The Investment Banker and the Fisherman

Steven HollandStrategy

An investment banker was once taking a vacation in a small fishing village in Mexico, where he ran into a fisherman who had just docked a small boat with several, large fish in it.

The banker asked the fisherman how long it took to catch the fish, and the fisherman replied “only a little while”.

The banker asked what the fisherman did with the rest of his time, and he replied “I sleep late, fish a little, play with my children, take a siesta with my wife, and stroll into the village every evening where I drink wine and play guitar.

The banker then told the fisherman that he was a smart businessman who could help him. He proceeded to explain a plan where the fisherman could spend more time fishing, use the proceeds to buy a bigger boat, and eventually have an entire fleet of fishing boats. Instead of selling to the middleman, he could open his own cannery and have full control of processing, production, and distribution.

The banker said “Of course, you would have to leave this small village to run such a growing enterprise.”

The fisherman then inquired how long such an endeavor would take.

The banker replied “I’d say 15-20 years.”

“Then what?” the fisherman asked.

“That’s the best part!” said the banker. “At the right time you could IPO, sell your company stock to the public and become very rich. You could make millions!”

“Then what?” replied the fisherman.

To which the banker replied “Then you could retire. You could move to a small coastal fishing village where you could sleep late, fish a little, play with your children, take siestas with your wife, and stroll into town every evening where you could drink wine and play guitar.”

Sometimes in our lives we get caught up in our own goals and ambitions

We have constant focus on the end result.

When in reality, the journey to get there is the reward and endgame we were looking for all along.

What do you think?

#FishermanAndTheBanker #Entrepreneurship #StartupTips

The 7 Amazing Questions Every Business Must Answer

Steven HollandProduct, Sales, Strategy

Our team at Fokcus Mentoring has been up to some big things lately, and we wanted to share some of those with you, the loyal members of our Fokcus community.

We’ve started an effort to create virtual mentorship for startups and entrepreneurs out there beyond our weekly Tech School webinars. Most recently, we’ve recorded sessions with our own co-founders sharing advice, stories, and concepts to help others learn and grow within the startup community.

An exciting example of this has been the series we recently published to YouTube which consists of two of our co-founders, Kurling Robinson and Steven Holland, diving into some key concepts from the book Zero To One by Peter Thiel. Peter is the co-founder of notable startups such as PayPal and Palantir. There is great insight in his book that can prove valuable to many entrepreneurs out there.

One of the exciting ideas Peter mentions in his book is the “7 Questions Every Business Must Answer”. These questions are such that, if conscientiously answered by a startup, can pave the way to sustained success over the long term. We’ve made separate bite-sized videos for each of the questions, which are as follows:

  • The Distribution Question: Do you have a way to not just create, but also effectively deliver your product?
    Check out the video here: https://youtu.be/_ZAPu-qL-5Y
  • The Durability Question: Will your market position be defensible 10 or 20 years into the future?
    Check out the video here: https://youtu.be/Wt522z0STBI
  • The Secret Question: Have you identified a unique opportunity that others don’t see?
    Check out the video here: https://youtu.be/jmSAQrlVveI

Also I wrote a short article on Brand which compliments some of these concepts.

Thank you for continuing to be a part of the Fokcus community as we learn and grow together. Wishing you a happy and healthy 2021!

Cheers,

Steven Holland
Fōkcus Co-Founder and Lead Software Engineer

Perfect is the enemy of good

Johanna RobinsonLegal, Marketing

“Perfect is the enemy of good”

Voltaire

I’ve heard my brother (a Google engineer) say this so often that I thought it was a Google adage. Turns out, the French writer and public activist Voltaire quoted an Italian proverb in one of his poems. Reflecting on my most recent Tech School talk, I was thinking about this idea in the context of selecting your company name.

You do want to take some time to make sure no one has your company name already, because that can be confusing and could possibly be a legal infringement of some sort. A great resource for doing such a search is opencorporates.com.

You do not want to take an inordinate amount of time on name selection because 1) you have a lot of important things to do to get your startup going, and 2) you don’t know how your idea or product is going to evolve.

When I started my small manufacturing company, I chose a name that incorporated my own name. And when I designed my branding, I didn’t really think about a logo that would work as an icon or be stamped onto my products. As my company evolved and grew, we outgrew the name and we needed a practical logo. So, two years in, I renamed my company and rebranded.

You may find yourself rethinking your company name down the road a bit on your journey, and that’s ok. It’s a startup, and it doesn’t have to be perfect right from the beginning.

Three Powerful Resources to Help with Your Billboard Slide

Johanna RobinsonLeadership, Legal, Marketing

Fōkcus used to host a weekly program called “City Highlights” at Apple stores in San Diego and Los Angeles to help startups on a variety of topics including pitch decks.

Each week, a different founder would pitch to a group of 8 to 10 mentors, and then get feedback from the mentors. A significant portion of the feedback would be focused on the first slide – what our CEO, Kurling, likes to call “the billboard slide.”

Imagine you’re driving down the freeway and you pass a billboard sign. How much time is there to absorb the key message? Not much. The message has to be simple, clear, and compelling.

In examining the billboard slide, we would cover a broad range of topics from company name to logo design to branding.

Here are 3 resources that can help with your billboard slide:

  1. Check for availability of your company name on opencorporates.com
  2. Automate your logo design on looka.com (or just play with the tool to help jumpstart your thinking process)
  3. Domain registration services, like GoDaddy, BlueHost, and Google allow you to easily search of a website name is available

You can listen to my recent Tech School talk on legal basics to learn about other great resources for startups.

Beware of services in exchange for equity

Johanna RobinsonFinance, Legal

It seems like a great idea, and we have heard many many stories of people who have tested this model. But it usually does not end well.

First, let’s clarify. It’s a great idea to have a technical co-founder and equity should be allocated equitably.

But it’s not a great idea to give equity to people who are providing one-time services. For either party.

Why? Equity does not have the same value as cash.

From the service provider perspective, whether the equity will have future value some day is a risk that’s very different than an unpaid invoice.

From the founder’s perspective, your equity may have future value that far exceeds the value of one time services. Sharing equity (a portion of all the work the team does for the life of the company) is usually forever.

If you missed the most recent episode of Tech School, tune in to hear me tell a story about a real founder that tried this and how it turned out. I also recommend this book to help you think through equity decisions.

Four reasons to formalize your consulting arrangement

Johanna RobinsonLegal

On our most recent episode of Tech School, I talked about basic legal concepts for startup founders. One of the things we covered was consulting agreements.

Here are four things you’ll want to make sure you give special attention to, and a few reasons why. (Obligatory disclaimer – I’m not a lawyer, and this is not legal advice.)

1. Scope of work

It’s super important to make sure you and the other party are on the same page regarding the scope of work. In my talk, I gave the example of a website project, which is one project type I’ve seen with the potential for a lot of misunderstandings.

If one party of non-technical, it’s especially important to make sure your shared understanding of the scope of work is clear. In the website project example, there are lots of things to consider, such as who is providing graphic assets, who is selected and paying for any templates or plug-ins, who is paying for hosting or any other services needed, is the site static or dynamic, how many pages will be built, who will approve designs and changes, who will be responsible for maintenance… you get the idea. There are a lot of opportunities for misunderstanding and frustration.

2. Business Relationship

Regardless of whether you are the consultant, or the client, you will need to make sure the business relationship is clear.

If you are the client, you’ll want to make sure there isn’t an implication that the consultant is an employee and therefore entitles to employee benefits.

If you are the consultant, you’ll want to make sure the client doesn’t think you are an employee, and potentially subject to the client’s preferences for work site, work hours. You also might want to mention if you are working 100% on the project through to completion or if it’s just a portion of your time (or your team’s time) that will be allocated to the project.

3. Payment Terms

Early stage startups are not usually flush with cash. Projects usually cost something.

If you’re the consultant, you’ll want to make sure your client is going to work with you to support payment for project activities so that the work won’t be a hardship for your fledgling company.

If you’re the client, be aware that in addition to the cost of the work, there may be additional expenses. Travel, pass-through costs for tools and/or materials, interest on late payments. You’ll also want to make sure the payment schedule is reasonable. What’s reasonable is up to the parties to the agreement. However, you don’t want to leave yourself vulnerable to a situation where you’ve made all the payments but still don’t have the work product.

4. Protecting Intellectual Property

Hopefully, the result of the consulting agreement is a work product of some sort. Make sure you’ve sorted out ahead of time who owns that work product and who is allowed to use it.

It’s much easier to talk about this before the work product is created than it is to talk about it after there has been a misunderstanding and related conflict over the work product.

If you want to learn more about the other legal basics topics we covered (contract, confidentiality, and trademarks), you can watch my talk on our YouTube channel.

What’s the deal with confidentiality agreements?

Johanna RobinsonFinance, Legal, Product

On our most recent episode of Tech School, I spoke about legal basics for startup founders, and we touched briefly on confidentiality agreements.

On the list of most-common-questions-we-get-asked are questions about confidentiality. Here’s our take on two aspects.

1. Should you worry about someone stealing your idea?

No, you should not. 99.9999999% of people have better things to do than steal your idea and build a company around it.

Talking about your idea is great. It’s a way to get feedback and a way to get people excited about it. On Ido Tuchman’s recent Tech School talk (on Intellectual Property), he mentioned Michael Ryan Norton’s excellent advice to share your progress with your potential customers as you are building your product so that you have a built-in customer base when you launch.

Even better than talking about your product to your potential customers is ask lots of questions about what they need without even mentioning your product. Focus on building the relationship and sponging up everything they’re willing to share about their pain points and what they would give to have those pains go away.

If you missed the GoSurf team’s talk on customer discovery, you should go watch it. (After you finish reading this post, of course.) The team talks about their passion for getting feedback from their customers and how they incorporate the feedback into their product.

2. Is that investor a jerk because he wouldn’t sign my non-disclosure agreement (a.k.a., confidentiality agreement)?

Nope. Not a jerk. Just an experienced and thoughtful investor. Here’s a link to a great article on the Cooley Go site that will give you some insight.

If you missed my talk, you can see watch the recording on our YouTube channel. I touched on contracts, confidentiality, consulting, and trademarks. I also shared some resources in addition to the Cooley Go website.

Free legal templates for startups

Johanna RobinsonLegal

Did you know that many top tier law firms have groups that focus on the legal aspects specific to startups? They put a lot of effort into creating resources to engage the startup community.

You’ll often see law firms presenting at and/or sponsoring local startup events, like our very own Startup San Diego.

Here are three resources we love:

  1. Cooley Go – Cooley & Cooley’s site with articles, trends, a searchable glossary, and a library of legal documents
  2. Founder’s Workbench – Goodwin Law’s site with free legal documents, a capital calculator, a deal dictionary, and a searchable database of vetted resources, portals, and blogs
  3. Access Silicon Valley – Roger Rappoport’s passion project to help founders

On our most recent episode of Tech School I spoke about some basic legal concepts for startup founders and I talked about some additional resources that will be helpful for you. If you missed it, you can watch it on our YouTube channel

Did you know that oral agreements are enforceable?

Johanna RobinsonLegal

Oral agreements are generally valid and legally binding as long as they are reasonable, equitable, conscionable, and made in good faith.

A couple of years ago, I was lucky enough to be able to participate in Noam Wasserman’s Founders Bootcamp. The story he told about the oral agreement between the founders of Zipcar made a huge impression on me.

On this week’s Tech School episode I shared some of that story as an example of an oral agreement. Watch the episode to hear the story in my talk about legal basics for startup founders.

If you’re curious to know more about the Zipcar story, you can read Noam’s Harvard Business Review article (co-authored with Thomas Hellmann).

How I learned to read contracts

Johanna RobinsonLegal, Project Management

When I was a baby project manager, I was fortunate to work for a hypergrowth biotech startup. In the time that I was there, we grew to over 3,000 employees.

In a hypergrowth startup, the usual startup problems to be solved are compounded by urgency and scale. But there are some benefits too. Suddenly there are funds available for many of the things that just weren’t possible in the early stages.

One of the things we added was a legal department, and there was a whole paralegal assigned just to help manage legal stuff for my team. Her name was Maureen, and she was an expert in contracts.

It seemed like there was always a backlog of contracts to be reviewed, and that was usually one of the bottlenecks in moving along a project. So I asked Maureen if she could teach me some basics that would help her review the contracts more quickly. That was the beginning of a fantastic mentoring relationship. I would review the contract and propose redline edits, Maureen would review my work, and then she would teach me what I missed or got wrong.

I loved it. Eventually, our fancy legal department even built some legal training into our new employee orientation training.

On our Tech School program this week, I shared some of the legal concepts I learned from Maureen. I hope these basic concepts and the real life examples from my career will equip you to navigate legal aspects of your own startup journey.