FOMO FOREAL?

A founder recently asked for my advice about creating hype and FOMO while fundraising, stemming from a post making the rounds in entrepreneur circles. Their take was…

“Based on the article, we should pretty much stop engaging with VC’s at the moment as we’re not (actively) fundraising, that information is a currency, and a certain amount of mystery seems key. Better to disengage entirely for the best chance of success?”

Something didn’t sit right, I better have a peek at this article – is it really suggesting founders not to engage with investors until actively fundraising?

Most of the advice is solid: a ’sherpa’ can help with introductions and navigate discussions, other investors suggesting a ‘hot deal’ creates urgency, craft your story based on current trends, don’t waste your time with tons of investor calls, be creative when attracting interest. Yep, that all resonates.

But this founder (and quite a few others, I’m told) focused on ‘intrigue is an asset’ as a key takeaway. If they plan every interaction, minimize casual interactions, and fill an investor’s mind with good news, then mystery and the magic of ‘limitless potential’ is created. Which then leads fo FOMO and ultimately investment.

In essence, unless you’re in total PR mode when speaking to investors, they’ll find out your company is a complete disaster and never invest in you.

To me, it felt like used car sales tactics more than finding a decade-long business partner and board member. But maybe I’m missing something? Perhaps the combination of planned, formal, mysterious, and good news is indeed the path to creating FOMO and raise a round?

So I called several investor friends (7 in total, all Partners of active VCs) and asked for their take on FOMO and relationships during fundraising. How did they source their best investments? How do they advise founders to fundraise? What % of their deals are FOMO related?

Instead of writing a slick post or creating an ultra-hip tweetstorm, I’m directly passing on the feedback I shared with the founder who initially asked for fundraising advice. It’s a combination of these 7 investor conversations and my personal experience. I hope it helps on your fundraising journey… may the FOMO be with you 🙂


1) Fundraising is about building a relationship over time, based on genuine/open/honest conversations (eg lines not dots)

2) The goal is finding someone you can spend a decade+ building with, who adds much more value than just money

3) Building investor relationships can have upsides other than fundraising, like introductions to potential revenue/staff/etc

4) Investors have seen it all (startup ups/downs), they see through planned ‘good news’ interactions (eg “the shit comes out in DD”)

5) A too much intrigue can set expectations too high, create trust issues, and even kill a deal that would have gone through

6) Instead of being ‘mysterious,’ think about frequently reaffirming the big vision (1/3) while sharing wins (1/3) and struggles (1/3)

7) Short term FOMO (eg mainly dark until fundraising) does happen in +-25% of rounds, vs 75% based on long term (9+ mo) relationships

8) This kind of FOMO is usually because of serial exited founders, incredible team, insane traction, or significant market change

9) FOMO fundraising can work, but there’s high risk if the market doesn’t form and you’re left with limited relationships to fall back on

10) When a FOMO fundraising ‘works’, it’s hard to push through IC, the dynamic can be off, and there’s limited rapport to work from

11) Optimal rounds are pre-emptive offers (with others then bidding), which entail some kind of dialogue and relationship

12) Treat fundraising like business development by segmenting your list into A) 5-6 top prospects B) 10-20 decent potentials, C) 40+ all other leads

13) ‘Massage’ deeper relationships with an A list YOU choose, vs 20+ surface exchanges with ‘time-wasting’ incoming interest

14) Spend time being top of mind with existing investors, frequent ambassador mentions to your A list go a long way 

Let’s address workplace bullying

Bullies suck. 

That kid at school who steals your lunch money. Or the one who calls you names. Or the teacher who shames you in front of the class… Yeah, bullies come in all shapes and sizes.

But what about bullies in the workplace?

Over the past week, multiple people told me they’re being bullied at work. They used phrases like someone is ‘challenging to work with’ or ‘has strong opinions’. But let’s be honest, in many cases it’s plain and simple bullying.

Let's be honest, in many cases it's plain and simple workplace bullying. Click To Tweet

A guy I know works for someone who uses their position of power to disparage him in front of colleagues and prohibits him from expanding his personal network (eg tying him to the job). To me this is bullying.

A woman I know had an employee ‘make friends’ with a senior colleague, then convinced this friend to spread rumors that she wasn’t a capable manager. To me this is bullying.

Another friend told me they felt obliged by superiors to stay out late drinking night after night while traveling for work. To me this is bullying.

Most recently, someone said their boss pokes fun of how they dress. To me this is bullying.

Child bullying both at school and online has been a hot topic in recent years. It feels like the public acknowledges the problem and has put solutions in place both to suss out bullies and support those affected.

Why hasn’t workplace bullying been addressed?

Don’t bully parents lead to bully children? Could we stop this vicious cycle at the source? Yet, how many companies even define what workplace bullying is, no less have a procedure to take action against bullying?

Don't bully parents lead to bully children? Could we stop this vicious cycle at the source? Click To Tweet

HR policies mainly focus on sexual harassment, bribery, etc – slightly more cut and dry situations. The subtle tactics bullies take to exert power, intimidate, or humiliate are difficult to report, but lay the groundwork for a toxic culture. They also often directly lead to more serious infractions.

Companies should have a plan in place to ensure their culture doesn’t accept bullying. Add an anti-bullying policy to your handbook. Include a question in your 360 reviews for bullying feedback. Highlight examples of unacceptable subtle bullying behavior during onboarding.

Most importantly, don’t treat bullying as two colleagues simply not getting along. Someone being bullied doesn’t want to directly ‘face’ their bully – that’s the problem… bullies are HARD to face! HR needs to directly address the bully, communicate the unacceptable behaviors, and set immediate corrective actions that if not followed will lead to termination.

Nobody should begin their day worried about being bullied. We seem to acknowledge this for children, now it’s time to move to the workplace.

Nobody should begin their day worried about being bullied. We seem to acknowledge this for children, now it's time to move to the workplace. Click To Tweet

Rewarding users for jumping ship?

I have been frustrated after being a long time user of a service and recently deciding to leave. When finally clicking the ‘cancel’ button, I have been taken to a screen like this…

In this case, I’ve been a member of audible for 3 years, paying a monthly fee and accumulating credits to purchase audiobooks. The day I decide to cancel my membership (huge backlog of books) is the first time I’m offered a discount.

How frustrating. It actually makes me feel like an idiot that I didn’t push that cancel button every few months for years – saving myself 50% every so often.

The same thing happened when I recently switched my phone plan. I had been an O2 (big UK carrier) customer for 7 years and never offered a discount. When I called to cancel, all of the sudden I’m offered 30% off for the next 18 months? Wow.

Why are solid long-term users rarely rewarded, while users who try to jump ship are offered a deal?

Why are solid long-term users rarely rewarded, while users who try to jump ship are offered a deal? Click To Tweet

It feels like retention marketing has become such a science, while incentivizing loyalty is almost never considered. How often have you ever seen a subscription service decreasing the price every year as a ‘thanks’ for being a valued customer?

SaaS company challenge: on your pricing page explicitly state that customers who renew their subscription after the first year will be offered a 5% discount.

Over a few days, do your initial signups increase? Do any other quantifiable metrics improve? I would guess at minimum long customer loyalty and positive word of mouth improve – two hugely important factors, which not coincidentally are some of the hardest KPIs to track.

A Message from Amazon Customer Service

Tara and I are just back from another holiday trip to the US, where we split our time between the arctic tundra of Milwaukee (my parents) and the Siberian windstorm of Omaha (Tara’s parents).

It’s great seeing family and friends, but exchanging dreary London for 10 days in snow, wind, and Christmas ‘cheer’ often leaves us yearning for a post-vacation, vacation.

One of my most anticipated presents this year was an Amazon Echo, so when landing back in London I quickly set it up. With sun and swimsuits on my mind, one of my first searches was:

“Alexa, what is the temperature in Mallorca”

To which Alexa replied “I wasn’t able to understand your question”

Strange, since Alexa knew the temperature in London, Dubai, and Chicago, I assumed the word Mallorca just wasn’t being understood.

So I in the Echo companion app and flagged my Mallorca question as not being answered. Within 3 hours I received the response below. It was not only one of the fastest responses I have ever received, but also the most thorough.

I am incredibly guilty of naming and shaming companies I’m not happy with (cough…Tesco…cough) without highlighting exemplary experiences.

In this case Amazon gets a huge amount of credit for its customer service experience. I read Alexa quickly went from 1000 to 7000 search query types, and I’d bet this will increase exponentially with this kind of attention to customer feedback. Thanks for the help Amazon!

Alexa quickly went from 1000 to 7000 search query types, and I’d bet this will increase exponentially with this kind of attention to customer feedback Click To Tweet

On Sat, Jan 7, 2017 at 9:54 PM, Amazon.co.uk <cs-reply@amazon.co.uk>

Hello Andrew,

I’m sorry that Alexa is not understanding the word ‘Mallorca’.

To help you, I’ve replicated the same at my end using below command:

“Alexa, what is Mallorca”, and Alexa couldn’t answer.

I’ve also tried with different commands and phrases like “Alexa, Mallorca” and also tried asking via Wikipedia such as:

I asked: “Alexa, Wikipedia”

Alexa replied: “what should i look up”

I asked: “Mallorca”

Even after trying with all different phrases and commands, Alexa couldn’t understand the word ‘Mallorca’.

However, please understand as the device was recently launched in the UK, there are few improvements that are yet to be introduced in the device. Our technical team is working hard to make Alexa more user-friendly.

Thank you so much for bringing this to our notice. We love to hear from our customers on all aspects and I’m glad that you took time to write to us with your valuable feedback.

We are trying to plan a huge update soon which improves Alexa interaction with user and fix few other bugs as well! However, I’ve specially forwarded your message to our Amazon Echo development team for consideration as we make further improvements.

Please be assured, once the feature is implemented or any improvements made in our next updates, we’ll try to notify you through the best medium of notification via software updates.

For the meantime, please extend your patience and co-operation while we work on this.

If you have additional suggestions for improvement, please write back to us.

Thanks for using Amazon Echo.

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I love August

August in Europe

Yesterday was the first weekday this year when I had nothing in my calendar.

No meetings, calls, coffees, flights… nothing. It was GLORIOUS!!!

Every year I tell myself I’ll schedule 1 full day each week with no planned activities so I can clear my mind, think strategically, and work on long-term projects. Until yesterday it had been 215 days in 2016 with no such free days. Shame on me.

The great thing about Europe is almost everyone is on vacation the entire month. Since the summer holiday in some countries starts mid July and in others it lasts until early September, so it’s actually closer to 6 weeks of relative downtime.

I know American’s look down on this ‘frivolous’ European month of time off, but for me it’s great. Not only can I reliably catch up on things, it’s as if those of us who work get a slight leg up on the competition (whoever that may be). Kind of like getting up early to shoot hoops while everyone else sleeps.

Remember, the European norm is 25 days off a year. So from a GDP standpoint it really does make sense if most people are generally away at the same time. The alternative for a 10 person team is someone being gone every day of the year, which certainly seems less productive.

How will I spend the rest of my August? With Tara heading back to the US to meet her sister’s first child and 5 more days with a free schedule, I’ll have plenty of time for whatever I choose.

The past few days I used my extra time to write. I find having the time to write concisely forces me to think deeper than usual about a topic. Incredibly enough I have 130 blog ideas in my Evernote, so lets see how writing at least 1 hour a day goes and maybe I can get a few of the better posts up.

Help us build a life-changing home

New Story

I recently came across an amazing podcast by the founders of NewStory – a non-profit that is building safe, long-lasting homes for extremely poor families in places like Haiti and El Salvador.

It’s moving to say the least how NewStory is changing the lives of full communities. This holiday season my wife and I are leading the charge to build one new home for a deserving family.

NewStory isn’t your typical charity. Here’s why:

1. In addition to building hurricane-grade homes, Newstory creates the infrastructure for entire communities to thrive- including schools, sanitation, and renewable electricity.

2. 100% of donations directly fund home construction – all overheads come from other sources. You can even see a full breakdown of the expenses after building over 150 homes.

3. Each donation helps a specific family. Once we reach the goal of $6,000 to build a home the family records a video for us to hear their story.

So this season we’re making one simple request: help us change the life of a family in need. Your support is much help 🙂

Help us build a home >>> https://campaign.newstorycharity.org/andy-tara

How to ‘Prime’ Your Next Event – because intro requests are so last year…

(A not very subtle way of priming your brain)

(A not very subtle way of priming your brain)

 

I’ve been transient the past few weeks, starting in the US (beautiful La Jolla, CA), then Italy, Ireland, and Spain, and I’m writing this on my way home from Germany.

As I sip my Easyjet tea and snack on some delicious popcorn, I’m realizing each of my trips was for a specific event. The largest being Web Summit with 42,000 other tech folks and the smallest was a group of potential Startupbootcamp program investors (1).

Yesterday I gave a talk to 20 startups about making the most out of mentor-focused events. One tactic I suggested is connecting with mentors prior to an event to increase their interest during the actual meeting (2). The word I use for this pre-event reach out is to ‘Prime’ someone (like priming a pump) – borrowing the term from the homonymous cognitive bias known as ‘priming’ in the psychology realm (3).

Prime on your own?

If you missed the shitstorm prior to Web Summit, it surrounded startups being told they ‘won’ exhibit space, while later being hit with a bill (I think €1,000 or so). Although Web Summit was called out by seemingly everyone (and Web Summit messy response) I generally think they run a decent show.

I joined in the conversation of course:


As you can tell, I’m a big believer in putting in effort to Prime. However, I’m just now noticing that during each of my recent trips the amount of priming SOMEONE ELSE did for me were my most impactful priming outcomes.

It’s like dating, for business

Not only did someone else priming for me lead to better results, I’ve found the best possible outcome was not directly connecting with someone prior to a meeting. Instead it was exponentially more valuable having the person primed by someone else LOOK FORWARD to meeting me.

Of course a friend saying to a contact “can I connect you with this this great person” has a bigger impact than introducing yourself. But taking this a step forward, even better might be “you’ll really enjoy meeting this great person tomorrow” without any offer of an intro.

It’s like word-of-mouth marketing (“you should really try this”) before meeting someone. Put In practice, instead of a typical intro request you might ask someone to speak favourably about your company to an investor… in hopes that the investor can’t help but reach out to you directly.

How to increase recommendations prior to an event where you’ll likely meet someone? Probably the same tactics work as asking for an introduction, the ‘pitch just needs to ask for an endorsement instead of an intro. Something like this may work for you:

Hey <FRIEND>,

I’m heading to <EVENT> next week, and I’ll likely bump into <CONTACT> who I know you’re close with. Any chance you could ping them a note with a quick endorsement like below? It would mean a lot and I’m hoping more valuable than me asking you for an intro.

*
A friend of mine <YOU> just mentioned he hopes to connect with you at <EVENT>. I just wanted to say they’re working on something really interesting and definitely going somewhere – I hope you two have a chance to connect.
*

Much appreciated!

<YOU>

Give it a try?

There’s no doubt in my mind that reaching out directly prior to meeting someone (i.e. ‘Priming them’) leads to more personal connections. Even better is having a mutual connection introduce you.

What I’ve experienced is that having someone speak favourably about you without an introductory offer results in the best possible outcome. Although I’ve never actually tried to ‘manufacture’ this type of endorsement, I’ll likely give it a try (what can it hurt?). If you do as well, I’d love to hear the outcome.

(1) The new program is still a ‘secret’, but let’s just say it was successful and we’ll be launching soon 🙂

(2) Instead of suggesting startups prime their mentors just before the event, I really should send that suggestion well before the event, so they at least have a chance to take my advice…

(3) I know, it feels a little dirty to exploit cognitive biases (aka mind loopholes) in business – but heck, it’s not the worst thing you can do!

Look to the future

The future - This way friend!

Man have I been traveling a lot the last few months. Sure it’s tiring, but the energy from meeting awesome people around the world definitely makes up the difference.

I recently met two of the coolest Japanese guys ever, Masa and Taka, who invest in European startups for an enormous corporate called Recruit (1). We were in Copenhagen together last week eating dinner when Masa gave me an insightful quote:

Masa’s insight was the majority of conversations focus on things that have happened. When first meeting someone it’s ‘where are you from?’, ‘what do you do?,’  ‘where do you live?’ After a rapport is built the conversation turns to ‘what’s new?’, ‘how’s the significant other?’, ‘still hate your job?’

Rarely does the question ‘where do you see yourself in 5 years?’ come up. These future looking conversations are surely the most insightful and way more fun than dwelling on the past. But for some reason they’re difficult to bring up, even with close friends.

Looking back at my conversations with entrepreneurs, even these are more about fact gathering than forward looking. ’Who’s on your team?’ ‘How big is your market?’ ‘What’s your traction?’ All valid questions, but for investments that won’t pay off for 7-9 years shouldn’t I be focusing more on an entrepreneur’s vision for the future?

So, with the remaining 5 weeks of 2015 I’ll strive to have 50% of my conversations about the future. If all goes well, hopefully this past/future ratio will become a norm. Want to join in on my little test? Let me know 🙂

(1) 28k people company, just IPOd to raise $1b – most will be for investments

I’m now a Quoraian, hear me ROAR!!!

Quora-lion-ROAR

Wow the past few months have seriously flown by… so many places to be and so little time. It sure does help my trips are to Istanbul, Amsterdam, Copenhagen, Berlin, Dublin, and many other fun cities!

Fear not, even though I haven’t posted on my blog I am still writing occasionally. Here’s something I wrote on Quora yesterday (1) as a response to the following question:

“Why do new entrepreneurs feel that they cannot make it without participating in an accelerator program? Isn’t being an entrepreneur about succeeding against all odds?”

Check out my answer here, and if you likey feel free to upvote: http://buff.ly/1tbWtuy

(1) Yes it took some badgering from Cami who leads SBC’s social media… guess I owe her a thanks 🙂

The experience of NO

Leon London

Over the span of 30 minutes this morning I was rejected twice.

My friends know this isn’t a unique experience for me. I’m not ashamed to ask for what I want, and I typically don’t mind being rejected. I get it – avocado can’t be added to every meal. But I’ll sure ask to see if it’s possible.

The key phrase is I ‘typically’ don’t mind hearing the word NO. There are a few exceptions… mainly when the NO is based on protocol I don’t agree with.

As you might guess, my morning rejections were based on protocols. However both had polar opposite different outcomes.

Rejection 1

The UK government believes everyone is a money launderer until proven innocent (1) and requires UK tax payers to provide a certified ID. Their guidance (2) first suggests a bank for ID certification, so this morning I stopped by my trusty (cough) bank HSBC (3).

In I walk on this sunny morning and within seconds the HSBC greeter relates they don’t certify IDs – ‘it’s a policy’

Undeterred, I explain I’m a 5-year customer and can answer all necessary security questions. Nope, it’s a HSBC policy she repeats, and then comments that her bank Lloyds (4) does certify IDs. I understand she doesn’t have power to override policy in this situation and ask for a manager.

After a few minutes over walks a nice woman who repeats HSBC policy of not certifying IDs. She’s the manager of course, and her extra insight for rejecting me is to prevent money laundering.

This sets me off a little – THE WHOLE REASON for this certified ID is to prevent money laundering. However, no manner of reasoning break this bank manager’s policy today – it’s a lost cause.

Rejection 2

So off I continued on my way to work, into the tube, past Prince Harry (5), and then a stop at my favourite quick breakfast spot Leon.

I often stop at Leon for my favourite egg, salmon, and avocado pot (6), and at £2.95 it’s a steal. I love my morning Leon pot, but they don’t quite fill me up. I’ve always wondered… could another egg be added to this pot, and if so would this indeed fill me up.

Without much consideration I indeed asked for that extra egg in my pot. Boy would a 2-egg pot be wonderful – twice the fun! To my surprise the friendly till clerk says he can add an egg, for the additional charge of £1.95.

I do some quick math, and although the egg is likely the least expensive item in the pot it would raise the total price substantially. I counter offer £1.05 with this cheap egg rationale to bring my total cost to €4.00 – surely a reasonable price for a two egg salmon avocado pot.

This is when my second rejection happens, although the till clerk is friendly he won’t break the till pricing protocol. So I pay and we go our separate ways.

The difference of NO’s

I’ve now had two policy-based rejections in quick succession, both which annoyed me for being inflexible. But while the first at HSBC really ticked me off, the second at Leon didn’t bother me much – it was worth a shot after all.

As I finished my pot the till clerk gave me a smile and asked if enjoyed it. I indeed did – “Yep, I have one often and will come back again.”

He then stuck out what I initially perceived as a shake attempt hand, but quickly noticed a red loyalty card being offered. This was not a normal loyalty card – this one was FULLY STAMPED and provided a free meal!

“Next time please have that two egg pot on us” the till clerk said and waved goodbye.

Seize the moment

Wow, what a nice guy, leveraging his loyalty card stamp power to compensate for what I perceived as an unfair policy.

In business school what this clerk just pulled was the ‘make my day’ approach to customer service. Something Zappos (7) is often commended for using.

Continuing my short walk to work I thought about how easily HSBC could have changed my negative rejection experience to positive. A few simple steps could have been:

1) Sharing my frustration by mentioning their policy was very strict
2) Offering to complete a customer feedback form stating my dissatisfaction with the policy
3) Directing me to the closest alternative for obtaining a certified ID
4) Walking with me to the ID certification while asking how to improve my experience with HSBC (8)

A little bit extra

On one hand it’s so easy to make a customer feel like they’re special. It typically costs very little and takes no more than a few minutes.

But personally engaging with customers requires quick thinking in an often monotonous, transaction based role that’s compensated based on productivity.

My takeaway from this rejection-filled morning: going the extra step is always the right choice. Whether it’s customer service, helping a colleague, or following up with mentors – a little bit extra goes a long way. (9)

Have you gone the extra step recently with success? I’d love to hear about it in the comments 🙂

(1) Makes sense when the worlds billionaires use London as their playground

(2) https://www.gov.uk/certifying-a-document

(3) I’ve passionately hated HSBC since the second I opened my account. The switching costs of banks in the UK is unbelievable… but that’s for another post

(4) Funny how someone working for a bank doesn’t bank there…

(5) What, you don’t see Harry on your way to work? http://buff.ly/1oLCJ2r

(6) http://leonrestaurants.co.uk/menu/breakfast/menu-item/smoked-salmon-avocado-pot

(7) http://www.businessinsider.com/zappos-customer-service-crm-2012-1

(8) I know, unlikely – but sure wouldn’t have been that difficult and would have gained a lifelong proponent

(9) Maybe there’s a business opportunity here? A 1-click ‘little bit extra’ that sends a random by considerate out-of-the blue followups like a box of chocolate, balloons, a gift card, etc to anyone in your contact list?