The Struggle is where greatness comes from – Post Accelerator, Rejection and Venture Capital

October 22, 2012

Now I could let these dream killers kill my self-esteem
Or use my arrogance as the steam to power my dreams
I use it as my gas, so they say that I’m gassed
But without it I’d be last, so I ought to laugh
-Kanye West, Last Call

Have a front row seat for #startupschool ready for Zuck.

Post Accelerator Motivation
Its Monday, October 22nd, 2012 and I am feeling motivated and encouraged. I’m pursuing my entrepreneurship goals fresh out of YCombinator Startup School this past weekend. I had this same feeling earlier this year after attending my first TED conference in Long Beach. Now starting to hit my stride in San Francisco after spending a few months heads down focusing on what I am going to do next after leaving the startup accelerator, NewME Accelerator, that I co-founded. Yes, if you did not know, I left in May a little over a year it launched. We went through two cycles of startup founders who dropped everything to move to Silicon Valley to turn their startup dreams into a reality. They worked to developed their product, gained valuable insight from first class mentors who live and breath the valley and then demoed their products to VC firms and press. It was a great experience and hard to believe that I launched a startup accelerator. One of my friends mentioned the other day that I may be one of 50 or so people who can say they have launched an accelerator in Silicon Valley. More on why I left in a future blog post — there is more to what people saw on the CNN documentary that followed us last year.

Before launching the accelerator in 2011 until now, I’ve learned a lot about the culture of Silicon Valley. Now that I live in San Francisco, I have an entirely different perspective on what investors look for, the tech community and better ways to help entrepreneurs outside Silicon Valley.

Helping Entrepreneurs
When I first left NewME, I was on the verge of launching an online “readiness” program; a pre-accelerator for tech entrepreneurs. Notice I did not say it was for “minority” entrepreneurs but for all entrepreneurs regardless of race and gender. I had talked with leading Silicon Valley venture capital firms and national programs such as America21 and Startup America. We all agreed that as more first time entrepreneurs are considering applying for accelerators and seeking venture capital, there is a need for an online mentorship and feedback platform. I was putting together a small team in San Francisco and was going to start the program under the Simplistic Labs brand. But despite already advising and co-founding two previous startups, I wanted to launch a successful company / product in Silicon Valley. That lead to creating PitchTo.

Problem Solving With A Purpose
PitchTo solves multiple problems not only for the entrepreneurship community but for investors as well. PitchTo is a mobile development lab which builds tools for investors to make smarter decisions and help entrepreneurs deliver exceptional pitches. The vision of PitchTo came to me from four problems that I experienced first hand.

1. Entrepreneurs/Founders need a better way to collect and manage feedback on their product and pitch before meeting with investors.

2. Associates, analysts and angel investors spend countless hours on the phone, in-person meetings, attending demo days, hackathons and pitch events listening to pitches without a streamlined process to collect, rate and manage pitches real-time on mobile devices.

3. The feedback loop among entrepreneurs and investors could be vastly improved.

4. Various pitch events, conferences are using outdated methods and loosing data that could be valuable for both the entrepreneur, journalist, judges or investors.

After brainstorming on the problem, I knew I would need a team to start building a product. I sent a few emails and tweets to developers I knew and reached out to some talented people I’d met via AngelList. Then I organized a one day hackathon to start working on the first PitchTo MVP (Minimum Viable Product).

Team Building Lessons Learned
After the PitchTo hackathon, if you would have asked me where we would be at by October, I would have almost guaranteed that our first product would be ready for beta testing. But it’s not. One common question many entrepreneurs ask is how to find a technical co-founder. If you are looking for a technical co-founder or any co-founder, finding one is just half the battle. Here are a few question and suggestion you should consider:

Best platform – Once you know the platform, you can determine the best language.

Have an understanding of what is the best programming language to build your product — Example: ruby, python, javascript… etc.

Before agreeing to become a team, make sure everyone is on board to see the product launch through the good times and not so good times.

Vet technical co-founders via their github profile, contributions to open source projects, stack overflow engagement, previous projects and personal referrals via word-of-mouth.

Regardless of skills needed, make sure you can work well together and the potential co-founder is a culture fit.

After a few months of project managing and going through “startup life” hurdles with the team, I decided to part ways. Luckily while attending the Google Ventures BBQ I was able to recruit another developer and keep PitchTo’s development going. While the initial focus was on a web app, I have the developer focusing on the mobile platform. I continue to build out the app design, web platform and UI/UX along with doing customer development with potential customers several times a week. Basically everything it will take to launch the company’s first product.

During the early stages of PitchTo I knew that keeping things legit was important. This is where having a good law firm comes in. Getting incorporated can be the easy part but having to deal with equity, vesting shares or co-founder changes can be a challenge.

Customer Development with Investors
I have talked with over 50 angel investors, venture capital firms and incubators about the process of evaluating pitches, what they look for in a startup and current processes in place to communicate with founders. It has been a great learning lesson and I can tell you that if there is an industry ready for disruption, it’s in the venture capital and investment space.

From the beginning of PitchTo, I knew I would need to do tons of customer development to gain insider knowledge of how investors in Silicon Valley and San Francisco operate. I already relationships with a number of investors across the country before coming out here to launch my accelerator but moving to the Bay Area made it easier to expand that even further by attending local events, conferences and pitch events aimed at the tech startup community. No matter what product you are building, make customer development part of your development process.

Finding Mentors and Advisors
I cannot say enough good things about my official and unofficial mentors during this experience. Being able to meet with amazing people such as Bill Campbell, Mitch Kapor, Stephen Adams and others has been priceless and a great resource of information, encouragement and honest advice. As an entrepreneur, you need a few types of people around you:

  • The encouragement type
  • The keep it real type
  • The kick in the butt type
  • The increase your network type
  • The open doors for you type.
  • That is what mentors are for.

    Finding mentors can be as difficult as finding a co-founder. My advice is after you set your goal to launch a company, start reaching out to potential mentors for coffee. Once the coffee meeting happens, ask for feedback and if it sounds constructive, ask it’s ok to keep them informed on your progress. Do not just ask, “hey can you be my mentor” on or after the first meeting — that’s lame and will send the person running the other way because everyone is busy. It’s about building a relationship first.

    Seeking Entrepreneur in Residence Opportunities With Venture Capital Firms
    During the customer development process, I realized that one way to improve the launch traction of PitchTo would be to partner with a venture capital firm so I decided to reach out to a San Francisco based VC firm that I had a relationship with. I talked with one of the partners about joining the team as an EIR (Entrepreneur in Residence). I met with the partner and made my “pitch” to join the firm. He then asked his partners to meet with me. I was excited! After a phone meeting, about 15 emails and a face-to-face meeting, they decided to not to offer me a position. That process lasted about a month.

    Not being the one to give up I reached out to another VC firm on Sand Hill Road. Now these were two firms I felt strongly about because of their history in the valley, their portfolio companies and because of my connection with the partners. This time would be different; I had a good referral and just knew it was going to work out. I scheduled the meeting and made my ask with the partner; I had already met with other partners and team members to learn as much as I could about the firm and this partner. I practiced my talking points on how I would value, my insights to date on specific startups and so on. The partner meeting was short and I was passed on to another partner. Looking good! It took about a month of waiting for the next phone meeting which I hoped the call would be about negotiating the terms of my employment for the position but instead it was a “we do not have the budget call”. Talk about a disappointment! I’ve heard that venture capitalists don’t want to tell entrepreneurs their product or idea is bad because you don’t want to discourage them. Hearing this about the budget being a factor felt the same way. As I walked back to my Zipcar in the parking lot, I looked for a little pebble to kick but found none. What now?

    I kept turning over what had happened and tried to see it from another perspective. What went wrong here? During my customer development interviews with investors, I constantly heard they were looking for new deal flow from within the Silicon Valley community and outside the Bay Area too. Since the CNN documentary aired, I am constantly receiving pitches from entrepreneurs looking for capital or advisors. This exposure has led to some pretty amazing opportunities as well like the African mobile app initiative to connect the growing Africa entrepreneurship community with mentors and advisors internationally.

    I’ve been in the startup scene since 2002 with a well connected social network, having co-founded two companies and an accelerator, plus with my seriously strong UI/UX design skills, I would be great asset to any startup or venture firm.

    As I continue to get PitchTo ready for launch, I am going to continue my customer development with VC firms and incubators to partner with for this product. Whether or not I am brought in as an EIR or analyst at a venture capital firm in the Bay Area is still an unknown variable but certainly not null.

    2012 Experiences and Opportunities
    #ted was amazing
    As this year comes to a close, I look back and see it’s been a year of personal and professional growth beyond anything I could have imagined coming from Raleigh, North Carolina.

    Here’s a mini review of my 2012.

    January – Keynote: National Black Student Leadership Conference for the Williams Leadership Education Foundation
    February – Moved to San Francisco, CA and Attended TED (not TEDx)
    March – Spoke at SXSW, received award for Top Ten Blacks In Technology, NCAA Final Four
    May – Spoke at Black Enterprise Entrepreneurs Conference & Expo, Left the NewME Accelerator and founded PitchTo, held the PitchTo Hackathon
    June – Spoke at Startup Day on the Hill in Washington, DC
    October – Attended Pipeline Fellowship Conference on Angel Investment, attended YC Startup School

    I was able to attend various startup conferences and events such as:
    TechCrunch Disrupt, Twilio Con, Google Ventures BBQ, Box Works, Mashery API Conference, the TechCrunch August Capital Party. Speaking of TechCrunch I have published two articles on TechCrunch as well.

    Upcoming
    October – Astia Panel during Global Entrepreneur week
    December – Mentor, Lean Startup Conference

    Value And Opportunities… Let’s Talk
    Launching a business is not an easy task. Just ask any successful founder. It is a struggle and the lessons from those struggles are what can make you a great founder. I am constantly learning and yet I know what value I bring to the table regardless of not graduating from, or for the cool kids, dropping out of an Ivy league school. I don’t have any additional letters after my name like PhD or a certificate on my wall. I’m from a small town with a population of less than 300 in North Carolina but have grown my network through hard work, honesty and a willingness to help others. What I have learned is that to be successful in San Francisco, It’s a question of of not “if” I can raise venture capital or work for certain firm but “when”.

    Finally met & talked with @RonConway at #startupschool @startupschool

    “Don’t Lose Faith”

    Sometimes life hits you in the head with a brick. Don’t lose faith. I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle

    . — via Steve Jobs, Stanford Commencement Address

    Open For Business
    Even though I’m working on PitchTo and with the recent outcomes of not landing an EIR position I have time for some consulting projects. My experiences ranges from but not limited to UI/UX design, HTML, CSS, project management, social media marketing and business development. You can view my LinkedIn profile here: http://www.linkedin.com/in/waynesutton and be reached at wayne@socialwayne.com.

    Wayne Sutton

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    Wayne Sutton is a serial entrepreneur and general partner at BUILDUP.vc. Wayne has over 14 years experience in technology, design and business development. Wayne was recently recognized as one of the Silicon Valley 100 coolest people in tech, one of the 52 hottest new stars in Silicon Valley, one of the 46 Most Important African-Americans In Technology by Business Insider and one of the Top 100 most influential black people on social media in 2014.