Author Archives: steve

Everything Old is New Again

While the great recession was ugly for most, it did have a silver lining. Amidst a society where the institution of marriage is in the decline, the divorce rate surprisingly decreased during the great recession. When times got hard, marriages buckled down because they could not afford to get divorced. The risks of failing were higher, thus more work was required to keep marriages alive.

Coming out of the recession, our nation rediscovered a part of its character long-forgotten in the recent decades of prosperity. The trend of “fixing” is making a comeback. Believe it or not, there was a time when people fixed things that were broken, but at some point, it became easier and cheaper to just start over or buy new.

Relearning how to tough-out the rough times applied to the business world as well. While money never really grew on trees, pre-great recession companies certainly acted like it! Today we are seeing more and more companies bootstrapping and cutting lavish or unnecessary expenses. In fact, investors are now demanding this characteristic in companies and companies are responding with more fiscally-responsible business plans.

While the partners at Tech-Rx are natural-born fixers, die-hards and visionaries, this culture is beginning to spread throughout the industry. Companies now have an alternative to failure. Founders no longer have to throw away their hard work and precious time because they can now turn to micro private equity as an option to fix or save their company. As the Bare Naked Ladies eloquently put it, “Learn to lose, it’s easier that way.”

Micro private equity has been a long time coming and there hasn’t been this option for early-stage companies. Now there is. Hopefully with our arrival, and with others surely to follow, more innovative companies and technologies can be saved.

-Steve Hogan, Managing Partner, Tech-Rx

 

“Failure” Culture

“My great concern is not whether you have failed, but whether you are content with your failure.”

-Abraham Lincoln

Last week, Erika Hall from Wired magazine wrote an article that was well overdue. In the article, Erika discusses how the failure culture among startups is killing innovation. The article continues on and points out that some founders are treating their failed startups as research. The majority of the piece is focused on proper research, but we wanted to take a moment to focus in on failure culture.

Failure is not a badge of honor.

Trying hard is a badge of honor; admitting that you failed is a badge of honor; learning from your failures is a badge of honor; the fact that you failed is not. If you fail, you might as well use your failures as a learning experience, but here is something better, don’t plan on failing! Just because a failure can be spun into something positive does not mean it is okay. As Mr. Lincoln is quoted above, it is not whether you failed but if you are content with your failure. We are seeing more and more contentment with failure in today’s ecosystem, and as the article points out, we are seeing more and more planned failures – which is even worse.

Innovation doesn’t breed from meritocracy.

This ‘failure’ culture is dangerous. Not only is time, money and energy wasted but important innovations become buried. This is the type of thing that makes our skin crawl. Every company failure as a tragedy. The lost opportunities being brushed to the side are a complete waste, and while there may have been a lesson learned, there has to be a loser. Losing investors. Losing employees. Losing economy. Losing society.

Let us do ourselves a favor and do everything in our power to ensure success, else we risk a backwards society that embraces meritocracy and is void of the innovation that lead us to the successes of today.

– Steve Hogan, Managing Partner, Tech-Rx

Where’s the Next Silicon Valley?

Israel, Copenhagen, New York — the list goes on and on! While forecasting the location of the next Silicon Valley is becoming quite the fad, we argue it is a fruitless endeavor to make such forecasts. What Makes Silicon Valley Unique The ingredients that make Silicon Valley so unique to Silicon Valley are impossible to replicate. Most notoriously is the culture. Silicon Valley’s culture is most known for it’s eternal optimism, innovative vision, relentless drive and a flair to risk it all. Without a complementary ecosystem to support this unparalleled culture, none of the technological innovations that hailed from the area would have been possible. Silicon Valley’s Replacement is Online As our convergence with the Internet continues, it is becoming easier and easier to create communities online. While it may be difficult to replicate Silicon Valley in physical locations around the world, it may be more successful to do so online. With the emergence of complex and easy to use collaboration tools and the ability to create and find community online, it is more feasible to for like-minded individuals to find each and work together on creating something new. 10 High-Tech Hot Spots If you don’t care about the unique characteristics that make Silicon Valley irreplaceable and you’d just like to know where you will find the next hubbub of tech, we understand. In fact, it makes more sense to pontificate where are the strongest tech hotspots will be situated. Below is the list you are looking for:
  • Washington, D.C.
  • Riverside, CA
  • San Antonio, TX
  • Baltimore, MD
  • Raleigh, NC
  • Las Vegas, NV
  • Salt Lake City, UT
  • Houston, TX
  • Seattle, WA
  • Jacksonville, FL
We even found this neat infographic here for additional high-tech hot spots. Note that we stayed domestic in our list, but would love to hear your thoughts on international high-tech hot spots — Israel, London, Bangalore, etc. What are your thoughts on the “Next Silicon Valley”? Any other high-tech hot spots that you see on the horizon? -Nikki Griggs, Business and Marketing Associate, Tech-Rx

The Price of Success

“Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty…”

Theodore Roosevelt

If you were to read nothing past this first sentence, at least walk away with this: success takes hard work, sacrifice and dedication.

While pain may not be a requirement to doing certain things, we do agree that success should be difficult to achieve and should require some effort. This extends to building a company. In fact, it is amplified by building a company! Yet, for some unknown reason, people sometimes forget this.

Consider this blog post as a reminder. Building a company is not easy; otherwise everyone would be doing it. If your company is struggling, you should be too. You should be doing everything in your power to achieve success. Whether that means eating ramen for a whole month, downsizing the size of your staff or clocking in extra hours. We want to see you work!

Success takes sacrifices. While we aren’t advocating throwing away your personal life for the sake of business, we recommend seriously evaluating your priorities.

 -Steve Hogan, Managing Partner, Tech-Rx

AngelList Fires Back On SEC

You may have noticed AngelList’s call to action against the latest SEC JOBS Act ruling. AngelList agrees with our initial assessment of the ruling but read on for their deeper analysis of how the law will affect startups. AngelList proposes that the JOBS Act will defeat their original goal of public fundraising for startups. Reason being that the new rules will be so difficult to follow that startups will solely raise money privately. And with so many startups fundraising privately, they are lowering their chances of raising any money at all. Or they could always find the cash somewhere that is not tracked by the SEC, but does it really need to get to that point? We agree with AngelList that the JOBS Act will result in unintended consequence such as spelling out the failure of thousands of startups – as a result, further stunting American job growth. We agree that what is called for in the JOBS Act is simply unfeasible. We agree with AngelList’s proposed ideas on how to go about investment tracking. The SEC is looking for feedback on potential consequences of their proposed rules. Share your opinion now as there are only 9 days left to comment! What do you think could be possible negative consequences as a result of the JOBS Act? Share your comments here. -Nikki Griggs, Business and Marketing Associate, Tech-Rx

Pivot Du Jour

Unless you are perfect, or a psychic, a pivot is a necessity of business. Let’s face it. Things happen. Whether it be marketing to the wrong customer base, adjusting the revenue model or reacting to a new competitor; businesses need to pivot. While it is essential to pivot from time to time; it is hazardous for companies to fall into the rookie mistake of the Pivot Du Jour. The Pivot Du Jour, which translates to the Pivot of the Day, can kill your business. There is a certain art to a pivot. Most of the time, it is not accomplished easily. Pivoting solves one issue but tends to open a Pandora’s box of new problems. Now if a company were to continue on this path of pivoting every time they ran into a problem, not only would they have new issue after new issue, but they would never get anything done! In fact, when a company is turning to the pivot as a solution too often, it may bring to question the execution abilities of the team. At the end of the day, it is about accomplishments to move the company forward. While a pivot is movement, it is horizontal rather than forward. Success takes time and perseverance. While we think it is necessary to change direction when plans are not panning out, we recommend staying grounded in experience and vision. Effective pivoting is a shift in strategy, not a change of vision. In essence, learn from the past while looking toward the future. What do you think about the impact and necessity of the pivot? Even better, do you know anyone suffering from Pivot Du Jour? – Nikki Griggs, Business and Marketing Associate, Tech-Rx

Join our Team!

We are looking for two new team members to join us at Tech-Rx! If you know anyone who you think would be a good fit as a Managing Partner or a Business Analyst, send them our way.

While Steve is the current Managing Partner, we are looking for an additional Managing Partner to help run the organization.  Think of this position as the “number two” role at Tech-Rx.  As a key executive in an early-stage startup, buying into our vision here at Tech-Rx is key. Know someone with a keen understanding of the startup world from a business, finance, and strategy perspective? We would love to chat with them about Tech-Rx.

The Business Analyst position offers a one-of-a-kind opportunity to explore the startup world from a business, finance, and strategy perspective. It is a great opportunity to build experience as Tech-Rx provides deep exposure to what actually has and has not worked for companies – not just their lofty hopes and aspirations.

We are always interested in hearing from those that share our vision that “All innovations, big and small, propel society forward” and our mission “To boost the rate of innovation by rescuing endangered technology.” -Nikki Griggs, Business and Marketing Associate, Tech-Rx  

It's not B2B, it's not B2C, the problem is it's G2G

We look at a lot of early-stage mobile and internet companies.

Companies with really cool technology. Companies with really cool technology and lots of users. Companies with really cool technology and lots of users, that are failing. Companies with really cool technology and lots of users, that are failing and almost out of money. Companies with really cool technology and lots of users, that are failing and almost out of money……

because none of their users will pay for their product!  

These entrepreneurs tell us “that’s because we focused on B2C aka. the “consumer market” when we should have been focused on B2B aka the “business market,” or vice versa. or whatever.  On closer examination we find that, besides adopting the Freemicide model, in itself a death-wish, they have unknowingly, or perhaps naively, focused on G2G –  the Geek-to-Geek Market.  Their MLVP (Minimum Less-than-Viable Product), rather than attracting legions from their intended target market, has instead found a flock of interested early-adopters (Geeks) who will put up with almost any kind of roadblock or pothole to try a product.  Many of them become faithful users (while not paying a dime for the service).  Soon growth slows and stops and the founders decide that “if we shift our focus on the {fill in the blank} market, we can charge money (almost always deciding on $9.95 per month) and will most certainly succeed.”  They “pivot,” trying to sell their G2G product in the B2C marketplace, burning precious time and money, and producing dismal results.  The simple truth is that their current product is simply too-geeky for the average user to adopt.

There have been online storage providers since prehistoric times (the mid-90s).  Yet none of them were very successful and most have died a painful death – painful for them and also for their G users.  Along comes Dropbox which, in a very short time, dominates the consumer (and small business) on-line storage business.  Why? Because, while they recognized the value of G users, they also understood that the population of G users is relatively small.  They focused their efforts on a larger market – every web user in the universe – and built their product so that it was simple enough that anyone who could fog a mirror and could log on to the web was able use their service. They beat the odds of their freemium model, garnering a gazillion users, enough of whom wanted the paid version for them to succeed — all because they did not focus on the G2G market.

Moral:  Don’t decide that you are wildly successful because you have x thousands of users.  You might have captured 100% of the (non-paying) G market.  Instead, focus on a much larger market – C and/or B – and make your product sufficiently simple to use that anyone can buy it and use it.  Recognize G2G for what it is – simply a data point on your path to success and not an end in itself.

— Steve Hogan