Of Saviors and Skeptics: Cleveland’s Obsession with Silver Bullets



It’s an exciting time in our beloved city’s business community. There is a feeling that anything could happen, and that all possible futures might be better than the status quo. Several initiatives and reports have taken the focus recently, with bold visions of what Cleveland can be and should do. I’ve heard many people admonishing those with concerns about these projects as having “typical Cleveland mindsets” and flippantly dismissing them as “naysayers.” As a founder excited about the promise of these efforts, but lifetime Ohioan, let me try to bridge the gap between enthusiast and skeptic. The initiatives getting the majority of the attention are all rooted in “transformational change.” This is a tried-and-true Midwestern approach. It’s always about “building the largest thing” or becoming “the capital of” another thing. Swinging for the fences and thinking big are the metaphors of choice at the moment, and have been for the majority of my memory. I don’t disagree that bold visions and speaking with certainty are important to catalyzing change. The thing about swinging for the fences is that when you fall short, it’s usually a quick out. This has been the story with several of the game-changing projects that we’ve undertaken in recent history. It’s not that they didn’t have promise, rather the will (whether political or financial) to follow through ran short. Some of our best results have come from the most aged programs. Look at JumpStart’s 15 years of continued monetary and cultural returns. Destination Cleveland has altered the perception of our metropolis in the minds of countless visitors. Jobs Ohio and Third Frontier have done material good for the state’s economy. These are well-funded initiatives with specific goals. They’ve also had the time and space to make incremental improvements and learnings. Grind-it-out stories of building a wall by laying individual bricks. My years of startup life have taught me plenty about seeing things through. They’ve also taught me about the importance of defining success and embracing failure. Not every great idea works out. Not every late night of fevered programming results in usable code. Not every iteration of a logo design leads to an acceptable result. Not every sales call means revenue in the door. It doesn’t mean that those hours and labors were wasted. Rather, they serve as opportunities to practice, to hone skills and to learn from mistakes. Even failed startups build relationships, develop muscle memory and improve odds for future success. They instill value in hard work, persistent effort and small wins. So, too, should be our approach to initiatives to change Northeast Ohio’s economic outlook. Here’s how we can maximize the outcomes: Focus on founders Startups fuel the engine of emerging economies. Without founders, that motor grinds to a halt. Founders are the key. Regions with poor startup communities view entrepreneurs as grist for the mill. The best ones treat them as catalysts, leaders, even celebrities. We should view ourselves as cheerleaders for, and servants to, entrepreneurs. Every PowerPoint slide mapping the ecosystem should have founders as the hub of the wheel, not as a spoke. Every decision made on a new innovation space should be through the lens of what will attract and help entrepreneurs. Every conference should be about informing and connecting those starting and running companies. Build relationships Never before have I seen such levels of cooperation between civic leaders, business owners and economic development organizations. The relationships developed are going to be fruitful regardless of the outcome of any one mission. So, too, have been the results of StartInCLE’s events and platforms. We’ve never seen more founders connecting on a deeper level and building real relationships that can benefit each of us, but also as a whole. Simplify social structures Committees and subcommittees are great for structuring unwieldy groups and focusing labors. They’re not great at allowing for the organized chaos and serendipity required to encourage greatness. Democratize and decentralize with technology. Make smaller objectives Lofty goals are important. But let’s set out a plan of action that gets us there with smaller steps that each have their own value. Track metrics against the sub-objectives to get a picture of how we’re progressing to the final goal. Keep going Even if we’re not the “Capital of X Technology” by 2020, why should we stop working together toward being one of the hot spots? If we don’t end up with the “World’s Largest Z,” why can’t we just have a great one, filled with talented energetic people doing amazing things? You don’t have to be the very best of something to have value. Your worth is not based in superlatives, and neither is Cleveland’s. The future is in our hands, and many of us are showing our commitment to Northeast Ohio by engaging and making an effort. No one will “naysay” our intent to help, and we should not begrudge their well-earned skepticism of “savior projects.” I encourage everyone to do something to improve our region’s future. Any of the initiatives in the spotlight will welcome your involvement. Bringing together three peers over coffee or mentoring a young founder can have dramatic impact. Don’t be discouraged if your contributions feel small. They are important. Cleveland has always been great. Yes, it can be improved, but it doesn’t need to be the best at anything for me to happily call it home. Listen to LeBron James’ advice to the media after Game 1 of the NBA Finals … “Be better tomorrow.” Tweet Permalink • View comments

Unified Theory of Investor Motivations



startupped: Recently, while talking with one of the startups I advise I was struck by how misunderstood investor motivations were. In an effort to help the uninitiated gain insight into the minds of angels, super-angels, VC partners, and "job-creators" in general, I humbly present “The Three F’s of Investor Motivation”. (Apologies for the glaring generalities and stereotypification. Not all investors are so easily categorized, I simply want to provide a framework for entrepreneurs to work from when assessing a potential investor-fit.) Fortune The most traditional, fortune is the motivation that you’d expect an investor to have. Critical analysis of the product’s potential to make them money is the cornerstone of this tenet with investors looking at not only opportunity for revenue generation, but opportunity for exit. These investors aren’t interested in how cool the product is, how much good it’s doing children in the third-world, or that you’d like to “stay small and grow organically”. Math is the driving factor here, and you need to be able to speak to not only the path to revenue / growth, but to the ultimate potential return for the investor. Terms will be negotiated, re-negotiated, and re-negotiated again until the structure provides for the outcome the investor expects. Tranches will be suggested, with specific milestones gating each cash influx. These folks love proven business models, experienced and talented teams, a show of traction, and metrics. They typically dislike fads, bubble-ish terms, and “new” ideas. What to have in your pitch deck: Metrics to date & projected

Specifics about proposed investment terms and use of capital

Math & assumptions around revenue projections

Exit opportunities and reasoning behind each

Fame The celebrity investor is less interested in the money your company could make them (though the point of the Venn diagram is that every investor is a combination of all three motivations) and more interested in what people will think about their investment. Your product’s glamour factor is the cornerstone of this tenet with the investor anticipating what level of “halo effect” they’ll receive by being involved. These investors want people to know how rich, savvy, hip, and knowledgeable they are. They will offer terms without seeing any details just to impress the new intern in the room. They will leave the meeting and tweet about being pitched by you, how naïve you were and how they’re going to help you “make this thing real”. They obsess over their Klout score, Google themselves, have a column in TweetDeck with a standing search for their name or their firm’s name. These aspiring luminaries want attention, to be known as “rock stars” or “super-angels”, to be respected by their peers, and to be part of “the scene”. They want your business to make as much noise as possible, to be viewed as successful no matter what, and to be cool as ice. Fads are preferred and terms / DD are almost ignored. They hate B2B, things that “won’t scale”, and couldn't give two shits about revenue models. They’ll suggest turning down an acquisition if the acquiring brand isn’t trendy enough. What to have in your pitch deck: Scale projections, the bigger the better (we’re talking %s of the world’s population)

A “cool” brand and social strategy, previous viral growth examples are a bonus

Buzzwords like “Premium”, “Rock star”, “Eyeballs”, “Social Media Strategy”, “Viral”

Comparisons to devastatingly hip brands, “We’re like Pinterest for X!”

Fun These guys/gals want to be involved. They’re the social investors. Fun-motivation heavy investors are typically the gals/guys that have some extra cash and are looking for something interesting to spend their time on. The cornerstone of this investor’s thesis is “Hey, that looks nifty! How can I help?” These investors get what you’re building. They understand your business model, the challenges that you’re going to face, and want to help. They can be counted on to pick up the phone and call that big potential client. They want to tell their friends about what you’re doing. They view your success as their success. These folks are your partners in crime (whether you like it or not). They are going to show up to your office and offer to help. They want to know details of what you’re doing, thinking, planning, eating, drinking, spending on, talking about when they’re not around, etc. They aren’t fans of people who do things differently than they might. They will give advice on how to dress and speak and use your hands when pitching. They want to know how their money is being spent. They hate founders taking vacation, not having their advice followed, and not being told immediately if an analyst at a third-tier VC cold-called asking if you are “lookin’ to raise”. What to have in your pitch deck: Include “Adult Supervision” in your ask slide

Micro-managerial details of how capital will be spent

A need for their expertise & connections

Proof that you’d be fun to grab a beer with

The “Best” Investors As you might expect, there are infinite varieties and combinations of the three F’s. No potential investor is wholly motivated by a single tenet, and most are a blend of all three. Additionally, all three can provide great benefit to your business. Fortune investors can help you keep your business model in line, help you optimize your process, and keep you honest. Fame investors can bring a great deal of partners, customers, investors, and traction to the table by simply being involved. Fun investors help you execute, and can bring a fresh set of eyes to the situation that you would have never expected. There are plenty of other motivations as well. Even altruism can appear when the occasion arises. Living in the Midwest, I see lots of people motivated to “help local entrepreneurs”, which is nothing if not commendable. Some people just have money to blow and want to be able to tell their friends that they’re “doing a start up”. Others are in it for the thrill of the negotiation. They’ll tell you about how much they can help, what they’ll bring to the table, how much they believe in you, then negotiate the harshest deal they can. These guys lose most of their interest the second you sign the term sheet. It comes down to what you and your company need. Need a connector who will raise your company’s profile? Find an aspiring celebrity super-angel. Need help getting your business model’s math to balance? A savvy former CPA and tax attorney will show you the way. Need a mentor who will help you take it up a notch by joining you in the trenches? Find a serial entrepreneur who just came off an exit and is bored with being on vacation. Ultimately, the best investors are the ones that have a balanced blend of Fortune, Fame, and Fun. The guys that are smart about their money, are well connected and respected, will grab a beer with you to chat about how they can help (and then actually follow through), and that realize there is inherent risk to what they’re doing with their money. Dated references aside, this is still good stuff. (Source: startupped, via startupped) Tweet Permalink • 4 notes • View comments

Adventures in Office Hours



Over the last four months, I’ve taken four afternoons to schedule office hours with six 30 minute meeting slots available to be booked by anyone.

Why would someone take an afternoon each month to meet with random people who likely won’t provide a tangible return on the time invested? Great question, let’s explore what I’ve learned and how you can benefit from doing the same.

Meet new people When meeting people for the first time, it’s easy to let the 15-30 minute appointment run by with “get to know you” chatter. This is not necessarily a negative thing. Just getting to know the person might be the start of a longer relationship that will have unknown benefit. Of all my bookings, I met 18 new people. I’ve stayed in contact with 8+ and expect to continue that trend as possible. Gather data, see trends You don’t know what you don’t know. This became clear over my last few chats over coffee as 5 of 9 meetings involved the question “SHOULD I raise money?” instead of the Midwestern perennial “HOW do I raise money?” This is an interesting and unexpected trend that I wouldn’t have seen had I not taken the meetings. Cross pollinate In Cleveland, we have a siloing issue. Whether geography, accelerator, or social circle, entrepreneurs just don’t talk to each other. For people that enjoy being catalysts (me), office hours can be an incredible opportunity to bridge these gaps and weave a fabric between networks. Get to work Rarely, your appointments will be do their research and be prepared to leverage your skills and input from the get go. Don’t shy away from getting into the weeds and helping out if you have time. Recently, I had someone who knew I enjoy making pitch decks and came ready to work on theirs. We got through the whole thing and made it tighter and more cohesive while getting to know each other as we went. Tons of fun! Success in scheduling office hours is undefinable, but you can maximize the outcomes by following a few guidelines: Establish a cadence Whether they’re monthly, quarterly, or weekly, stick to a defined cadence in order to provide predictability to potential attendees. They might not be able to make this go round, but if they know the next slots are in a month they can book up now or save the date. Make booking (and cancelling) easy Use a booking tool that doesn’t require your interaction to approve or confirm the meetings. I use youcanbook.me, but others use calend.ly or just good ol’ Google Cal. The less you need to do, the better. Make sure they know when/where/how they’re meeting you, and set expectations in the comms that go out automatically. Allow people to cancel just as easily as they book. A booked slot where no one shows up is bad for your morale and just downright disrespectful. If they can cancel, at least you can minimize that situation. Neutral territory I’ve used one centrally located coffee shop (shoutout to Gypsy Bean Baking Co) for all of my office days. “Over coffee” is my preferred way to meet and the social nature of the situation really helps to keep things light and friendly. A neutral location avoids having random people coming into your office, eliminates the intimidation of booking a meeting with someone on their home turf, and lets you have a way to end the meeting early if need be. Don’t overdo it For me, six 30 minute slots is the most I can do without starting to drag. You might be able to slot a break in there and make it a bit easier. Don’t schedule too much, you won’t enjoy it and it won’t be productive. Embrace weird and expect unsolicited pitches You can’t filter out weird. It’ll show up. It’ll run over time. It’ll follow up, repeatedly, and with zero regard for your lack of interest. Just be prepared to deal with it graciously. If you are an investor or are in a position to influence an investment or grant decision, expect to get pitched… HARD. You’re probably used to this, but be prepared to have crazy ideas tossed in your general direction and an expectation that you’ll be interested. Famously, Techstars got its start with David Cohen pitching Brad Feld on the concept during one of his Random Days. Fred Wilson does them. Chris Dixon does. Josh Kopelman. YC’s team… The idea isn’t new. The format works. While I am not an active investor, I’d like to think that I can bring value to my peers by imparting the lessons I’ve learned over 18 years of startup life. I expect to continue doing office hours, and welcome anyone who would like to schedule up for my next ones! [eboh.youcanbook.me]

Hopefully this convinces you that office hours can be a worthwhile tool to expand your network and help your fellow entrepreneurs. I challenge you to give it a try and I’ll happily be the first to book a time and buy you coffee. Tweet Permalink • View comments

Top 5 ways that the Cleveland startup scene can alter our positioning of the city for the better



1. Kill “Rust”

Once, the “Rust Belt” was called the “Steel Belt” (or so I hear). This moniker, like Akron being called the “Rubber Capital”, was a proudly accepted label for an area that saw unprecedented economic growth driven by industry. “Rust Belt” was popularized in the 80’s as a way to wrap an idiom around the decline of the US steel industry and the associated regional decline that followed. It’s not a badge of honor, it’s reference to our failure to maintain a modern economy. 2. Stop Playing the Underdog

I don’t know if it’s some kind of Cleveland sports team complex or a general Midwestern quirk, but we consistently view and message ourselves as the underdogs. This is not some sports league with standings that we’re behind on. We don’t have to beat San Francisco on talent acquisition, or out grow Boulder in new funding, we just need to build/maintain a great and tightly knit culture that facilitates relationships and makes people feel like family. There is no rising to do, no changing of hearts and minds to accomplish, no “it’s getting better” to talk about. We are a proud and industrious city populated by intelligent, friendly, and helpful individuals. We have great cultural, geographic, economic, and philosophical qualities that speak for themselves. Be proud. When faced with snide comments about burning rivers and brain drain, use that thirty seconds as an opportunity to educate on something great about the area. Don’t let the conversation be ruled by a certain basketball player’s return. Change their bias.



3. Recognize Incentives that Matter

If I’m deciding where to locate my business (which I am), continually being told how “its getting better" is not the message I want to hear. I want to hear: “low cost of living”, “A+ talent availability”, “startup friendly”, “tax incentives”, “payroll tax rebates”, “access to mentorship”, “access to funding”, “no seriously, access to funding”. 4. Realize that Talent Follows Opportunity

It’s a classic two-sided marketplace issue, how do you get A+ talent if you don’t have A+ opportunities for them to fill? How do you get great companies into the area without the talent? Short answer? Someone has to take a risk. The A+ developer moves home to raise a family, the startup returning from an out of state accelerator flush with cash starts to hire top tier talent (email resumes to resumes@expensebot.com), the Fortune 500 decides to modernize and grow staff. There are catalysts and we need to facilitate and embrace them. 5. Stop Being Humble, Dammit

While a positive trait in most cases, humility has a way of diminishing our achievements. Stop it. Celebrate victories big and small. When something is going right, we need to tell the world. We need more press, more buzz, more excitement. There were several $XXXm transactions in the Cleveland area recently and most people I talked to *locally* had no idea. Do you think people outside the CLE area are going to know if we don’t? We’re bad at making noise for ourselves, and even worse at spreading the word on good news from others. Social media, blogs, newspapers, magazines, podcasts, whatever is takes. Get it done Cleveland. Tweet Permalink • View comments

Remembering the good days at Techstars Boulder 2014. Months surrounded by smart motivated people all building something they love. Conditions that are nearly impossible to reproduce in Ohio. Tweet Permalink • View comments