At November’s Startup Lean Coffee, we delved into IRL (In Real Life) vs. online and fundraising, among other topics. We had some incredible advice, including several invaluable resources for founders. Here are some of the highlights and afterthoughts.
In 2014, Google completed a massive study of their teams called Project Aristotle to try to determine what made some teams more effective than others. They found that the #1 factor in team effectiveness as psychological safety. Here are some great guidelines for increasing psychological safety in teams.
The bottom line is that interacting In Real Life is the most effective way to build meaningful relationships on which psychological safety is based. IRL is higher fidelity, so team members can more easily understand their team mates’ unspoken intentions and identify/resolve misunderstandings before they do too much damage.
Online interactions make it very easy to construct digital facades that impede understanding, block empathy, and erode psychological safety.
Online interactions are starting to dominate many team interactions, even when teams are mostly collocated. Simon Sinek provides a wonderful description of how people interact online even when they’re sitting next to each other in his Millennials in the Workplace Talk. In fairness to Millennials, we’re almost all guilty of these behaviors.
This is also the first time we’ve had so many generations working together, making understanding even more elusive. In The Remix: How to Lead and Succeed in the Multigenerational Workplace, Lindsey Pollack provides guidelines for addressing challenges.
I advise my clients who have remote team members to always remember to make meeting in-person an intentional, scheduled ritual (just like Startup Lean Coffee)!
Because we focus on startups as a theme, it’s natural that we spend a lot of time on fundraising. Most founders immediately think of venture capital financing when they hear the word “fundraising.” It’s important to keep in mind that venture capital is only one way to finance a startup. Don’t forget about grants, impact investors, strategic corporate investors, and individual investors. Each may have very different motivations for investing in your company; finding investors whose motivations best align with your is critical.
Also, remember that all startups are bootstrapped in the beginning; some need to raise capital to achieve their full potential. If you can find a way to generate revenue before raising capital, you will probably learn a lot about your target market and make it easier to raise money. And some amazing companies will be able to just grow organically, without raising capital!
If you think your business might benefit from venture capital financing, don’t start without first reading Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, by by Brad Feld and Jason Mendelson. Other recommendations include Mastering the VC Game, by Jeffrey Bussgang, and Startup School, the free online course for founders by YC.
When to start fundraising is also a common question. A common chicken-and-egg scenario in which founders find themselves is to need to raise capital to build a product, only to hear from prospective investors that they would like to see the product built before investing.
One explanation for this kind of response is that the prospective investors in question just don’t invest in companies at this stage. This doesn’t necessarily mean that no one would invest in this company, just that this might have been the wrong kind of investor for this situation. In this case, consider approaching different kinds of investors: pre-seed stage funds, accelerator programs, or perhaps angel investors might be a better fit.
You can research on Crunchbase to come up with a list of qualified prospective VCs to target. Some qualifying questions to explore include:
For any qualified prospects, determine how you might get a warm introduction to a partner. Do you know or could you get an introduction to the CEO of one of their portfolio companies? Would she be willing to send a warm introduction to the partner at the VC firm with whom she is closest?
A more bootstrapped approach to the chicken-and-egg problem that is available to some businesses is to build a Minimum Viable Product on a no-code application platform like Bubble. Doing so would allow you to test your product with real customers, perhaps generating some revenue, and in doing so, significantly de-risk your business for prospective investors, all without hiring software engineers and building a full product. Note that you’ll eventually have to hire engineers and build a full product if your business takes off; but by this time, you’ll have the capital to do so.
Startup Lean Coffee is a monthly gathering of founders, early employees, advisors, investors, and anyone involved or interested in joining the startup world in any capacity. Our sole purpose is to help each other improve by sharing questions and experiences. All you need to bring is your attention, curiosity, and willingness to share.
We follow a Lean Coffee meeting format, a lightly facilitated meeting where participants democratically build an agenda and discuss each topic for a fixed time, voting to continue discussion or move on to the next topic after the time runs out.
Feel free to continue conversations that were started at our meetings and start new ones on our Startup Lean Coffee Slack workspace. Please treat our Slack space like our in-person meetings: ask questions, share interesting information, create channels.
Startup Lean Coffee is graciously hosted by Betaworks Studios. Participation is free; but space is limited. We usually meet on the 4th Friday of each month. Sign up for the next Startup Lean Coffee, which will be on Friday, January 3rd at 9am.