Tips from VC Heidi Roizen: Three Things to Never Do When Starting a Company

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Today Heidi Roizen spoke to 35 female company founders including myself about learning from failure at Procopio law firm in Menlo Park, Calif. The event was held by Women Startup Lab Meetup group.

Roizen is a venture capitalist with Draper Fisher Jurvetson (DFJ) who also teaches entrepreneurship at Stanford University. 

In the early 80s she founded personal computer software company T/Maker and later sold it at a nice profit to the delight of her investors including VC Ann Winblad of Hummer Winblad Venture Partners. 

This was an interesting time to be in software because it was before it was hot.  At the time Lotus Development was getting started and Bill Gates, a friend of Roizen’s, was also a frequent co-conspirator at fledgling PC industry events.

I actually did PR for Lotus for several years long after it was bought by IBM. While I was there it had been rebranded enterprise collaboration software and social business which was definitely a smart move by Big Blue. 

After selling T/Maker, Roizen became vice president of developer relations at Apple Computer and after that, a partner at another VC firm before she joined DFJ. It was interesting to hear that she works part time for DFJ now, often from her home office. 

During her talk on learning from failure, Roizen emphasized the importance of knowing the numbers behind your business as well as being realistic.  

She had many great tips but highlighted three main things to avoid when starting a company.

1. RIGIDITY. Instead, be flexible and open to changing your plan based timely analysis of how things are going.  If you are not seeing the results, then quickly change up what you are doing in order to get them. 

2. PERSONAL FINANCIAL RISK. Roizen said she has seen more than one entrepreneur declare personal bankruptcy as a result of borrowing money to exercise stock options (known as the ‘cashless exercise’) and then being required to pay that money back when the company does not live up to its early promise.  She says personal financial pressure can create a hidden agenda and lead entrepreneurs to make bad decisions.

3. ASSUME A DEAL WITH A BIG COMPANY IS THE PANACEA. She once invested in a company that partnered with UPS. The company placed way too much emphasis on the deal as a key to success. Things didn’t pan out exactly as expected.  In 20/20 hindsight, they realized that although it’s a hugely successful shipping company, UPS’s business reasons for doing the deal were not aligned with what would make the startup successful.  

When I asked Roizen about hot technologies she immediately mentioned how mobile is ubiquitous and the importance for designing software for mobility. She also mentioned fellow DFJ VC Steve Jurvetson’s interest in the space industry pointing out the SpaceX launch that happened a few days ago.

The energy in the room during Roizen’s talk was high and I would like to thank Women Start-up Lab co-founder Ari Horie, my former coworker in IBM Storage in the late 90s, for working so hard with her team to put on such a fantastic venue. 

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Final note

Here are the Twitter handles of organizations mentioned in the story: @DFJvc, @HeidiRoizen, @WS_Lab, @Humwin, and @FromMichelle.

 

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3 Business Tips from Tim Draper, the VC who Backed Skype and Hotmail

Here are some business success tips from dynamic Venture Capitalist Tim Draper and founder and managing partner at Draper Fisher and Jurvetson (DFJ).

He spoke at my Women Startup Lab (http://www.meetup.com/WomenStartupLab/) Meetup last night at his incubator headquarters, Draper University in San Mateo.

According to a recent San Francisco Business Times story, per a 2010 study which was the most recent available at the time, only 1% of companies funded by VCs are women-owned so kudos to you if you go out of your way to encourage them. This includes Draper’s firm, Women Startup Lab Founder Ari Horie and Sponsor Procopio law firm.

I’m also doing my part to help female entrepreneurs. One of my favorite clients is Romanian-born Londoner Ozana Giusca, who recently launched Tooliers.com, which some call the “Accenture for small businesses.” I look forward to seeing this new self-service business consulting tool be wildly successful someday.

Here’s a recent clip of Ozana on SiliconAngle TV discussing European VC trends and self-consulting:

 http://www.youtube.com/watch?v=brSGZLNVYZs.

You may have also read about Ozana in the San Jose Mercury News feature story about SiliconHouse:

http://www.mercurynews.com/mike-cassidy/ci_23506448/cassidy-siliconhouse-hosts-worlds-entrepreneurs-business-building-crash

Now back to Draper’s talk . . .

If my mom in Cleveland is reading this, she is probably saying, who the heck is Tim Draper?

Well, mom, Tim Draper is a household name in the Silicon Valley having backed Skype, Hotmail e-mail, Baidu, Good, and numerous others. I first met him when we worked together supplying reporters with information about the VC industry overseas while I was with the venture division at a large corporation.

This article mostly focuses on his advice for women who want to start businesses. These three tips stuck with me:

TAKE OVER THE WORLD I believe this one has to do with attitude. Be a game changer. Think outside of the box. Disrupt the way of doing things. Aim high!

BE UNPOPULAR (if needed) One idea in Sheryl Sandberg’s book Lean-In which encourages women to be leaders is that women who are aggressive at work are sometimes unpopular while men who show the same “level of energy” are applauded.

GO BIG If you start a company, do it with passion and gusto. Be excited. Give it your all.

Draper has backed many successful female entrepreneurs including Robin Wolaner who started Parenting magazine and sold it to Time, Heidi Roizen of T/Maker who is now a DFJ partner, Beth Cross of Ariat, and several others.

Draper says VCs generally don’t care if you are a man or woman. He looks for entrepreneurs who are “extraordinary, driven and excited” who disrupt the normal way of doing things Tesla disrupted the automotive industry.ImageImageImage

The audience last night included both his Draper University incubator students and our Women Startup Lab Meetup group which encourages women to pursue their business dreams.

Ari Horie has done a fabulous job marketing Women Startup Lab which has grown to 430 women in a few short months.

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Photo captions:

1. Tim Draper and Women Startup Lab Founder Ari Horie. Draper says that’s his “Wonder Woman” cape. Draper University sports a super hero theme.

2. Bean bags at Draper U.

3. Draper presents the industries ripe for disruption.

Michelle McIntyre is the president of Michelle McIntyre Communations LLC headquartered in the Silicon Valley. Her clients include early stage start ups and small businesses in California and Europe.

For Women Only! 5 Tips for Launching a Start-up from the Founder of Mightybell and Ning

Three businesspeople working on a touchpad.

I went to a unique women-only meet-up, or gathering of like-goaled individuals to swap ideas and network in what I call “VC country” – Menlo Park, California — the other day.

Venture capitalists like it because it’s close to both Stanford University and all of those hungry b-school grads who usually have the same three goals:

1. Change the world.

2. IPO or get acquired.

3. Make a boat load of cash.

Because VCs like the area, it’s a popular place to start a business, especially one focusing on technology due to it being on the north end of the Silicon Valley. The ecosystem here supports starting companies.

The fairly new meet-up group called Women Startup Lab (http://www.meetup.com/WomenStartupLab/) was founded by Ari Horie. Ari and I used to work at IBM together. Now we’ve both jumped into the entrepreneur pool. A whopping 300 people joined Ari’s group on-line in just 12 weeks. This shows there is a need for more groups that support women entrepreneurs.

Getting together with other women takes some of the gender-related issues away from the meeting. You don’t have to wonder, did he like or not like my idea because I’m a woman?

And because 80%+ new businesses fail, it’s wise to get as much advice as possible from successful entrepreneurs so you can increase your chances of being in the 20 percent.

This particular meet-up was pretty informal yet there was a motivational speaker. It was Gina Bianchini, founder of Ning (http://www.ning.com/) which sold for $150 million.  But like any good Stanford Graduate School of Business alumnus, she’s already focused on starting her next company, Mightybell https://mightybell.com/. You can follow it on Twitter, at yes, you guessed it! @Mightybell

Bianchini had a frank discussion with about 35 women including me the other day about what it’s like for a woman to start a company. Some of her points indicated there are some challenges being a woman but they can be overcome.  I left some of the more “honest” advice out of this blog post out of courtesy to Gina.

 I actually thought that her general business advice was excellent and could apply to any start-up but she meant it for “women-only” due to the venue.

Here are the tips:

1. Five great contacts can help you get going. You don’t need to network or friend hundreds of people to accomplish your goal. Be careful how much time you spend networking at conferences. My friend and fellow Saratogan, Bob Karr, CEO of LinkSV (www.LinkSV.com) says it’s 10 people.

2. Keep a razor sharp focus on your goal and stick to the most important tasks only.

3. Market, market, market. If you are not spending 90 % of your time doing marketing and sales, something is wrong.

4. Take up space. When you are sitting at a table or presenting, spread out your arms and walk around the room.  Women tend to cower and shrink at a table.

5. Don’t apologize so much. This tip is geared towards women and actually came from an entrepreneur from Australia during discussion time and Gina agreed with it.

It was nice to have a unique venue where women’s issues were discussed and to hear tips from a female who has already succeeded in a still predominantly male-run technology business world.

On a final note, kudos to the more forward-thinking companies like HP, IBM, and Yahoo. All three have women running the show.

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Here’s a reminder about who I am in case you don’t want to click through to another page on this website to find out:

I’m the President of Michelle McIntyre Communications LLC http://www.michellemcintyrecommunications.com, a high tech public relations consulting firm based in Saratoga, California, a director with the Silicon Valley International Association of Business Communicators, an executive board member with the Sixth District Santa Clara County PTA, and a Boy Scout merit badge counselor for communications, public speaking and journalism. I’m also on the Advisory Board of a hot start-up called Fondu Software Inc. which helps companies form more profitable relationships with their channel partners. I have won 10 awards for outstanding results during my two decade career at IBM and three other public relations firms including Global Fluency where I was employee of the year in 1992. You could follow my tweets at @FromMichelle.