Tuesday, October 15, 2019

Startup-People of Seattle: Rebecca Lovell (Executive Director at Create33)

The blog-series “Startup People of Seattle” introduces some of the key personas in the ecosystem to learn more about what they are doing, to share their thoughts and ideas, and to promote networking.


In our 11th interview, meet Rebecca Lovell:
“More needs to be done to enable access to resources for underrepresented entrepreneurs, especially women and people of color.”
Rebecca has been involved in several key organizations in Seattle’s startup ecosystem, such as Alliance of Angels, Northwest Entrepreneur Network, GeekWire and the University of Washington. Today, Rebecca is executive director of Create33, a resource center for technology entrepreneurs.


Q: Could you introduce yourself and Create 33?
A: I am the executive director of Create33. Create33 is a resource center for entrepreneurs providing access to customers, capital and talent through educational programming, mentorship and connections. We also provide workspace and a supportive community. However, we’re really in a new category and not a typical coworking space. We have as much in common with an incubator or accelerator.
Q: Having worked with a lot of startups, what do you regularly see entrepreneurs struggle with?
A: Our focus here at Create33 is on seed-funded entrepreneurs. The biggest challenges facing those entrepreneurs tend to be hiring a team, fine-tuning customer-acquisition, and seeking series A funding. Consequently, most of our educational programming focuses on team-building, culture, talent acquisition, customer discovery, understanding the investment landscape, etc. 
Culture is key and should be a high priority to startups very early on. Once a culture has formed it is very difficult to change. A benefit of a positive culture is that it attracts talent, which is important for startups competing with big, financially strong companies that can pay high salaries.
Q: Why does Create33 focus on seed-funded entrepreneurs?
A: In Seattle, many resources exist for entrepreneurs in the idea-phase all the way to raising seed funding. Examples for organizations focused on startups in those very early stages are: Seattle Angel Conference, Alliance of Angels, Techstars and “Ready, Set, Raise” by Female Founders Alliance. After entrepreneurs raise their first institutional funding, however, they fall off a resource cliff in Seattle. 
Q: On LinkedIn you say: “In the heart of Seattle's thriving innovation ecosystem, Create33 is a resource center for technology entrepreneurs.” Why would you describe the ecosystem as thriving and what do you think are its strength and areas of improvement?
A: In Seattle, not only do we have early-stage investors like SAC, AoA, and Madrona, that are located here, but three quarters of the money flowing into Seattle-based companies comes from outside-the-region investors. This demonstrates that Seattle is being perceived as a global hub for innovation and entrepreneurship. In addition to that, the startup community in Seattle is very collaborative offering a lot of mentorship opportunities to founders. Seattle is also the cloud capital of the world which is why a lot of startups in Seattle are enterprise-focused.
Regarding weaknesses of the ecosystem, more needs to be done to enable access to resources for underrepresented entrepreneurs, especially women and people of color. Data shows that nationwide in the last 13 years only 16 percent of first-round venture funding went into women-led startups, “women-led” meaning that at least one woman is on the founding team. In this respect Seattle placed below the national average. One potential reason this is, which the study revealed, is that women-led companies tend to over-index in consumer products and retail. Seattle’s startup ecosystem on the other hand has a strong enterprise-focus. Not only equal opportunities for women should be part of the discussion, but the same applies to people of color or the LGBTQ+ community for example. Some great organizations, like Female Founders Alliance and Future For Us, support under-represented groups in Seattle, and we need much more of that, not just as stand-alone organizations but for all of us to commit to inclusion and belonging in the workplace.
Q: What do you think makes a successful entrepreneur?
A: Founders that I love working with are the ones who have a magical combination of confidence and humility. Those founders have the conviction and passion to pursue a dream, that is just a little short of crazy, but at the same time they are listening to their market and customers. This is the coachability-aspect that many mentors and investors are looking for in a founder. 
Q: What advise do you often give to founders?
A: A classic mistake founders have made in investor pitches is to say that they have no competition. I advise companies to think about alternative ways customers currently solve a problem. If there truly is no competition, there is no market opportunity as there is no problem worth solving.
I also coach founders on the lean startup methodology with respect to customer discovery. Founders start with a hypothesis about what customers need, but before they go to work on the product or write a line of code, they should test the hypothesis by talking to 100-200 potential customers.


Here are some things I learned from this interview:
  • Building a team and creating a positive company culture are crucial to startup success and require a lot of attention from the founders.
  • Strength of Seattle’s startup ecosystem are: Availability of pre-seed resources and collaboration/mentorship-opportunities.
  • Regarding weaknesses of the ecosystem, a lot more could be done to support under-represented entrepreneurs.
  • Every startup has competition.
  • Talking to customers is key.


In the interview Rebecca mentioned some resources and organizations, find out more about them here:
Seattle Angel Conference: https://www.seattleangelconference.com/
“Ready, Set, Raise”: https://femalefounders.org/accelerator/
Female Founders Alliance: https://femalefounders.org/
Madrona Venture Group: https://www.madrona.com/
Future For Us: https://futureforus.co/


About Seattle Angel:
A strong ecosystem creates an environment that allows startups to thrive. Seattle Angel’s goal is to strengthen Seattle’s startup ecosystem by increasing the access to funding for entrepreneurs to push their ideas further.


About the author: Sven Goepfrich

Sven Goepfrich is currently finishing his MBA in Syracuse. His studies focus on technology, innovation and entrepreneurship. At his school, he is working for the department of finance. Sven was actively interning with the Seattle Angel Conference in summer 2019. He is currently looking for full-time career opportunities in this field.

Tuesday, October 8, 2019

Startup-People of Seattle: Geoff Harris (Venture Capital)

The blog-series “Startup People of Seattle” introduces some of the key personas in the ecosystem to learn more about what they are doing, to share their thoughts and ideas, and to promote networking.


In our tenth interview, meet Geoff Harris:
“What I discovered during my years as business angel was that there is enough angel money in Seattle. Startups don’t struggle in their angel rounds. There is also enough Series A and B money. However, the first institutional round, called the seed round, is very underfunded.”
Geoff has many years of experience as an angel investor. He has been involved in many angel groups. Today he is partner of Flying Fish Ventures, a seed-focused VC-fund.
https://www.linkedin.com/in/geoffhar/



Q: Could you please shortly introduce yourself and, coming from Microsoft, your background in the entrepreneurship scene?
A: I got into entrepreneurship via angel investing. Specifically, my first exposure to that was the Seattle Angel Conference, which a colleague of mine motivated me to participate in. After that experience, I became deeply involved in angel investing for about five years doing angel investing basically as a full-time job after retiring from Microsoft. I was involved in about half the angel-related groups in town.
What I discovered during my years as business angel was that there is enough angel money in Seattle. Startups don’t struggle in their angel rounds. There is also enough Series A and B money. However, the first institutional round, called the seed round, is very underfunded. As a result, many companies fail or relocate to Silicon Valley. Flying Fish Ventures is a consequence of realizing this gap in funding.
Q: Could you explain the terms “Seed” and “Series A”?
A: A seed investment is the first investment of institutional capital. It tends to be a raise around two to three million dollars, and its goal is to get a product from the point where it is ready to launch to the point where it achieves Series A metrics. 
Series A tends to be growth capital. By the time you get to series A the business should be pretty much dialed in and the founding team should have found a repeatable business process. At this point, inputs and outputs should be predictable, meaning an investor can calculate that if he/she invests x-amount of dollars, this will allow the business to achieve y-amount of growth resulting in a return of z dollars.
Q: You said you started your startup journey as angel investor. What all groups have you been involved in?
A: I was a member of the Alliance of Angels and I still sit on their screening committee. I was also an angel investor in Techstars and SeaChange and I am a mentor in the Alexa Accelerator. About half of my investing, however, I have done individually. Being member of all the angel groups allowed me to have good deal flow.
Q: What was your biggest surprise about angel investing when you started?
A: Coming from a big company, like Microsoft, the biggest surprise initially was the efficiency of startups, meaning how much they can do with very little resources.
I was also surprised by the lack of discipline and structure in an angel-only round vs. an institutional round. 
Q: What are some of the things you have learned as an angel investor?
A: One thing I have learned, that is very basic, is the portfolio theory. The portfolio theory says that doing a single angel investment, or just five angel investments, is not a good idea. You must build a portfolio of investments because, while every single company itself looks like a potentially good investment, you cannot predict which startups will succeed.
Q: Now let’s talk about Flying Fish Ventures. What is the fund’s investment thesis?
A: We are a regional fund. Like I said earlier, we believe that this market (Portland; Seattle and Vancouver, BC) is underserved, which we view as an investment opportunity. A lot of startups are looking for seed funding. Regarding specific industry, we focus on AI and machine learning. 
Q: What do you think of the trade-off between diversifying a portfolio vs. investing in one industry that you have expertise in?
A: I recommend doing the latter. However, most angels don’t have a thesis, they tend to invest in whatever looks good. Part of the reason for this is the intellectual satisfaction that comes from learning about new industries. 
Q: Since you believe investors should stick to what they know, how closely do you think they should work with companies that they invest in?
A: I think the involvement should be tailored to the needs of the business. It is, for example, a completely different level of involvement that is healthy depending on the experience of the founding team.
Also, in an institutional round being involved in the startup is much easier. In an angel round, often there are many angels (10 to 30) who invest in one round. If each of these angels feels like he or she now has a say in the company, things get messy and overwhelming for the founder very quickly. 
Q: What do you think are the biggest challenges in angel investing and VC-investing?
A: I think the biggest challenge is deal-flow, meaning the amount of quality deals that you get the opportunity to participate in. I think most investors are reasonably good at selecting which companies potentially could be a good investment. Coming along those companies, however, is not easy.
For VC, if you are a popular VC firm, this is not as much of a problem. Startups will most likely come to you. Therefore, I’d recommend angels to also become a limited partner (LP) in a popular fund to have more exposure to good deals.
I also think that when it comes to angel investing, Seattle needs more lead-investors. Lead investors, or “super” investors, are willing to be the first ones to invest in a company and to lead an investment round.


Here are some things I learned from this interview:
  • An angel round typically involves 10-30 angel investors. It is very rare that one single angel invests an amount that is big enough to cover the needs of a whole investment round. 
  • Deal-flow is key for investors. To increase deal flow, angel investors should be involved in angel groups, funds and networks and in VC funds. 


In the interview Geoff mentioned some resources and organizations he finds helpful, find out more about them here:
Seattle Angel Conference: https://www.seattleangelconference.com/
SeaChange Fund: https://seachange.fund/


About Seattle Angel:
A strong ecosystem creates an environment that allows startups to thrive. Seattle Angel’s goal is to strengthen Seattle’s startup ecosystem by increasing the access to funding for entrepreneurs to push their ideas further.

About the author: Sven Goepfrich

Sven Goepfrich is currently finishing his MBA in Syracuse. His studies focus on technology, innovation and entrepreneurship. At his school, he is working for the department of finance. Sven was actively interning with the Seattle Angel Conference in summer 2019. He is currently looking for full-time career opportunities in this field.

Tuesday, October 1, 2019

Startup-People of Seattle: Josh Trujillo (Ecosystem builder)

The blog-series “Startup People of Seattle” introduces some of the key personas in the ecosystem to learn more about what they are doing, to share their thoughts and ideas, and to promote networking.

In our ninth interview, meet Josh Trujillo: 

“The two things founders who I have talked to struggled with the most were hiring and sales.”
Josh recently moved from San Francisco to Seattle. He now is member success manager at Galvanize. Ahead of this interview, Josh talked to many entrepreneurs at Galvanize asking them what they struggle with most.


Q: To start, could you please shortly introduce yourself?
A: I just joined the Galvanize team as member success manager. My role as such is to make sure that startups here have access to the right resources to grow. What that means is that I try to ensure that Galvanizes’ mentorship programs and events are tailored to the problems that founders face daily.
Before Galvanize, I spent the last two years creating and running an innovation hub/early stage incubator, called 42 Accelerate, within the nonprofit coding school 42 Silicon Valley. 42 Accelerate was all about helping founders go from Ideation to MVP. Before that, I had a startup called Zimetry. 
Q: You just moved from Silicon Valley to Seattle. Could you talk some about how the startup ecosystems are different?
A: For once, startups at both places have very different goals. In Silicon Valley, for a long time, the philosophy has been to use massive amounts of money early on without any potential of profitability for 8-10 years. The goal was to first get as many active users as possible, and then to figure out how to monetize the business. This approach seems outdated though, and I think Seattle is ahead when it comes to teaching the new startup philosophy – the “Lean Startup”-approach. According to “Lean Startup,” the goal of monetization should be a high priority very early on.
Silicon Valley, on the other hand, is very strong in understanding the value of customer feedback. Most founders there embrace talking to customers at every step along the way.
Other than that, the kinds of startups in the two ecosystems are very different. In Seattle there are much more B2B startups while Silicon Valley is very consumer-focused.
Q: Could you talk some about the value Galvanize provides to its member founders?
A: Most coworking spaces have some sort of focus, and ours is on startups. What makes us unique, I think, is the customization of our programming and our efforts to understand the founder’s needs. My position, “member success,” for example, is not a position that exists in other coworking spaces. 
Other benefits are:
  • We regularly host community events here, like the Open Coffee that takes place every Tuesday morning. 
  • We organize internal events for our members that are tailored to the problems founders currently face.
  • We have about 30 mentors on campus. 
  • We have partners who are willing to offer free legal advice, marketing advice, etc. 
  • We can introduce our members to people in our network, like product managers or senior engineers for example.
Q: You mentioned before that part of your role with Galvanize is to understand what problems entrepreneurs are facing. Could you talk some about what you have discovered so far?
A: The two things founders who I have talked to struggled with the most were hiring and sales. For tech companies, hiring is naturally one of the biggest challenges. Here at Galvanize, many companies are in their series A range and are hiring for the first time. People say that the first 20 employees a founder hires determine the success of his company. This explains why hiring is such an important topic among founders here.
Another aspect many founders struggle with is sales. Often, technical founders have not found themselves in a sales role before, but they might not yet be in the position to hire someone else. For this reason, many of our members are in the challenging position that they must learn how to pitch their company and sell products.
Talking about problems founders face, investor access was not mentioned as often as hiring and sales, but some founders still brought this up as well. Seattle is strong in angel and series A investing, but when it comes to series B, there seems to be a gap in funding. My advice for startups regarding this is to start networking and practicing early on, 6 months before even looking for an investment in example. During this time, a startup can learn from feedback and build relationships with investors.
Some additional aspects that weren’t brought up by founders but that I observe as issues are:
  • As mentioned earlier, I think most founders in Seattle do not fully use the potential of customer feedback.
  • Also, cofounder problems are frequently the reason why a company doesn’t work out. To avoid cofounder problems, a founding team should take the time to get to know each other very well; they should take time to discuss their goals and expectations, and they should possess complementary skills.
Q: Did startups bring up problems in their relationship to angel investors at all?
A: In Seattle I have not heard such complaints yet. I think though that founders should search for angels who try to help with their expertise and network in addition to the investment. At the same time, you want the investor to not control the execution to the point where it slows down decision-making. I think communication is important in the relationship between founder and investor and the terms of the investment should be clear to both sides from the beginning. I recommend founders to screen investors just as much as investors screen startups before committing to the relationship.
Q: What is your conclusion from all that you have experienced about the startup ecosystem in Seattle so far?
A: I think that Seattle is in a great position going forward. Like I said, I think it is good that many preach the “Lean Startup” methodology here. Especially the talent this area has in cloud services will provide many opportunities going forward. I also have been surprised by how connected the startup community is here in Seattle. 

Here are some things I learned from this interview:
  • Many founders struggle with hiring and sales, but also investor access and cofounder problems are relevant issues.
  • Seattle’s founders could embrace customer feedback more.
  • Founders should interact with investors much earlier than when looking for funding.

In the interview Josh mentioned some resources and organizations he finds helpful, find out more about them here:
42 Silicon Valley: https://www.42.us.org/

About Seattle Angel:

A strong ecosystem creates an environment that allows startups to thrive. Seattle Angel’s goal is to strengthen Seattle’s startup ecosystem by increasing the access to funding for entrepreneurs to push their ideas further.

About the author: Sven Goepfrich 

Sven Goepfrich is currently finishing his MBA in Syracuse. His studies focus on technology, innovation and entrepreneurship. At his school, he is working for the department of finance. Sven was actively interning with the Seattle Angel Conference in summer 2019. He is currently looking for full-time career opportunities in this field.