Earnest Shackleton had a problem.

He was organizing an expedition to the South Pole and he needed a crew for his ship the Endurance. His goal was to land on the Antarctic continent and become the first to cross it.

(He named his endeavor the Imperial Trans-Antarctic Expedition and December 5, 1914, Sir Ernest Shackleton and 27 men under his command sailed from South Georgia Island in the South Atlantic aboard the Endurance.)

He had a starup, and he needed a team.

Shackleton could have tried to sell potential hires but he didn't. He needed to have his team self-select for the troubled times, not the good ones. He had a fair amount going for him in that he was an know explorer and had some name recognition.

He ran the following ad in the Times and according to the story, he was inundated with applications.

"Men wanted for hazardous journey. Small wages. Bitter cold. Long months of winter. Constant danger. Safe return doubtful. Honour and recognition in case of success."

Startups are not for everyone.

Having just joined Sendside Networks, I was at a baseball game Saturday when my Sister in LA called. During the conversation, we talked about Sendside and it got me thinking about why I would join a company where we would need a astronomically huge exit to make it a good financial decision when you factor in the income and opportunities I'll be loosing by just running my own businesses. (It made me wonder if one of the horses had kicked me in the head and I just couldn't remember it.)

So since my income may be dropping dramatically, I've been thinking why I'd join a startup. Here's what I find attractive:

It's a big idea: I see lots of deals that the entrepreneur thinks is big but really aren't. (That's not to say that they're not good businesses) World domination is always the goal and building an entirely new communications platform that could conceivably replace email is about as big as ideas get. Those are the kind of ideas I'm attracted to.

I like William, Geoff and the rest of the team: I've know William Borghetti for two years or so. When I decide to invite some people I knew to start a group of Park City Angels, William was at the top of the list. If you're going to work with someone in this kind of environment, you'd better like and respect them. I also like Geoff, Dave, Charlie, Calvin and everyone else I've met who's involved.

It's a challenge that fits my skill set: I have a low tolerance for stasis. Startups are an opportunity to move in a lot of directions at once and get things done.

It's green: The possibility that we may have a positive effect on the environment's not lost on me. Having spent some time trying to save Polar Bears I have a soft spot for hugging trees and smiling kids.

I'm choosing opportunity over security: I just don't understand anyone who actually want's a job. The first summer in college I had a job in a chemical factory. Some of the guys I worked with just wanted to have a job, a nice truck, and keep putting more chrome on it. I just don't get that. Give me the ability to make fresh tracks every time.

It's a door: If Sendside builds into a tenth of it's potential there will be plenty of other opportunities.

It's odd to me that most people don't make decision on these types of criteria. They'd like to, but they don't. They continually choose what they think is security. But the truth is that there isn't any security. People coming out of college today will change careers on average four time over their working lives.

There never is any real security. And there never will be. 

Look at these two options:

Option 1: $100,000 salary and 50,000 options
Option 2:   $80,000 salary and 80,000 options

The real decision is this: Is the extra $20,000 a year (a total of $80,000 over a four year vesting period) a better deal than an extra 30,000 options that may be worth a total of $1,000,000. (Insert any amount)  So it's a question of a relatively safe $80k (if you're not fired which you may well be) vs a potential $1m. Is that even a question? In my mind it's not. Even if you only make $300,000 in the options it's a better deal. (Of course there's a risk that it's going to be worth nothing.)

But it's far more common to take the extra $20k.

If you'd take the $20k you're looking for a job. Shackleton would have left you on the dock.

I'm charting a new course and leaving the realm of being entirely my own boss in order to join a team.

I've decided to join Sendside Networks. (The consumer facing part of Sendside is at Sendside.com)

Why? There are a number of reasons but in short it comes down to choosing opportunity over security. It's a character flaw. I can't help it. Since world domination's always the goal I just can't afford to be risk adverse.

This blog may well become more active since there are a number of new items of interest, the Park City Angels Group as well as Sendside. Fight Club is going to become a lot more active again as well.

Don Dodge has written a post about the ten Techstar startups that have just launched.

 
EventVue - Social networking for conferences and trade shows. Works like Facebook for conferences, complete with pictures, bios, and contact info. Allows attendees to find each other and network during and after the conference. EventVue gets an affiliate fee for each new conference registration. EventVue is already in use at several conferences. You can see it in use on Brad Feld's blog. Competes with eXtreme Networking and IntroNetworks. Seeking $150K to continue product development.

IntenseDebate - A blog widget that provides threading and organization to comments. It includes a reputation ranking system, moderation tools, usage statistics, and user/topic tracking across multiple blogs. RSS feeds for comment threads or individual users. Supports WordPress, Typepad, and Blogger. Ad revenue model and up sell to premium services. Currently in use on 30 blogs, 500 more have signed up for beta. Seeking $500K.

SocialThing - A consolidated profile page for all your digital content; blogs, photos, music, friends, social networks, and links. Synchronize all your friends on all your social networks, from one profile page. Post pictures or other content once and have them appear on any of your social network sites. SocialThing is also a development platform for multiple social networks. Ad revenue model. Viral distribution through networks, and branded widgets. Seeking $500K.

StickyNotes - A post-it-note type app for Facebook. One of the top 30 Facebook apps. Over 1,700,000 users signed up in just six weeks, and have sent over 4M StickyNotes to date. They are working on several other Facebook apps in related areas. Cost Per Action advertising generating $30K per month. They will also use CPM and CPC in the future. Two developers, cash flow positive, not seeking funding at this time.

Search-To-Phone - Find local products and services by calling Search To Phone. Leave a voice mail asking about a product or service. The request is then routed to relevant local businesses, who respond back to you with information or an offer. SearchToPhone uses Microsoft's TellMe and Gold Systems technologies for voice recognition. They have just signed a deal with Excell Services to process 10 million calls. Ready to launch, looking for more partners, and a small investment.

Villij - A people recommendation engine that analyzes your online content, blogs, and bookmarks to find people of similar interests. When you register for Villij you are presented with a list of social networks, blogs, and websites. You check off the sites you use. Your profile on these sites is compared to other members to find profiles of people like you. Advertising and subscription model. Seeking $500K.

MadKast - A new way to share (push) blog posts with friends. It is a widget that can be placed on a blog to allow readers to send the blog post via email, mobile MMS, or social bookmarking networks, to friends in their network. MadKast also has a widget distribution network for other widgets, and they are working on a blog analytics service. Currently in use on 350 blogs, including Brad Feld, and mine. See the green MadKast icon next to the title of this post. Advertising revenue share model, split with bloggers, They will also charge a premium for the analytics package. Seeking $300K.

FiltrBox - A content filtering service that finds relevant content (blogs, news sites, and other web sites) and delivers it to you via RSS, email, and text messaging. Filtrbox uses topics, keywords, and context to rank relevant content.  There are sliders to adjust the sensitivity or depth of information to filter and retrieve. There is a "thumbs up / thumbs down" voting system to help refine your filter. The system learns what you like. Seeking $500K.

KBLabs - Developers of Facebook apps and widgets. They launched their first application (Wah! Cool) 4 weeks ago. They already have 100,000 users and 1.5 million page views per week. They have built several other apps called Post Secrets, Motivate Me, and Track Bot. Each of these apps has more than 4,000 users and is growing over 100% per week. Advertising model. Not currently seeking funding. KBLabs founders are going back to college this Fall, but will do consulting projects building Facebook apps.

BrightKite - Location Based Notifications via email, IM or SMS. The notifications are all about location or what they call "place-streaming". Streaming content about a "place" from a "place".  Alerts you when friends are nearby, or about great deals at nearby businesses, movie listings, etc. It could be used for conferences, events, bars, parties, or public places. BrightKite is also a platform for other location based apps from third party developers. Advertising model. Seeking $500K.

Moneys 25 startups to watch.

LogoWorks in Lindon is on the list? Go figure. I gave'em a try... once.

From the story:  This year's field is chockablock with "me too" companies, and the bar for startups has been set even higher, in terms of both what customers expect and the kind of return on their investments the angels and venture capitalists want to see.

25 startups to watch

This means that, for many, 2007 is going to be a make-or-break year. "There has been enough time now to determine if there is something there," says David Hornik, a partner with August Capital and an Internet startup specialist. "For a lot of companies, the answer will be no." (Hence the rise of F---edCompany 2.0 sites like TechCrunch's DeadPool and Valleywag's Deathwatch.)

It seems that Funding Universe has made friends with Colorado Startups.

From Jeff Jordon: The event will be a variation on the Speedpitching luncheons we've held in Florida, Texas, California and Phoenix. It will be open to the public and anyone who has an business idea that wants to get feedback from a panel of real investors. There will also be some new crowd participation elements that will allow everyone in the room to "invest" in the ideas that they like the most.

 Excellent. Now we just need to bring come of that Colorado Startup pollen over here. It's not that far after all.

TechStars received a nice leg up from TechCrunch.

In reading the TechCruch thread I was struck by a couple of thoughts while I was reading the post and the comments.

1. Novice entrepreneurs are extremely easy to spot. They talk about ideas as having intrinsic values in the millions and they're extremely covert and suspicious that everyone will steal their idea.
2. TechStars seem to have nothing but good intentions.
3. I wish there were more adopters of this kind of setup.
   

 
I'm going to give this some more thought. Perhaps I'll see if the TechStar Guru's will let me fly/drive out for a weekend and make friends?

Boulder Colorado has a new startup program: Techstars 

Techstars (ala Y-Combinator) is a invitation program where your startup team moves to Boulder for the summer, gets 5k per founder, and works your tail off. Evidently boulder has a thriving tech startup community where everyone runs around with their Macbook Pro and meets at Starbucks.(Damn that sounds fun. I'm going to have to talk to my wife and see if she'd let me go. She could just ride the horses all summer.)  I'm not really kidding either.

The program functions along the line of Junto Partners but I actually think there's more upside for the entrepreneur and the team. Techstars is looking for a 5% stake. 

Here's a video of the Techstar instigators making their pitch.

Noam Wasserman, professor in the Entrepreneurial Management unit at Harvard Business School, has the best actual diagnosis of startup founding problems around. (At least that I can find.) Best of all, he makes sense and shows his empirical data.

Equity-Split Results, Part 1: When Do Teams Split Equally?

The table below summarizes how these factors tended to increase versus decrease the chances that the equity would be split equally.

Interestingly, the prior relationships among the founders (friends vs. co-workers vs. strangers) did not have any significant effects on the equality of the split in either direction, either because they are non-factors, or because they include conflicting effects that largely cancel each other out.

Equity-Split Results, Part 2: Implications for Team Stability

The table below shows the major factors that had statistically significant effects (at the p<.05 level or better) on team stability (defined as whether all founders were still working or not) at each 6-month milestone, with a "+" showing a significant positive effect on team stability and a "-" showing a significant negative effect on team stability.

998 founders from 326 multi-founder technology ventures.

In non-table form, the results are as follows:

1. When the team invested the same amount of financial capital at founding, the team tended to be more stable throughout the 2 years.
2. When the team had a heterogeneous (i.e., widely differing) amount of prior work experience, the team tended to be less stable for the first 12 months, after which the effect became insignificant.
3. When the team split the equity equally, it tended to be more stable throughout the 2 years.

However, this last result (#3 above) is counter-balanced by two factors:

• Teams that split the equity equally and raised a round of outside financing during a period tended to be much less stable in that period, any time during the first 2 years. (In its magnitude, this effect completely washed out the positive effect from #3 above.)
• Teams that had been friends before founding and split the equity equally tended to be less stable for the first 6 months, after which the effect was insignificant.

The Sweet Spot for Buying

 
Some people love the charts and graphs. They're helpful in thinking about the business you're in and how you're going to design your product offerings. I actually use a number of these same thoughts in designing medical service businesses and teach them to doctors (who also love to cram in the kitchen sink).  I would guess that the actual sweet spot moves over time.

Via: LukeW

In response to my Sweet Spot on the Curve article, Klaus Kaasgaard, Yahoo! Director of User Experience Research, pointed me toward a Harvard Business Review article titled Defeating Feature Fatigue that highlighted some additional considerations for determining the feature curve sweet spot. To paraphrase Klaus:

“Before using a product, people will judge its desirability and quality based on ‘what it does’ (i.e. the number of features). Even though they may be aware that usability is likely to suffer, they will mostly choose products with many features. After having used these products however, usability will start to matter more than features and people will choose easy-to-use products over products with many features. The dilemma is that in order to maximize initial sales one needs to build products with many features, products that do lots of “stuff”. But in order to maximize repeat sales, customer satisfaction and retention one needs to prioritize ease-of-use over features.”

Barry Schwartz echoed this situation in his talk at User Interface 11 when he articulated the capability vs. usability tension inherent in decision-making. In a test Barry referenced, participants preferred to have CD players with 21 features to ones with 7. But if they first used the 21-feature player for a while, they preferred the 7-feature one.

Strive for Elegance, Not Simplicity

“Simplicity is a myth whose time has past, if it ever existed.” Thus claims Don Norman in a new article for Interactions magazine. Joel Splosky concurrs, noting

Making simple, 20% products is an excellent bootstrapping strategy because you can create them with limited resources and build an audience. It’s a Judo strategy, using your weakness as a strength, like the way the Blair Witch Project, filmed by kids with no money at all, used the only camera they could afford, a handheld video camera, but they invented a plot in which that was actually a virtue. So you sell “simple” as if it were this wonderful thing, when, coincidentally, it’s the only thing you have the resources to produce. Happy coincidence, that’s all, but it really is wonderful.