24 March 2012
I JUST GOT CANDY FROM JAPAN!
Posted from: ON M5T 2Z3, Canada

This is soooo cool! My new favorite startup is Candy Japan run by my new best friend Bemmu.

Bemmu read my post on my startup depression, and like so many others sent me some very, very kind words (thank you all sooo, soo much). But Bemmu took it to the next level and also sent me two packages of Japaese candy too! AND IT WAS DELICIOUS!

For what its worth, I’m been feeling much better. But I cant thank my new friends enough, Bemmu included, for their kind words and gestures. As always Im here to help too if I can!

1 March 2012

Sad, Tired, and Alone: My Ongoing Battle With Startup Depression

image by Frederico Spengler

I am currently in the midst of the deepest, darkest, and longest depression I have had in the last 2 years of my life. Possibly ever.

Some Background

82 weeks ago I started my third startup. Since starting Upverter I’ve felt this depression about a half a dozen times, I guess once a quarter. Its normally just a really, really bad day. Sometimes longer. But the point is, this isn’t the first time I’ve felt like this. And even in my life before Upverter, I’ve been through a couple of pretty depressed periods. Notably during engineering school, and again when I was working full-time at Sandvine.

It goes without saying that it’s pretty terrible, that I’m no expert in depression by any-stretch, and that I have an incredible amount of compassionate respect for those among us that live with depression day-in, day-out.

Pause The World

For me, the sadness normally means I hide. I sleep. I stare at my screen knowing what I need to do, but not doing it. I eat too much or not at all. And I drink. Im at a coffee shop right now writing this - and its the first time I’ve left my room in three days. During school and Sandvine I got fat - like 265lbs fat. It was pretty bad. I was able to lose the weight (80lbs), but it wasn’t easy - it was a lot of support, a lot of friends and family, and a lot of quiet-time introspection.

Drugs

I was on mood stabilizers once. I can’t remember about a year of my life. It was terrible. I slept all the time. I felt like the volume on everything was turned down. The doctor who prescribed them to me later lost his medical licence for over prescribing. And I don’t really know what that means - should have been on them? I’ll probably never know.

But, for me, in my wickedly biased and completely uninformed opinion, drugs are not the solution to my quarterly startup depression. For me I think its part of the roller-coaster. It’s the lows that justify the highs of that big deal/ sale/ launch/ feature. A cost of doing business. Mellow the lows and you lose the highs too - I just wish that didn’t sound so bi-polar.

It Really Is A Roller-Coaster

The highs are higher, and the lows are lower. If you’re a founder you’ve felt like this before. If you’re about to startup you will feel like this someday. And it’s ok. It’s baked in. You quite simply can’t change the world in a couple of years without doing more than most people do in a lifetime.

Have a cofounder you can talk to. Build a support network of other founders. Send me an email - I’ll buy you a coffee and we can talk it through. You’re gonna feel pretty damn alone, I sure do, but remember you’re not. And there are lots of us willing to help you through it.

Anyways

This isn’t supposed to be such a ramble. It’s supposed to be me, throwing my lot in with everyone else. Go ahead and add me to the list of startup founders who were brave enough to talk about their startup depression [Jason], [Lance], [Noah]. It was part of their lives as founders, it’s part of my cofounder’s lives, it’s obviously part of mine and I have yet to share my story with a founder who has not gone through some period of sadness.

I’m not going to tell you the same stuff everyone else already has. Their lists are perfect. Read what they had to say, do it, and that should keep you above it longer. Less sad always. But it will probably still happen. I still get depressed like I am now. And in an effort to drag myself up this time, I wanted to talk about the trend for me, what I think is wrong right now, and how I’m going to try and fix it.

Why Does It Happen?

For me I think it’s like a checkpoint. I need to step back. Look at the big picture. Confirm my motivation, find my power, look at the business risk, and make sure my personal happiness is factored in somehow.

My Energy, My Motivation

I worry a lot about the vision and our message. Upverter is a pretty big idea, and not everyone gets it yet. My motivation is tied very tightly to my belief that someday everyone will get it. Maybe not do it, but at least get why it matters; why there is a better world on the other side.

For me the sadness leads to brainstorming, which leads to messaging, which every other time has lead to a better, stronger and clearer message than the time before.

My advice is don’t discount the value in the sadness. It will suck. But if it doesn’t make you quit, it will make you be honest with yourself. Honest about the problems. And honest about what you should be really spending your time on. There is power somewhere in that.

My Voice, My Power

Upverter is made up of an incredibly gifted team. We represent the best of the best at most of what we do. We are solving the hardest problem around. We have the most kick-ass technical guys you can find. We have a genius designer. And a crack marketer (recently hired). We have a belief in the tech and a hierarchy that puts our builders at the top.

But that also makes it pretty hard to be me. Im a passion guy: fast, loose, and scrappy. I have a background in building hard tech, with hard deadlines, made by people who don’t get what they’re asking for. And I’ve become the guy asking for the impossible from people I could not respect more, while knowing it’s impossible. I’m selling tech I understand. Marketing while knowing the voids. And spending my nights building the bits I worry won’t get built. Its unsustainable, and I know it.

For me finding my power, means finding my voice. It means finding the way to drive and guide a team I look up to. It means finding my value-add and accepting I can’t do it all. It means doubling down and accepting the consequences.

My advice: talk about it with your team. You all have value (or you shouldn’t be there).

An Experiment In Risk-Reduction

I hold the somewhat common belief that a startup is an experiment. A big part of the experiment is given time (ie. money) can you reduce risk (ie. become viable). We normally reduce risk by gaining users, and/or revenue. A profitable business is pretty low risk. While an idea is pretty high risk. Early stage investments return big or not at all (ie. high risk). While late stage almost always return, and its an expected amount (ie. low risk).

Part of my sadness means answering the risk question. We have spent more time. And we have spent more money. But are we less risky? And if so, are we enough less risky that the experiment still makes sense? Early on this meant product progress, for a while it meant messaging, and more recently it means users and revenue.

My advice is try not to be surprised by it. Its really easy to watch time fly by, and keep building all the while ignoring the very metrics you are measured on - namely your risk. 

What Is Your Happy Time/ Place/ Thing?

Turns out we are all people too. We need time, space, and things that make us happy. These are often the first things to go in a startup, and thats pretty normal. Im not saying you need to spend 6 hours a day chilling out. But you should spend at least one or two. Go for a walk to get coffee. Go to the grocery store to get food. Cook your own food. Watch a movie. Get enough sleep. Or try to take a day a week off.

For me, I bike. I love it. And it’s cold right now, so I can’t - and that sucks. So my mission is to find something else for winter happiness. I’m very sure part of my sadness right now is just how long its been since i got some real honest exercise. Dont underestimate the value of endorphins.

My advice, is the advice one of our investors give me. He said, “Zak, you guys can’t keep going so hard. You need to slow down to 40 hour weeks or you will burn out and die. But, if you slow down now and you don’t figure it out, you’re dead anyways.” He was saying sometime soon, the riskiest part of the business is the amount we work, but only when the risky part is no longer the vision/ users/ revenue. When the sprint becomes a marathon.

It may sound empty, but as quickly as possible try to get to the point where you can spend enough time on you.

Thanks

I’m feeling a little bit better. Its good to say it all out loud. And my offer was real, this isn’t a zero sum game, and I want to help if I can (zak@zakhomuth.com). Many thanks to Rohan Lyall, and Clint Homuth for proof reading.

About Me

Upverter is my 3rd startup. I dropped out of high-school, and then university, both times to run startups. My big vision is that atoms and electrons will someday be as easy to manipulate as bits are today. And I believe sharing, collaboration and accessibility (of both tools and manufacturing) will be the drivers of this vision.

Update

I can’t thank you all enough for your kind words, comments, and emails. It means a lot to me. And the absolute best of luck to all of you who are also out there fighting the startup fight. Much respect. There are more comments in the hackernews thread.

23 February 2012
Toronto: Dear Waterloo, It’s Not A Zero Sum Game

When did the gauntlet get dropped between Canadian “cities” for some made up startup championship belt? Does Toronto really have to lose for Waterloo to win? What about Vancouver or Montreal? Can they succeed too, or must we all fail so all those profs and ex-rim employees can win?

If you don’t know what I’m talking about the rest of this will probably sound a lot like a rant. But, because I’ll feel better if I tell you, I’m talking about the on-going feud between the cities, municipalities, and startup ecosystems in Toronto and Waterloo.

Canada is not the ideal place to run a startup, and believe it or not that includes all of her fair cities.

Don’t get me wrong, Upverter is largely based in Toronto, and we love it here [why, hire]. But were here because the best talent we know is, and wants to be, here. Not because its easier to be a startup here. And as much as the world seems to be fighting over which city is going to be the next startup mecca [sf, nyc, mtl, syd], they all seem to not realize the prize isn’t going to be a new focal point. Its going to be an equalization. What I mean is it will become more ok to be where you need to be for your business to succeed. There isn’t going to be a right answer for everyone anymore. And thats going to be a great thing for all of us.

At the end of our YC class an unprecedented number of startups left the valley. Some back to Europe. Others to NYC & LA. We were the only made-in-canada team, and likewise the only to return here. But thats a hugely relevant stat (albeit a much harder problem for YC to manage). And if you draw the dotted line, you should see that this means whenever or if ever a new mecca happens, there wont be a migration. There will just be a even greater place to be for the type of startups that are succeeding there.

And really, in what world does Waterloo or any of these cities win such that the rest of us fail? It just doesn’t make sense. We are all on Team Canada, we are all on Team Not Silicon Vally, and we are all bought into the idea that this is the best place for us to run our businesses. Because if we weren’t, or if it isn’t, what the hell are you doing here? 

Winning isn’t about beating someone else, and especially not about having the best seats in the upper bowl. Its about enabling entrepreneurs, wherever they are, and wherever they’re from, to be successful because when they are the world becomes a better place, not for one city or one sect, but for everyone. 

So… Can we be friends again? Thanks for those kick-ass engineers. How can we help?

About Me

Upverter is my 3rd startup. I dropped out of high-school, and then university, both times to run startups. I had hired and managed a dozen co-ops before starting Upverter. We are currently 7/7 kick-ass, and 6/7 UWaterloo engineers who would just rather be here at home in Canada, than down in the valley. Oh, and if you get shit done, we’re hiring.

16 February 2012

Why The F@*K Didn’t We Just Make An App?!?!

I dont really know. Maybe because

NOT ALL INNOVATION WILL HAPPEN BECAUSE OF A FUCKING TOUCH SCREEN.

Sorry. Got a little excited on that one. But seriously not every problem can be solved with a mobile app. Yes the market for apps is huge. But there are also an aweful lot of developers, and a pretty riduculos number of apps. Its kinda like the biggest lottery ever created. Get out your napkin…

My numbers and assumptions

  • 1bn devices
  • 3mm apps
  • 100 apps per device
  • 90% of the apps are free
  • 0.1% of apps are winners 
  • 15bn in total mobile revenue next year
  • 15 apps are actually used weekly
  • 100K mobile developers
  • 5 yrs of development between smartphones and 1bn devices
  • 6.3bn in VC money for app development
  • Ignoring language
  • Ignore appstore 30% cut
  • mostly estimates - some sources: [1], [2], [3], [4]

Some maths

  • 1bn devices x 100 apps / 90% x $0.99 = $9.9bn total spent on installs
  • $15bn total revenue / 1bn devices = $15 per device (ie user)
  • $15bn total revenue - $9.9bn spent on installs = $5.1bn remaining for in app purchases
  • $15 per user / 15 used apps = $1 spent per used app per user
  • $5.1bn spent in app / 1bn devices x 15 used apps = $0.34 spent per used app per user in app
  • $9.9bn total install revenue / 3mm apps = $3,300 per app on install
  • $9.9bn total install revenue / 3mm apps x 0.1% winners = $3,300,000 per winner app on install
  • $5.1bn total in app revenue / 3mm apps = $1,700 per app in app
  • $5.1bn total in app revenue / 3mm apps x 0.1% winners = $1,700,000 per winner app in app
  • 3mm app / 100,000 developers = 30 apps per developer
  • 30 apps per developer / 5 years x 52 weeks = 7 weeks spent per app
  • 1,000 apps x 0.1% chance of app winning x 7 weeks per app = 134 man years of development
  • $3.3mm + $1.7mm per winning app / 134 years of development = $37,313 yearly salary
  • $37,313 app developer salary / $20,480 minimum wage in California = 82% better
  • $37,313 app developer salary / $98,000 average software developer in California = 38%

vs. hardware

  • $500 per user spent on hw vs. $15 per user spent on apps (33x more)
  • $500 spent per device vs. $1 spent per app (500x more)
  • ~500 weeks per device vs. 7 weeks per app (71x more)

Software is commodity

I think at this point I can safely argue that the apps, the software, has become a commodity. A single install is worth next to nothing, there are thousands of people building thousands of apps that are exactly the same. And its pretty hard to find any one app in amongst the millions.

Hardware on the other hand is rare, it takes longer to build, its where a lot of the real innovation and enabling happens. But it suffers from one very notable weakness.

It takes longer to build hardware

An app makes 33x less money but takes 71x less effort to build. What happens when it only takes 50x less effort? or 25x? or parity, what happens when it takes only linearly more time to build hardware? or when you make more than linear the amount of money on a sale? What percentage of apps fail? I assumed 99.9% but by comparison what percentage of gadgets fail? I’d wager a lot less than that.

Android is a free and open source operating system that has been shown to run on all kinds of hardware. There are enough designers of hardware that the chip manufacturers will sell anything to anyone these days. The design tools for hardware are becoming commodity. And there are dozens of startups attempting to lower the bar to designing and building hardware [upverter] - it looks a lot like what happened to software in the 90s and early 00’s.

We are on the cusp of something transformative

You can see the start of it with companies like Square, Jawbone, and Nike. Smaller, connected, sensor based hardware. Designed in months by small teams working closely with software developers. Its consumer targeted and just as marketable as a mobile app (and often tightly coupled to one).

We arent that far away from the one-man-team hardware app developers.

Or manufacturing thats ubiqutous enough that you can just click “print”.

Open source “libraries” that save many orders of magnitude in development times.

And design tools that encourage reuse and collabortation above isolation.

Imagine a world where Android runs on everything you own, it was designed by some startup or basement developer, it was manufactured just-in-time and it was shipped to you by Amazon. 

Why we didn’t just make an app

Because we belive in parity. We think there will be a day when its just as easy to build something with atoms and electrons as it is to build something with bits. We saw an ecosystem developing around the idea of open sourcing not just software but hardware too. And we wanted to help push this into happening. We wanted to build a product that multiplies innovation, more so than is an innovation itself.

People can already print in plastic [makerbot], and bash bits in a weekend [project72]. How far away can electrons really be?

About me

Upverter is my 3rd startup. I dropped out of highschool, and then university, both times to run startups. I studied Computer and Electrical Engineering and UWaterloo, and then cut my teeth designing the worlds most powerful network inspection hardware. I left Sandvine to make designing hardware a little less hard, and I think that means collaboration and accessibility.

9 February 2012

Toronto: How We Hire The Best.

So, you’ve got it all figured out. You’ve noticed all the bad ass talent in Toronto [why we’re here], you’ve got yourself a swanky new office at Queen and Spadina [map]. And you’re just about ready to put a shingle [pic] out on the corner and start fending off the swarms of smart, passionate and almost free canuck hackers that Toronto has to offer.

But wait, whats that? Its not working?!?! Do I event need to tell you you’re doing it wrong? Really?

Common son, just because they are from our cold (and beloved) neither-world, doesn’t mean they don’t have options. You are talking about the best talent in the world remember. Cheap is cheap like relative to other places. And if they ever didn’t have options they would just (begrudgingly) head down to the valley and run the place.

You need to get better at this whole recruiting kick-ass people thing. We all do. So in an effort to draw a line in the sand, and raise the bar a little bit, this is our strategy.

Pipeline + Referrals

It starts off simple enough, eh? You need a pipeline, and you need to get referrals. The pipeline is interns, past co-workers, partners, and generally the talent seeds that you’re planting around your business. Some are really deterministic, like co-ops - they take 4 months to sprout, 4 to grow, and BAM you’re done. Other take longer, maybe years - but I’d wager you and your co-founders will still be doing something that looks a lot like this when the time comes.

The referrals come from the greater eco-system you exist in. The belief that you are a premium article. The awareness of your brand, problem and market. And the time you spend making sure that the people who matter (ie. potential hires and their friends) know who you are. Most startups I know are sucking and both of these. The pipeline is obviously pretty hard to hack, that takes a bit of focus and a bit of time. And the referrals often seem blitzed, last minute scrambles where people settle instead of hiring the absolute best of the best.

Get Real

For starters lets just get something out of the way. Your prospects include the best of the best, lets treat them with the respect they deserve. If you’re looking for a co-founder (aka no salary) then be upfront about it, and you better be damn willing to give them half the company. If you’re looking for employee #1 don’t pretend like you’ve got it all figured out - smart people like solving hard problems. And if you’re 5 years old, 30 guys, and your office reminds people of the Matrix, don’t pretend to be a startup. Smart people respect honesty, and are more likely to think you’re smart if you’re candid about your business. Besides, they’re gonna figure it out pretty quick, and they aren’t gonna stick around just because you’ve given them a job offer.

Brand Matters

Figure out who you are, and work it. Maybe you’re the crazy guys working on the crazy hard problems - awesome, own it [plug]. Maybe you’re doing mobile, be the best at that [five]. Social, likewise [mycitylives]. Hell maybe you’re a photo sharing app, but be the best damn photo-sharers in the city [500px]. You are aiming to get mentioned and remembered every time someone kick-ass is poking around for their next thing. You don’t have to have the sexiest thing by any stretch, but you do need to own something. Oh, and if you can’t, you probably have way bigger problems than hiring referrals.

At Upverter we are solving some hard graph /data problems and doing things in the browser that no one has ever even tried before. And the people that get jazzed about these kind of problems know who we are. We have a pretty solid referral stream because of it, and when we’re actively recruiting we get a lot of outside help.

Put In The Time

Guess what, the world probably has no idea who you are. Thats ok, but its only going to hurt you when you’re trying to hire. Im not talking about some epic party either. But you are gonna have to buy some beers. And you’re gonna have to spend some time. You’re gonna have to take a lot of meetings. And you’re going to have to help people who will never help you back. People don’t pick their next career over night, and normal people are incredibly risk adverse. Use this to your advantage (ie build a network that connects and makes you a safer pick).

The same is true of recruiting co-ops, and for the sake of the pipeline you NEED to be hiring them. Throw an event [london], or better yet join one of ours [chainsaw]. Spend time with some students. Build some ambassadors for your company. Make their lives better. Give them swag. I’ve spent the last 8 years being, working with, and hiring UWaterloo co-ops and I can say from experience that the whole process has an incredible inertia to it. Advice: Start the mass moving before you need it to be, and spend the energy to keep it going.

Oh, And One More Thing

I understand why average companies use recruiters. But its my opinion that in a knowledge based business your success is directly tied to the caliber of your team. And if you can’t hire kick-ass talent you need to figure out how, or find someone who can and integrate them into the core of your team ASAP. If you could do it without them, then go do it. But otherwise you better own the talent problem and be hiring the damn best there is.

About Me

Upverter is my 3rd startup. I dropped out of high-school, and then university, both times to run startups. I had hired and managed a dozen co-ops before starting Upverter. We are currently 7/7 kick-ass, and 6/7 UWaterloo engineers who would just rather be here at home in Canada, than down in the valley. Oh, and if you’re passionate, we’re hiring.

1 February 2012

Toronto: Why Are We Here?

It’s winter right now, and that means for those of us in the North-East it’s cold. We try to pretend that it’s a good thing; that it keeps us focused. But the reality is we don’t live and work here because of the snow. We live and work here because smart people love, more than anything else in the world [pg], to work with other smart people. And, make as many snow jokes as you want, but…

Pay attention to Toronto

Canada is the best country in the world to do business in [forbes], Toronto is the most multi-cultural city in the world [wikipedia] (suck-it NYC ;)), we get tax incentives for R&D [gov], and it’s the only city within an hour of one of the worlds foremost engineering schools [uwaterloo, coop program].

So, I say again, you should be paying attention. And if you’ve got your shit together you should be trying to figure out how to get a footprint here. Because believe it or not, we don’t all want/have to be in the valley [fred].

All that being said, I still get this question a lot

There is a (very reasonable) expectation that YC companies make every effort to relocate to silicon valley as part of the program. And the fact that we have most of our operations in Toronto raises some eyebrows. My answer is really simple: The talent is here and it wants to be here. Sometimes I even go as far as talking about how much further our investment takes us when we spend it here instead of in the US, but at it’s root, it’s a talent thing.

Toronto isn’t the only place in the world

Its true. I still spend a tremendous amount of time in the valley. And we have customers all over the world. Simply put there is no perfect place for everything. But if youre building a product business, or looking for talent, you could do much, much worse! Toronto is great for talent, and its a great place to live. Oh… and I’m sure it’s not supposed to matter but like my good friend dave [blog] would say, “just look at the scenery”.

But, it’s also a terrible place to raise money. Like I said, nowhere is perfect.

About Me

Upverter is my 3rd startup. I dropped out of highschool, and then university, both times to run startups. I’ve worked in Ottawa, Waterloo, Stuttgart, Bangalore, and Mountain View. I have never lived in Toronto before, so it’s a first for me, but we’re here because it’s where our team wanted to be. We are currently 7/7 kick-ass, and 6/7 UWaterloo engineers who would just rather be here at home in Canada, than down in the valley. Oh, and if you’re smart, we’re hiring.

3 November 2011

This room got HUGE!


Posted from: CA, USAHoly wow. YC is a big place these days.

31 October 2011

Back to the Valley…

I’m heading back!!! Down for a few weeks of meetings, catching up, and hustling. Im not sure if its just uncontrolled excitement - but I just cant wait to get back on the CalTrain and ride it endlessly - you know?

Kicked-ass last week: Import export, Open format, Lots of squeeks silenced

Next-week: Get back in the zone, lots o’ meetings, lots o’ email

28 October 2011

Guess who got featured in Notable today!

Woot, woot! Its actually a pretty awesome interview. Link.

24 October 2011

OKTOBERFEST!!!

Man that was wicked fun. Phew. We spent almost all of Saturday moaning and playing video games. It was rough. But we rallied and went out and had a few beers with the boys from Comprehend who were in town and then my buddy Rohan kept me up until 6am talking sales strategies. Haha, ugh. So I felt like a winner Sunday morning. The rest of the week was pretty low key.

To be continued: Student reachout, top of the funnel, fundraising prep.