Author: Jonas Brandon

There 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.

We always glorify the struggle of the entrepreneur. Late nights, poor diet and little contact with friends. It’s cliche because it is real but we gloss over just how big of a toll it really takes.

Last week I was having a drink with a recently exited entrepreneur. His last exit was a biggie at $700m+. It seemed to be amazingly well executed from the outside but as we dug in to his story over a few hours I was amazed at how much I could relate to all the ups and downs and how tenuous his hold on success was the entire time.

Here are my top things that a young (first to fifth time) entrepreneur never tells you when they are in the thick of it, and they are the things you will never understand until you are there. Not everyone deals with each of these things, but the more I talk about it openly the more strongly I feel that it is the norm, not the exception.

The focus is debilitating

“He/She is focused!”, “Man, they are hustling!” — you see an someone in action, executing rapidly and firing on all cylinders. You feel like you go to sleep and when you wake up the entrepreneur has already taken it to the next level. How do they do it?

When you start operating and you can feel the business working you get overtaken by a myopic focus that drives you from one thing to the next. You can see everything in the path in front of you: Obstacles, opportunities and a sense of momentum. To maintain such intense focus though you have to take your focus off other things, and everyone has to choose. Health, friends, family, hobbies. Nobody de-prioritizes any of these things but the problem is you don’t realize which decisions you have made until they are well behind you.

Entrepreneurs can end up wracked with guilt and wishing they had done things differently.

The focus is what gives you the highest highs, but drags you in to the lowest lows. Every win seems gigantic and every loss feels equally consequential and that is because of that myopic focus– you only see a few things in front of you and it takes a lot of maturity to be able to focus on the longer term.

The lows are real

No matter how many highs you get, most entrepreneurs feel some incredibly low times. Almost universally we put on a very positive public face and you would rarely know, but the more time you spend with fellow entrepreneurs after they have left their latest startup, they are more open about talking about those dark days.

For some of us it makes it feel impossible to get out of bed, sometimes you just can’t bear another meeting. Some founders get angry and lash out, others just hit the bottle way harder than they want you to know.

These dark periods can last an afternoon or they can last a week. They are only multiplied by the unshakeable focus I talked about above. The focus narrows even more and an obsession with certain metrics or ways out of the trough can develop.

A manic nature develops and you start to seek the next high. You come out of the low with a focus on something that you know will give you the high you need and you drive towards it harder than most normal people would.

You feel alone and you are alone

I think a big reason founders move to San Francisco or the Bay Area is because you can at least find hundreds of thousands of like minded people. You feel just a little less alone while you are single handedly taking on the world.

You learn quickly that you can’t take your problems home because one day you are up and one day you are down, or you might be both on the same day. It doesn’t feel fair to put that on your partner, and if you did they would eventually get tired of it after years of constant ups and downs.

You toughen up and you bottle it up. You are afraid to really talk about things because you can’t afford to open the bottle– it might knock off your focus and set your company back. That’s a no-no.

The best investors in the world know that entrepreneurs have this loneliness and they take time to give you a safe space to vent. Almost nobody else can give you this safe space and it takes a lot of work on both sides to develop a level of trust that allows it.

Failure isn’t an option

Failure is OK. We all know that. It’s a powerful learning tool and it is a required piece of the long term success of an entrepreneur.

Holy shit it is scary though.

You are paying salaries, the people you are paying have families and they rely on you. Your investors backed you for a lot of reasons, but you feel like you have to deliver for them.

Your customers are relying on you.

You WANT to succeed this time, you don’t want to have to go through another cycle looking for a success.

It feels overwhelming and it weighs on you. We try to relax and blow off steam, but the feeling that it’s all on you doesn’t go away.

Nobody tells you it is going to be easy, but I think a few of us are surprised by just how much of a toll building a startup can take. Maybe it is hard because it was just never meant to be easy? Who knows.

Keep at it.

Building a startup is hard and managing ops is really hard. Devops are hard and expensive.
Luckily these days there are some amazing companies making it way easier to build the startup of your dreams. Frankly, I don’t think they are getting paid nearly enough while some are getting paid way too much.

What apps are a key part of your day-to-day and which could you live without? 

GitHub – Paid: $50/month. Should be: $500/month
GitHub is the lifeblood of our dev team. Everything lives in it and it has allowed us to avoid hiring devops for years. You can hack it, glue it and spew it all over the place. All the while it is secure and reliable, almost never letting us down. It has a ton of “good enough” features like Issues and the Wiki and they are “great” because they integrate right in to the most important parts of GitHub.

I want this company to live a long and healthy life. May they never be acquired and may they reign for all time.

HipChat – Paid: $2/person/month. Should be: $150/month all-in
We have a love/hate relationship with HipChat. We wrote our own robot which connects GitHub in to Hipchat and that is useful for managing a big chunk of our dev process. Hipchat also does a great job of maintaining conversation history, so we can find almost anything we need to in those “what was that thing?” moments.

Hipchat does however have a horrible Adobe AIR desktop client and one of the worst mobile clients I have ever seen for chat. HipChat on the iPhone has no sense of message status. It tells you “you have a new message!” but then you have to, literally, hunt every chat room and look for a new message. It is also extremely slow to load. We call this “Hipchat anxiety” when we are out of the office. If they can fix these issues then it would be a huge positive for HipChat users. The reason I should have paid HipChat more is because it is clearly useful but they also clearly need the money in order to improve the product.

Google Apps – Paid: $50/user/year. Should be: $150/user/year
I cannot overstate how awesome it is to have Email, Calendar and Docs out of the box for every new employee. Rock solid service and the apps are always improving. It saves having to buy a MS Office license for every new hire and it has collaboration/sharing baked in. Google apps I love you and I will never hurt you.

Skype –  Paid: nothing. Should be: $30/user/year
Skype has been free for Skype-to-Skype for so long that I think Governments would be ousted if they tried to charge for the basic service, but wow we used a lot of Skype calls in the early days. Skype video chat is still the best, even if Google Hangouts are getting better, and it’s very reliable.

Trello – Paid: I don’t think we do. Should be: Something more than $0

Trello polarizes. Some love it, some hate it. We clearly love it because we use it to prioritize anything and everything. We should be paying something.

Things we paid too much for:

Some apps are just too expensive for startups and really aren’t worth even doing the free trial.

My cellphone. Paid: $60 to $600/month. Should be: $60/month.

A cellphone bill strikes fear in to a startup’s heart. You make a few trips out of the country and you are greeted with a gigantic roaming bill when you get back. You aren’t the bankers and the lawyers that the phone company is targetting with these crazy roaming rates but you still have to run your business and you need to be able to communicate while you are on the road. I wish I could have just paid a consistent amount that would have let me plan for cellphone expenses.

Box.com. Paid $15/user/month (and tricked in to a 1-year contract). Should be: $10/user/month with no contract.
Box does this thing where when you sign up for a paid plan they have you click a box that says “I agree to the terms of service”. When you go and look at that terms of service it commits you to a 1-year contract. It really is absurd. Other contract-based SaaS providers are much more transparent about contracts. Dropbox was a cheap alternative that we used even though we were paying for Box.

Webex/Gotomeeting. Paid: didn’t. Should be: cheap.
Even if you are a co-browsing startup you need screensharing occasionally believe it or not. We avoided using it mostly but when we did need it there were much better and cheaper options than Webex or Goto.

One thing that has really been exciting for me in the last 3 months has been the Salesforce Foundation. When Marc Benioff founded Salesforce he committed 1 percent of stock, 1 percent of employee time and 1 percent of licenses to charity. It’s an incredibly small amount of equity and resources but it has had an amazing impact. Google and others have copied it and it has become a widely used model.

I wish I had done the same thing with my most recent startup. I could have benefitted a charity I am passionate about with very little burden to me or my investors. It’s powerful but it is hard to do. Legal structures, convincing co-founders, convincing investors and then there is all the overhead and work of setting up a foundation and managing it.

The Upside Foundation is launching to make that easier. They are creating a foundation structure which you give options to which convert on an exit and The Upside Foundation then donates the proceeds to charity.

The model is simple and powerful – early-stage companies donate stock options to the Upside Foundation, convertible at exit into a small portion of their equity. When a liquidity event occurs, the Upside Foundation sells its options and donates the proceeds to charities in Canada.

The Upside Foundation board is full of some of the best investors and entreprenurs in Canada, including  Rob Antoniades (ON), Mark Skapinker (ON), Mark Macleod (PQ), Gerry Pond (NB) and Ben Zifkin (ON).

I’m excited. Let’s start giving back while we build amazing companies right here in Canada.

Dave says we can’t all be founders.

He’s probably right. At some point though, I decided that I wanted to be a founder. Lately I’ve been thinking about why it has been so important to me over the last 10+ years to keep at it, even when it didn’t make a lot of sense.

A lot of different things have driven me to be a founder, I’ll try to be as honest about them as I can.

A need for control: Don’t get me wrong on this one. I don’t need to control others. I think you could ask any of my current co-founders and they would tell you that I don’t need to control, I just need results. What I do need control over however is my own life. Every morning I wake up that I am ploughing my own path I am happy and ready to take on the day. The moment I sense I have lost that control I am anxious and ineffective.

A desire to make a lasting difference: There are few things I can do to make a difference, but I feel strongly that providing awesome opportunities for other people to fulfill their own dreams can make a huge difference. I want nothing more than for those who come to work in my startups to see it as a place they can achieve their dreams. Watching people buy homes, raise families and pursue their own passions is probably the most rewarding result of all the work you pour in to your startup.

Watching people grow: The first feeling of failure when a startup is going sideways is always the sense that you are letting these people down. Startups are demanding and gruelling for everyone. It’s inspiring when these early employees suffer through long hours and low wages with you, but it is the never ending belief that you can make their lives truly better in the end that drives you to keep pushing and often asking for more when you know they have little to give.

When a startup is going well you get to give people new opportunities and the great thing about people is that they seem to thrive in new situations. Hard problem? Tough decision? If you’ve hired the right people then you never think twice about letting them dive in to the thick of it.

Working with the best: Simply put: I never have to work with anyone other than those who I think are the smartest, most honest, diligent and incredible people I could meet. Every single one of them amazes me in some way every day and I am a better person because of the example they set.

Constant learning: There are brilliant people everywhere in the startup world. I think they are more varied, interesting and available than any other community I have been a part of. I love it. I leave every coffee meeting, late night drinks and impromptu meetup feeling like I have learned something new. I love that feeling and I love being a part of a community that provides it.

Never knowing what’s next: I have no idea what my future holds. I really don’t. I know I am married to a woman I love dearly and who loves me back. I know I have a family I love and can rely on. Those are just about my only constants. Some people call it “instability”, but the founders I know thrive on it. You aren’t going in to the darkness, you are hurtling towards some future you have dreamt up on your own and which you will achieve for yourself, no matter what. Whatever that might be.

We can’t all be founders, but what drives YOU to break out and become one?