Zak Homuth

Picking up with a Startup

 So I have my first disagreement with Paul Graham. I’m not sure what he was expecting, with regards to using “I’m starting a business” as a pickup line. but its not that bad. Last night, in celebration of the new, before heading back to their real lives, my beloved friends and partners, and I went out for a nice dinner (Probably my last one for many, many months). It was great food, we talked about our dreams and where we wanted to be in 40 years. it was light conversation, but really nice to just chat about. in amongst the conversation we hit on women, marriage and children (I have a wedding to go to in a week). part of me wanted to know if these guys were gonna be ok putting that stuff on hold for 5 years, and part of me wanted to understand their current situation, needs and wants. somehow we ended up talking about companionship and how painful it was going to be to pickup women now according to Paul Graham. so, in an effort to cheer up the boys and prove/disprove Paul’s theories I started harassing the waitress, and we very quickly learned 2 things. first, that Paul might be wrong. and second, that we all need to be less gentle with the description of what we are trying to do, and instead of talking down just focus on the big ideas and sell the passion. because really, passion can sell anything. In the end I was ranked a 4.3 out of 5 for my sales pitch (which I think means I had her in the bag), and escaped home to quickly hack out a sales pitch framework, followed by hugs and excitement and the guys headed back to Toronto. Our first, of our soon to become religious, thrice weekly sync-up calls is Wednesday night and we have a ton to do before our very first deadline of Sept. 1st. Its time to do some real work - which is pretty cool!

Day 2 - Biz Weekend

Yesterday was another great day. We finally got focused at about 2pm and then we just plain slogged away until about 2 in the morning. Most of the time was spent hacking out the business. the way it would be split, when shares would be given out, our culture, how we would spend our money if we every had any, and the type of roles we see ourselves filling as time goes on. There weren’t really any surprises. there was a little bit of head bashing over company honesty and openness, but otherwise it was all really smooth. We spent the rest of the day hacking on the ideas we are excited about. We have minimum value propositions for 3 of them and its pretty neat. I’m not sure what we are going to be doing today, but its time to get to work!

Day 1 - Biz Weekend

 Well its hangover day… I mean day one of biz weekend… and so far Mike and I are sitting on the couch eating delicious cold meats and fruit crepes. Steve has gone for a jog (we were a little confused too). The neighbor is anxiously cleaning my backyard. and ED is upstairs still puking her guts out. so with all this excitement - its time to get to work. Tons of news to follow for sure!

BBQ DAY!!!

 Today is BBQ day. And I’m sooo freaking excited! Status update follows:

• The pork belly is resting and hydrating after its uber double smokadge.
• The ribs have been on all night and are in need of a little apple juice morning nap.
• The beef is coming out of the fridge to warm up and dry out a little bit.
• The duck is chilling out in the fridge and otherwise ready to go.
• The rabbit is marinating, and waiting for its turn on the grill.
• And the lamb looks outstanding and will be going on the smoker shortly.
• The salads and desert need a little attention

Errands outstanding:

• Beer Store
• Bread
• Butter

Dang, there’s a lot to do today! but this is one of my favorite kinds of busy. I’ve said it before, but there is just something special about feeding people. Make sure you show up tonight! I have tons to talk about, and I want to reminisce a little before I move out!!! it has been a long time afterall.

Paul Graham (might be a Jedi)

 I dunno if he is quite the start-up Ninja, Jedi Master that my business partner thinks he is, and I’m not sure I’m ready to pony up the fan club membership fee, but he sure does write some pretty darn good stuff. In preparation for biz weekend I’m reading through a dozen or so of his essays. the list was picked out by Steve as the ones most likely to put all of us on the same page for our conversations this weekend. and so far they really are very good. whats kinda nice is the number of similarities so far. when talking with Brad and hearing 2nd hand accounts of the VCs and Startup guys in the valley, and now reading these essays, its nice to know there is a bunch of overlap. everyone has the same concerns and wants us to resolve the same issues. which is really very cool. I think I would be less confident in our support network if none of them could agree on anything, but right now I think its fantastic. In case you want someone new to stalk, the short list of must reads is (http://www.paulgraham.com/):

• How Not To Die
• How To Be An Angle Investor
• How To Fund A Startup
• How To Present To Investors
• Ideas For Startups
• Ramen Profitable
• Relentlessly Resourceful
• The 18 Mistakes That Kill Startups
• The Equity Equation
• The Hardest Lessons For Startups To Learn
• The Top Idea In Your Mind
• What Startups Are Really Like
• Why To Not Start A Startup

The Fallout

 The fallout - was really a lot more like the best day I’ve had in a while. Everyone was super cool. Abuse was pretty minor. and I even got the thumbs up from Brad to chase the dream. very, very cool. When I speced out this posting I was planing on having a ton more to say about the incredible psychological torment I endured today, or the sneaky guilt tripping I had to sidestep. but no, nothing. nothing except thumbs up and encouragement. I’ve gone from working with some of the smartest people, and most successful entrepreneurs I know to, to having them rooting for me from my corner. I could fly right now, if I wasn’t furiously hacking on my laptop.

The End of an Era

 Sandvine just isn’t the place that it used to be. their neither young nor wild. they’re old. they are a bunch, or albeit very nice and intelligent, married with children, 9-5, put in my time - put in a little extra - then go home guys. its a place with different expectations based on your age and marital condition, where the young guys cut their chops and the old guys go home to their kids. and that’s fine. in fact they are the coolest place I have ever worked in that kind of situation. but its not exciting anymore. its not fresh, not crazy, not do-or die, and everyone isn’t in it the same. As my time at Sandvine progressed I started to notice the company getting older. for about 6 months there was a baby a week on the intranet, interspersed with marriage announcements. but then came the crises and it seemed that night after night the only guys in the office after 6 were 23, unmarried, and super excited about their jobs. and we shipped every crises, saved the day everytime. but it wasn’t ok. it wasn’t really a very good learning experience, and it sure as hell wasn’t our fault (in a lot of cases the guys designing the boards and architecting the software were at home), which in my mind means we just gave a bigger shit than they did. None of this is bad. and I’m certainly not saying Sandvine is anything but a great employer. but if you’re looking for exciting, new, and interesting; that energy a young company has, its not the place for you. and more importantly me. anymore. So today is the day. lets see what happens…

Define Your Life

It’s August now (and yes I realize that happened a day ago smart ass). Its the month before September. and in 25 days I will be unemployed. in 25 days I will be full-time, chasing the dream. How scary is that! How cool is that!!! Holy wow, to be on the cusp of this great big new beginning is pretty overwhelming at times. When I was a kid, I got pretty into what I was doing. I tended to go deep, and I guess I still do. My mom tells stories about how I would go out on the playground, and get absolutely so enthralled by something in my own little world that I wouldn’t really notice the kids around me, the school bell, or the fact that for 15 or 20 minutes I was the only person on the playground. this was before teachers spent the recess aggressively monitoring kids, I was too young to not want to go back to class, and too old to not know that I should. The teachers would take attendance, report me as absent (or missing) and rush to the principals office to call my mother. who would somewhat frustratedly ask if they had checked for me on the playground. at first I think the teachers didn’t understand, why wouldn’t I come in with everyone else? but sure enough, time after time, that’s where I was. incredibly deep and focused on something. the moral of the story: I go deep.

Now as I’ve gotten older I’ve realized that there is a lot to be said about thinking big, thinking wide, and backing up from a problem that I would have, in younger years, missed my afternoon classes for. So indulge me, and for second, and lets step back. I am quitting my job, chasing my dream, working with the smartest people I know, trying to write our own tickets, and make the world a better place in our own way. and if you don’t think this is just the coolest shit ever, I feel a little sorry for you, because you’re totally into the wrong kind of stuff. Not to give myself more reasons to drink aggressively when it all crashes and burns, but these are the days that will define what I do for the rest of my life, and probably a large portion of my eventual success or mediocrity. and when I type that, and when you read it, we both have to be really careful that we see the spectacular possibilities therein and be sure not to focus on how incredibly paralyzing and overwhelming that statement is.

Because really, how often do you wake up and say: today is absolutely, without a doubt, defining the rest of my life. because that’s what I got to say this morning.

Chatting With My Parents

So I have to apologize for being a slack ass on this posting. The chat didn’t so much happen on Saturday as I was hoping it would. but better late than never.

- - - -

 So I was supposed to be out raising hell with the boys on Friday night and then spending the weekend camping up on the Bruce Peninsula with Pat and the gang. it was gonna be great. but after the hiccups at the bank last week my mom convinced me to come home and spend the weekend talking the game plan over with her and dad. which in a way was good. to sort everything out before quitting my job and doing so with everyone in the loop. to talk about my loan and payments and finally to sort out living arrangements should I need a place to sleep in September. Now I do have to say that I am missing not going camping. it would have been a great time! and its too bad that this came up. and for the record, Pat + gang, I’m sorry I stood you up. but it really was something I needed to come home for. And it was more than I could have hoped for. it was all really great. I have a place to sleep, and I have a bank-payment safety net. which makes this whole project so much easier to stomach. its gonna work. its gonna be great. and i’m not going to have to be too homeless or bankrupt in the process. all good things.

So one of the guys involved in this little adventure has been given an absolutely amazing opportunity. He works for a start-up that is being run by the early stage start-up guys that jump from business to business, work their magic for a year or two and then jump to the next one. They are start-up experts. You ever decide you want to do something you know nothing about, and you just wish you could sit down for a beer with a pro and pick their brain. well these guys, are those guys, for us right now. and they have offered to coach us and put us through a homebrew “business school for start-ups”. now there is a small catch. my buddy has to stick around and work for these guys for us to get to go to school. I have 2 opinions on this. first that its a little sneaky, and after being myself spectacularly jaded by the promises never fulfilled, I worry that he is gonna take them up on their offers only to be disappointed with the results. but secondly and more importantly, I think this is a hell of an opportunity. this could totally be one of those defining moments, one of the reasons that we win when everyone around us loses. this could be huge. In assistance of his decision making, brain hurting, couple weeks of reflection he has put together a list of questions. which I promptly wavifyed and started twiddling with. its a great brain dump (see below). now a lot of the things on the list I think were gonna figure out within minutes in the line of fire. but there are a few of these things (the VC stuff in particular) that I just don’t know how else you figure out. For me I’m going to be carrying a copy of this list with me on my adventures into resignation and when I go brain picking over the coming weeks. its really going to be one of those things where every answer and opinion helps paint a picture. so without further ado, the list:

• How does the VC market work?
  • what are the different types of investments people make and what are the important points?
    • common stock, preferred stock, liquidation preferences
    • rights of first refusal, right of first offer
    • convertible venture debt, loans
    • vesting schedules
    • government grants
    • personal investments
    • angles
  • How important is it to balance your investors (trying to prevent a single entity from having overwhelming control)?
  • How are valuations calculated? pre-money, post-money, how does it all matter? What’s the dance?
  • How do valuations change over time?
  • Dilution? What do you want, don’t want? How do you avoid it?
  • Stock issuances? What mechanics does it provide? Under what conditions can you issue more?
  • What does the VC market as a whole look like? Who are the players there?
  • What are some of the difference between Silicon Valley VC’s and East coast ones? How about those in Ontario/Canada?
  • How much money do you look for at different points and how much ownership do you give up?
  • How should we deal with angle funding? Money from friends and family?
    • When is it good? When is it bad?
    • What’s reasonable compensation?
  • Time sheets? WTF?
  • Funding rounds? AA, A, B, C? What’s it all mean? What do people expect at each step?
  • Where are VC’s looking for you to aim? What do they want to see for an exit?

• Board of directors
  • When do you need one?
  • How do you go about finding a people to be on your board?
  • What kind of compensation is involved here?
  • How involved does the board end up being?

• Hiring executives?
  • How does hiring for the different roles very?
  • Compensation?
  • Where do you look for people?
  • When do you start looking for a CTO, CEO, CFO…
  • What are you look for in each of these roles?
  • How long can/should each of us fill these positions?

• What goes into a pitch deck?
  • What are people looking to hear?
  • How do you judge their response?

• Market experts and advisors
  • How do you find them?
  • How do you go about asking for advice?
  • Who are important people, companies, groups in some of the areas we’re looking at?

• Market research and business plans
  • What do we need to do?
  • How much is enough?

• Acquisitions and partnerships
  • How do you approach someone?
  • How do you let someone approach someone approach you?
  • What’s the dance that’s done here?
  • What’s some of the legal side of this?
  • What do you have to be careful of?
  • When would you want to try and acquire someone else? talent? users?

• IPO’s
  • When, Where, How?
  • Difference for investors as an exit?

• Lawyers
  • When do we need them?
  • How do you find the right ones?
  • Special startup lawyers?

• Networking
  • Where do you find all of these people to schmooze with? Potential investors, media, partners?
  • Conferences? picking the right ones?

• Formation of the company
  • What structure options do we have? How do they all matter?
  • What goes into an operating plan?
  • How do we divide up equity?
  • How much do you plan for the dissolution of the company (someone wants to leave…)?
  • How do you set salaries for the founders? When does this change and how?
  • When we want to operate in the US and Canada what do we have to do?
  • When do we have to pick these things?
  • Location? How much does it matter? How do we hurt ourselves starting in a non-hub city? (the valley, Boston, Austin TX…)

• Growth of a company
  • Dealing with growing pains?
  • Finding the right people and how to compensate them?
  • How quickly do we need to settle on an idea? We’ve got lots of ideas? How long should we spend feeling them out?

• Media/PR
  • When to you need to start worrying about it?
  • How do you manage the media? Things like “leaking” to the right people?
  • Generating “buzz”? Seems hokey but everyone talks about it.
  • Traditional media vs “social media”?
  • Dealing with negative press? Upset users? Bad reviews?
  • Keeping a company blog? does it really help?

• When to release products?
  • Finding the balance between quality and time?
  • Dealing with bad product releases? And God forbid recalls
  • Diversity in the product offering? When does it matter? too many eggs in one basket problems one way, fingers in too many pies the other

• Monetization
  • Deciding between freemium, ad supported, traditional products
  • Enterprise vs consumer?

• Competition
  • What can or should you do about competition?
  • Differences between established players (where you’re entering the market) and new comers to your game?
  • What goes into positioning your self against others?

• Culture
  • What things go into building a good culture?
  • What should you be careful of?
  • How do you manage the culture of the company as it grows?