliver on a vision, an idea. Those driven individuals that without, no Founder can succeed. Without the right employees, Founders wouldn’t even have a job!

  • Saeed El-Darahali

    Dan & Jevon: I agree with you guys 100%. Without founders, communities are never built and the next founder will make the same mistakes we did during our start-up journey. We must continue to share our knowledge and inspire more folks to start companies to help keep my old profession, VC, alive and well. My rule of thumb is to spend at least two days a month helping another start-up or speak at an event.

  • http://twitter.com/GilKatz Gil Katz

    It’s amazing that the stuff around a concept (suppliers, funders, etc.) can actually get people confused about what the concept is.. I guess that’s a fascinating ‘confusion theory’ – with enough BS it is possible to make even the most simple thing very confusing for people. It’d actually be very funny if it wasn’t so destructive. Obviously building a company is about building a company. What else could it be about? Just focus on building your company and you will have a company.. just mind your own business, because no one else will do that for you.. nor should they.. they are just very good at minding their own business.. probably better than you thus far if you are still discussing this concept.. very funny. ;)

  • http://twitter.com/GilKatz Gil Katz

    A simple way to look at it is this – a friend once told me that if you go into a room and find lots of B.S., there must be a Bull somewhere.. so keep on looking, you’re getting close.

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