My Interview at TigerStartups

TigerStartups is an up and coming tech blog that focuses on "Asians in Technology." The founder, Peter Shen, was nice enough to interview me for their "hot seat" segment.

In The Hotseat With Bernard Moon, Founder Of SparkLabs And VidQuik

Recently, Bernard Moon graciously took some of his busy time to talk with us and be part of our Hotseat segment. Bernard is a serial entrepreneur, who has left footprints from Chicago to San Francisco and as far as South Korea. His latest ventures are VidQuik and SparkLabs, which he talks more about in depth below. Previously, he was Managing Director of the Lunsford Group, which is a private investment firm consisting of entities in technology, healthcare, and real estate. He was Co-founder and VP of Business Development at GoingOn Networks, a social media platform for companies. He is a mentor for Mucker Lab, a startup accelerator based in LA. Bernard is also a prolific blogger and is a frequent guest writer to various technology journals, such as VentureBeat, Mashable, TechCrunch and ReadWriteWeb. His latest blog in VentureBeat is titled “4 signs that your startup is ready to pivot.”

Now in the hotseat, Bernard Moon.

Can you tell us more about Vidquik, your video conferencing startup? Such as what phase of the project the startup is in and what can we look forward to in the near future?

Vidquik is seeking to provide companies with a flexible and powerful web conferencing platform for their websites. While not for every industry, we allow our users, such as e-commerce sites and sales organizations, to replace their text chat or phone interactions with video engagement. Vidquik allows you to easily embed our platform into any website and allow customers to interact with your customer service or sales representatives. We have a powerful intelligent routing system that directs your customers to the appropriate representative by tags. So our users can tag a call center "seat" or sales team "seat" based on geography, product line and other factors.

We will be launching some pilot tests soon with a few clients and have been in a long beta development period, which we hope to get out of soon. If you visit our website, we don't have our core product displayed since we planned to show it after a few pilot tests.

We did a blog article about SparkLabs inaugurating its first class of startups, tell us how it is going and what you hope to accomplish with SparkLabs?

SparkLabs is a fun side project for me. It's always rewarding to help out other entrepreneurs. The first class was selected with some good buzz and it's been great engaging with these first six companies. It's an awesome group of passionate, incredibly talented and intelligent entrepreneurs.

HanJoo, Jimmy and I really wanted to help grow the startup ecosystem in Korea and help put Korean entrepreneurs on the map. This means helping Korean startups go global and effectively penetrate new markets outside of Korea. We recently add two general partners, Jay and Awy, that will help with market entry and growth strategies for our companies into Southeast Asia and China.

You have been a dedicated entrepreneur here in the states but you have been in touch with the entrepreneurs in Korea as well as investments there. Tell me why it is important for you to keep a connection over in Korea vs focusing solely here in the states?

There wasn't any conscious decision on such activities, it is simply part of who I am. I have many friends in Korea and Asia, and I come from a large family where most of them reside in Korea. Though I am American, if I have something to offer and help any entrepreneur whether in Korea or elsewhere, I would do it. But strategically, starting SparkLabs made sense because of my various connections to Korea.

Besides being an entrepreneur, you seem to enjoy your role as an adviser and mentor. Can you tell me why do you feel strongly about doing this role?

Some of this I already described, but part of this comes from my first startup experience, which was actually with Jimmy Kim, my co-founder of SparkLabs. We suffered, learned everything on the fly, begged our parents for money, accumulated credit card debt and faced rejection over a hundred times. We loved and appreciated our first startup experience, but we also decided if we could help others suffer through a shorter path that we would do it.

You are already a successful entrepreneur but let's say in 5 years, you have more than achieved every goal you set to accomplish. What do you hope to give back to the community that brought you to that point?

I wouldn't say that I'm successful. I still haven't hit a home run. Just a single, a double and waiting on a couple at-bats. Even if I exit Vidquik successfully, I will be back at it right away. Financial success has always been secondary for me. I simply love the whole process of building a new company. Taking a concept on a napkin, building the product, building the partnerships, hiring people, and all the uncertainties of startup life.

Anyway, regardless of how Vidquik turns out, I will go at it again at least a couple more times. Regarding my community activities, that's always been a part of my life. If you can't balance your life between your professional goals and giving your time to various causes, it might be difficult to do so in a whole-hearted manner when you have more time. I believe it's better to make such commitments early in your life whether it's a nonprofit, religious organization, or some cause. I will say once we had kids, I had to step down from a couple nonprofit boards because that's a whole other level of time and commitment.

You grew up in the Chicago suburbs but now live in San Francisco. Tell us what do you miss about Chicago?

Food. I missed hearty food and steaks. Also the diversity of foods that you would only get in NYC or Chicago. My wife and I sometimes miss the "big city" culture that only NYC and Chicago provides. The shows, museums, big park festivals, etc. San Francisco is great for a small city. It's a city of character, which is similar to Chicago.

Qik Founder’s Story: Taking Mobile Video Out Of The Garage And Putting It Into The Hands Of Skype

Finally getting to reposting my TechCrunch article here...

"Qik Founder’s Story: Taking Mobile Video Out Of The Garage And Putting It Into The Hands Of Skype"

Interviewed by Andrew Keen at TechCrunch TV

I was recently interviewed by TechCrunch's Andrew Keen discussing my startup, Vidquik. I didn't sound too bad for having two plastic tubes up my nose and on painkillers (two days after my septoplasty). Just a mix of Kermit and Darth Vader :)

"Keen On… Vidquik: Why Real-Time Online Video Is Now Ready For Prime-Time"

Shit Entrepreneurs Say

Amusing short by Mohammad Gorjestani and friends.

How to Create an Early Stage Pitch Deck

How to Create an Early Stage Pitch Deck

View more presentations from Ryan Spoon

"The Next 10 Years Will Be Great For Both Founders And VCs"

Great post that deserves a dedicated link here and a reposting of William's slides:

"The Next 10 Years Will Be Great For Both Founders And VCs" TechCrunch, William Quigley

QUIGLEY_Report_Final

Twitter Bashing, Is Ev Williams a Jerk?

Last week Twitter was getting a good amount of negative press:

"Trouble @Twitter" Fortune

"The Real History Of Twitter" Business Insider

"EXCLUSIVE: An Interview With Twitter's Forgotten Founder, Noah Glass" Business Insider

After reading these articles, Ev Williams comes off as a power-hungry, ego-maniac that is a bit shady. At a minimum a selfish jerk. You're left wondering if he did really screw over Blogger employees before Google acquired the company, and you're wondering why did he screw over Noah Glass? Also why didn't he and others give credit to Noah Glass? Sadly, he only does so after these articles placed him under the fire.

I've heard from people at Twitter that many like him, but wonder if that's simply a limited sample set or if he's selectively shady. Whatever the truth is, this is just a reminder that you have to be cautious when starting a company with others. Trust is essential and knowing their character is critical too. During the first sign of a fire or potential success, is your co-founder going to throw you under the bus or backstab you? Drink the water before you pour in the Kool-Aid mix.

Startup Weekend San Jose

Starting tomorrow, Startup Weekend San Jose is in Silicon Valley. More info...

April 15-17, 2011
Hotel de Anza
233 West Santa Clara Street San Jose, CA

Startup Weekend is an intense 54 hour event which focuses on building a web or mobile application which could form the basis of a credible business over the course of a weekend. The weekend brings together people with different skillsets - primarily software developers, graphics designers and business people - to build applications and develop a commercial case around them.

When Does It Make Sense to Bootstrap a Start-up?

(Just reposting my article over at InsideWork since I realized I don't have a copy over here :)


I previously described my first startup and bootstrapping experience in a prior post, which was exhilarating, frustrating, rewarding, and depressing all at the same time. Recently, I was posed a related question about “when does it make sense to bootstrap a startup?”

My answer would say that it depends on the industry, who is on your team, and how quickly you need to scale due to market conditions (e.g. competition, policy changes).

First, I would say where you are in life is the primary factor. Are you single versus married? Renting versus having a mortgage? No children versus one child and another on the way? When a person is in their twenties and not married, bootstrapping is much easier since you probably have lower rent costs, no mortgage and can eat ramen noodles all day. Next is probably how much savings you have, how much your family network could help you out, and how much credit card debt you’re willing to take. I remember being a fool, but a giddy fool, and signing up for dozens of credit cards with my co-founder, Jimmy. It was a fun but stressful time, especially when my dad had the “poker talk with me”.

“Bernard, business is like poker, you have to know when to fold…”

Older entrepreneurs can bootstrap too depending on the business and market, how much they are willing to eat into their nest egg, and if their spouse works. From my experience, usually a household with kids does not want to see money going out towards risk investments. Which is why you see even successful entrepreneurs, such as those who cashed out more than several million, still go back to the investor well because their wives clamped down on their bank accounts.

Your targeted industry matters too. Bootstrapping is very difficult if you’re in clean-tech or biotech versus social gaming or social media, so these scenarios aren’t relevant in these sectors since typically cash needs are $20 million, $50 million or greater for just the product development.

There is also a point to which bootstrap can only take you so far. If the competition is fierce and your competitors already have a good war chest or their product is slightly ahead of your features, then outside money makes sense.

If your company is starting to get interest from investors, I would recommend that you go with the momentum and fundraise because most startups are beauty queens (or kings) only once. I’ve seen many startups pass on funding when they were hot only to go back to the well that became dry or venture capitalists had a new flavor of the month.

An ideal scenario to bootstrap is if you’re in your mid-twenties, a stud game developer, and creating a social game with a solid creative partner. Build it, launch it on Facebook, and hope that it goes viral so that you can make money, sell it, or get a higher valuation.

In the end, I would recommend bootstrapping if you can to increase your valuation from investors, but also be aware of the point when it begins to be a drag on your product development and growth.

What Are The Most Common Mistakes First-Time Entrepreneurs Make?

This question was asked over at Quora. Some great insights and answers there, but just posting this one by Greg Tapper:

I've started 5 companies-- several (fortunately) very successful...and a couple painful failures. I've learned far, far more from the failures than the successes.

There's one rule and one rule only to business success: NEVER drop the ball. The "ball" is everything related to the business. A growing business screams like a baby. It never stops asking for your attention. Take your eye off the ball for 1 minute and you'll slip off the treadmill.

Businesses fail because people lose their focus. Look at every successful company, and it all gets back to that. They lost their direction and focus. Success is virtually guaranteed when you're absolutely obsessed and absorbed in the business.

Therefore:
1) Never outsource anything important. Ever. There's no such thing as a brain transplant. You can get a new heart, a new arm-- mechanical things-- but you can't replace the central nervous system.

2) Never trust anyone with anything critical. No one. You have to be the one to take care of it. And don't even trust yourself. Constantly question how you're doing, what you're doing, why you're doing it.

3) Never stop thinking about what can go wrong, because something is always going wrong.

4) Never trust your reports who tell you everything is fine. Nothing is ever fine. Things are always breaking. Things are always going wrong. (We say: "rejoice, things are breaking. We're growing!"). Breaking isn't necessarily a bad thing. Frustrating yes, but not bad. It usually means you're growing.

5) Treat your customers better than your spouse. Take your customers for granted, pay the price. Without customers, your company is a high school science project.

6) Businesses are 100% about cash flow. Cash is king. Never forget that cash is king. Did I mention that cash is king. Guard it jealously until you have an embarrassment of riches. Then let your investors complain that you're not paying a big enough dividend; and then you can ease off the gas. The truth is, nobody cares about your big idea and your cool technology. Not investors, not employees, not your spouse, and not your mother. What they care about is: are you making a lot of money or not? Or, if not, are you clearly on the path to creating such tremendous, protected asset value that one day very soon the business will start kicking off tons of cash. Then your investors and your spouse and your employees and your mother and Inc. Magazine will all shower you with praise and lift you up on their shoulders and go marching out of the room and singing a song about you. Google isn't valuable because it has great technology-- it's because those mofos mint money. And FB is just sitting on a goldmine of active users, so they are highly valuable. But it's about money, and nothing more. (Btw, money is a *measure*, not a goal.)

7) You fail because you let things fail. And at the end of the day you'll blame every person you've ever met for your failure. You'll give 100 reasons why it's their fault. How that employee didn't do his job. How that customer screwed you. How that investor didn't invest when it was really important. How the damn developers just sat on their asses and delivered dog crap to you. Then you'll wake up one night when it's just you sitting there alone, and you'll realize that you're the entrepreneur and you're the only one holding the bag of responsibility. That company is yours, even if you're a 1% equity holder. Employees are as loyal as cats. Investors have lots of other deals going on. Customers always have other options, and they're pretty good about reminding you of that. So at the end of the day, it's just you. You and your company. Because, you see, the company is you. You are the company. You are singular zen being. That's when the lightbulb goes on and you have to be a big boy or big girl and say: "I take absolute and total responsibility for the success or failure of this company. It will succeed in part by me, and I will get partial credit for its success. But it will fail in full by me, and I will take 100% of the responsibility for its failure." Sorry, you only get partial credit, but 100% responsibility.

A metaphor: When I taught rock climbing as an undergraduate at Berkeley, we did big climbs in Yosemite. And it was common wisdom that the people who fall are the ones who let themselves fall. The ones who climb to the top are the ones who persevere every minute and insist their way to the top. They never even let their toe budge an inch. Their fingers cling to the rock, often in pain, invariably bleeding. But they hold on and insist their way to the summit.

Dick Costolo's Lessons Learned

I definitely enjoyed listening to Dick Costolo's talk at Vator Splash. Dick is the recently appointed CEO of TWitter and co-founder and former CEO of Feedburner.

"Twitter CEO Dick Costolo's lessons learned
Costolo, the first keynote speaker at Vator Splash September, shares a few lessons for entrepreneurs"

The complete review is in the link above, but here are the points I appreciated the most:

1. Have a voice

Costolo’s first lesson, which he seemed the most eager to impart, is to create a personality for your company. For example, even though deal-of-the-day sites are the easiest kind to copy and paste, Woot stood out from the rest by having the most funny and raunchiest descriptions of its daily deals. (Costolo recommends reading the Woot CEO’s post after Amazon acquired his company.)...

4. Think long-term

Not thinking about exits, however, doesn’t mean forgetting about the long-term. Relating an example from one of his earliest ventures, Costolo described how his company veered from their six-month business plan because one customer asked for one specific feature and backed up the request with the promise of good money. Though the business managed to make quick profits by pleasing this one customer, they shut out a large group of other potential customers by delaying their original plan three months. The company had traded in their vision for sub-optimal results by thinking in the short-term.

5. Launch late to launch often

Twisting the adage to “launch early and launch often,” Costolo advised that companies be patient with their product, even if that means launching late. Once a solid product is released, then the business can focus on launching updates often.

At the same time, Costolo warned against waiting to dump every single new feature on users, an experience that can be overwhelming. Even worse, waiting for absolute perfection before launching could be disastrous because perfection might never come; receiving feedback is key.

Amazon Web Service Start-Up Challenge 2010

AWS Start-Up Challenge 2010 is running again with a deadline of October 31, 2010. More info here:

The annual Amazon Web Services (AWS) Start-up Challenge is back with an expanded world footprint – start-ups in 22 countries across the Americas, Asia, and Europe can enter to win. This year, we will recognize 5 regional semi-finalists from each of the 3 regions, 6 finalists, and select one global grand prize winner.

The AWS Start-up Challenge is an annual competition designed for young, promising start-ups to get noticed and compete for a chance to win $100,000 in cash and credits. Start-ups that are using the AWS cloud computing platform can submit an application which describes their business plan and their use of AWS.

Co-founder Myth = False Prophesy of Entrepreneurship

I came across a new blog, Founders Block, covering the startup scene in NYC and which aims to be a resource for new, young entrepreneurs. Love their idea and mission.

One of their recent blog posts, "The Co-Founder Myth: Why You Might Not Need One, Especially in NYC", was well thought out and somewhat practical, but I thought it was sending the wrong message to new entrepreneurs in NYC. As discussed in their blog post, I am aware of the lack of technical talent compared with Silicon Valley, but promoting the notion of single founder startups is simply short-changing the potential and probability of success for entrepreneurs. Here is my comment on their blog post:


I believe you're seeding a destructive message here for startups and new entrepreneurs. Sort like teaching a minor league baseball player the wrong hitting stance as he's trying to make it to the bigs. Not's just about saving equity or making things easier in not looking for a co-founder, but trying to increase your chances of success.

There are various studies that have tracked the probability of success of technology startups over the past decades, such as MIT's Edward Roberts. The success rate exponentially jumps from one person to two people, and then continues to increase to three and four people. It's been a while since I read these studies, but I believe it flatlines after 4 founders. How many tech titans do you know that were started by one person? Even mid-sized tech company started by one person?

There is a reason why the recent trend of tech incubators prefer teams of at least two people and why prominent long-time VCs, such as John Doerr, focused on the "team". Some random links related to this:

John Doerr's Startup Manual

Why to Not Not Start a Startup

Ron Conway and Paul Graham startup success data


Related to this is the recent trend of social apps and games being funded versus "bigger ideas" and the growth of angel investing, so I understand in these types of startups multiple founders might not be necessary at the concept stage. This is where I agree with Michael Arrington's gripe about the new investor landscape creating a "culture of shooting too low". Investors are funding some of these one-hit wonders and since many of them are angels smaller exits less than $50 million or even $30 million are considered home runs. What would the technology landscape look like if these same entrepreneurs had bigger visions than creating a water ballon fight on Facebook? Or is this just a whole new category of tech entrepreneurship?

My Interview at Innovatrs Blog

I was recently interview by the Innovatrs Blog on my entrepreneurial experiences. Innovatrs is crowdsourcing platform based in London. They are building a global crowdsourcing platform for entrepreneurs to develop their ideas and connect them to partners and investors.

Anyway, here is the interview, which you can visit directly here or just read below:

Eclipsing The Competition│Bernard Moon: Social & Web Entrepreneur

Bernard Moon is the co-founder and CEO of XS Groupe, and an Innovatrs entrepreneur. He is also the outgoing Managing Director of the Lunsford Group, a private holding company consisting of entities in research and consulting, technology, media, healthcare and real estate.
Bernard has worked in a wide array of senior positions in social media, business and tech companies, including GoingOn Networks, where he was both co-founder and Vice President of Business Development. His work there was recognised by Business Week in their 2007 ’Best of the Web’ list.

What made you do it? Why did you become an entrepreneur?

It was probably seeded from my parents who were consumer retail entrepreneurs. They successfully sold a coffee chain a few years ago, which was their fifth business. Anyway, I was in graduate school at Columbia University studying public policy during the first Internet boom and during my second year two groups of my friends pitched me to join their startup. A fair amount of my friends in investment banking and consulting would call me to bounce off startup ideas, so it was probably inevitable.

Towards the end of graduation, I choose to work on ViewPlus, a video-on-demand platform with my friends Jimmy and Peter. We were thrown into the fire, learned on the fly, and felt like we journeyed to Hades and back a few times. Rejected by investors repeatedly, begged from our parents for support and free food, and signed up for credit cards like they were lottery tickets. It was stressful, fun, depressing and incredibly exciting. We eventually raised $600,000 in angel money to build our prototype and later a significant institutional round. Since that first experienced, I’ve learned that I love the early stages of company building- from developing the concept - to building the operations - to launching the product.

What was the original @ha Idea and how has it evolved?

Well, my most recent startup idea isn’t that original. We’re taking the successful business model of France’s Vente-Privee and the U.S.’s Gilt and bringing it to Asia, which is the largest luxury goods market in the world. The top three of four largest luxury goods markets are China, Japan and Korea (CJK).

What were your first steps after you fleshed out your @ha idea ? What was your first crisis or hurdle?

After my friend Jai and I fleshed out the idea and did our research, we started to build our team and hunt down luxury industry advisors. We also continued to research the details of the operations and finances of Vente-Privee, Gilt and other leaders in the private online luxury sale space. Our first hurdle was securing some commitments from luxury brands since we didn’t know how they would respond to this business model in Asian markets. Luckily, most of our discussions went well and we were able to secure some big brands.

This isn´t your first business start-up. Which past experiences or good advice help you navigate the entrepreneur’s rough road?

This will be the fourth startup company I have worked on from concept to execution. My past experiences have been tremendous learning experiences. Probably the most important lesson I learned from my past is that trust is essential for a startup’s success. The lack of team chemistry and conflict within the founding team has been the demise of many startups even those with a great business model, star engineers, and world-class investors.

Another area is lessons from fundraising. One startup we raised too much capital ($7 million first round) for what was needed and we became less cautious with our expenditures. We built our headcount too fast and tried to tackle a wider market instead of focusing on one segment. Another startup we raised too little ($450,000) for our objectives and it became what some entrepreneurs call a “funding to fail” situation where you’re constantly chasing dollars to make the next milestone. Not fun. Failure is a great teacher and motivator.

Being older and hopefully wiser, I am excited about this new venture since it isn’t hoping for a trend to converge with our vision or evangelizing a new market, but taken a proven concept into markets that we know are mature and ready. Also we know how much capital we need, so our team wants to avoid raising too much or too little. We already turned down an offer that was less than half of our fundraising objective since it would suck us into the “funding to fail” vortex.

Should Our Early Stage Company Take Money From a Strategic Investor?

This question was presented to me over at Peerpong:

"Should our early stage company take money from a strategic investor?"

My answer:

Strategic investors are usually difficult to work with if they have a strong influence as board member or major shareholder. They have their corporate interest and objectives that might not sync with your goals as a startup. I would just be very cautious and really discuss any areas of potential strategic conflict with that company before getting their money in.

The plus is obviously getting such an endorsement from a company within your space, potential "free" resources and industry connections and intelligence.

I would feel more comfortable if a strategic investor was an equal with another investor(s).

Why do you think startups fail? (Namita Bhasin's Answer at Quora)

A follow up to my prior answer at Quora and repost here. I liked Namita Bhasin's answer, so I'm reposting it here:

I did a research project on this in SJSU's MBA dept a few years ago. The short version of my findings:

- Human Capital
Given the choice between a team of rockstars or a less-proven team that works well together, you're better off with the latter. No matter how brilliant people are, if they can't work together, your startup is going nowhere. The synergy between people that collaborate productively can lead to amazing success.

- Social Capital
Weak ties are more useful than strong ones. When you are closely connected to someone, you tend to have many resources in common; when you are more loosely related to someone, they tend to have more resources (connections, money, expertise, etc) that you don't already have access to.

- Financial Capital
Too little money is an obvious problem - but so is too much. You risk spending your money too freely, shortening your runway (seductively high salaries for the aforementioned rockstars) and/or you may spend on the wrong things (logo t-shirts and laptop bags are not the best marketing tools).


Namita's answer also overlaps with my old article on "Building the Perfect Team" for startups, which emphasizes team chemistry and trust.

Tony Hsieh's Standing-Ovation Speech

At the Vator Splash event, Tony Hsieh supposedly gave an incredible speech, which you can read about here, where he explained why online retailers are there to serve the customer.

See this video on Vator.tv »

Some of Bambi's notes are here:

1) Because Zappos believes so much in its unique company culture, it is allowed to run autonomously from Amazon. The pre-requisite for being purchased by Amazon was to be able to "remain independent."

2) One brand that Zappos looks up to is Virgin

3) The philosophy about marketing is that the money that would typically go toward marketing should go toward fulfilling customer service

4) Seventy-five percent of orders come from repeat customers. In Q1 2010, revenue grew 50% quarter-over-quarter.

5) What is customer service?

a) Free shipping both ways

b) 365-day return policy

c) 1-800 number prominently visible on all pages (even though only 5% of orders come from the phone)

d) Call center operators don't have scripts

e) Call center operators are not allowed to upsell

f) Call center operators much check up to three competing Web sites for items if Zappos is out of stock

g) There are no limits on customer service calls. Longest customer service call lasted six hours

h) Customer service isn't just a department, it's the whole company

i) Surprise upgrades to overnight shipping

j) Warehouse runs 24/7

6) If companies get the company culture right, delivering great customer service happens naturally.

7) Zappos has an annual culture book made up of employee feedback about Zappos' company culture. Post a comment here if you want a culture book, and we’llget you a free culture book from Tony.

8) What ties this altogether is that Zappos is about delivering happiness

9) Go to 23:33 where Tony talks about the company’s corevalues.

When Does It Make Sense To Bootstrap A Start-up?

No, you're not seeing double. Yes, this is a repost with a few tweaks from my prior one that was my answer over at PeerPong.

Anyway, you can check out this newer post over at InsideWork here.

What's the Best Venture Capital Firm or Angel to Work with as a First-Time Entrepreneur?

My answer over at Peerpong and here are some others.

What's the Best Venture Capital Firm or Angel to Work with as a First-Time Entrepreneur?

Agree that you should focus on a specific partner and how he/she fits your personality, vision and intended company culture. Of course, sometimes you don't have that luxury. Here's my short list:

1. SV Angel (Ron Conway's angel fund)
2. Softtech VC (Jeff Clavier's angel fund)
3. Harrison Metal (Michael Dearing's "super" angel fund, $500K+)
4. Radar Partners (Kevin Compton, former KPCB partner)
5. Foundry Group (Brad Feld is a good mentor type)
6. First Round Capital

Why do you think startups fail?

A question posted at Quora...

Why do you think startups fail?
I have seen founders blame investors, investors blame CEOs, CEOs blaming the R&D people, R&D people say the product is fine, the market just doesn't get it, and marketing people blaming it all on the recession.

In your opinion, what are the major strategic reasons for startup failures?

My answer:

Strategic Reasons
1. The market simply isn't there. The startup could be way too early, too early, or just never was. I just hope you don't get in the last category because there will be all these drug accusations.

2. Poor allocation of resources and money. I've seen startups hire too many engineers, spend too much on marketing, or waste it on private helicopter rides to meetings (which mobile startup was that?) and other really idiotic expenditures.

3. Inability to change your business model midstream. Related to the first point, many successful startups have changed their business model midstream when they hit a roadblock. Is the CEO or management team able to be flexible in their thinking, or will the love of their product or personal stubbornness lead to their downfall?

4. Raised too much money. Sometimes too much money creates laziness or undisciplined management decisions. I've been here, so I just called it "management blindspots" or "big rounds are like crack for entrepreneurs" take your pick. Money burns quicker than most entrepreneurs think. It's not paper, it's paper soaked in gasoline.

5. Raised too little money. I've been here too. This is what I call funding to fail. You raise too little and you're always chasing the next bridge loan or funding rounds to take your company to the next half-step. Being greedy with your equity is good, but when it becomes a drag on product development or growth it becomes stupid. If and when you can raise a decent round, do it and don't assume investors will be there at your beckon call a few months down the road. Most people are beauty queens (or kings) only once.

Non-strategic Reasons
1. Lack of trust. Trust really is essential for a startup's success. If there is a lack of trust in the founding team from day one, it will be a slow poison that kills the company. A subpoint is the lack of chemistry. This soft issue of trust and chemistry has killed many startups.