Tag: Venture Capital

The Hustle Hoax

Posted on by Steve Sammartino

I came across this article recently discussing the Startup Hustle Bubble which is occurring in many entrepreneurial circles. The title said that working 9-5 is for losers. I tend to agree, but in the opposite direction than many of the Silicon Valley disciples espouse. They promote the 18 hour work day, I reckon that’s a better number for the week, only kidding, but not by much. To save you reading it, the proposition of the so called Hustlers goes like this:

  • Workaholism is a desirable life choice
  • To succeed you must give up everything (depends how you define success)
  • Out grind, outwork and out hustle everyone
  • A cottage industry of Hustle conferences are emerging
  • There’s even a Hustle Jesus – otherwise known as Gary V, that hustlers genuinely worship
  • Then there was some wonderful counter claims by the journalist.

Here’s a few things worth considering:

Firstly, there is no doubt work is required to get results in anything, but there is no evidence that working a crazy hours makes people any richer – if that’s the goal. I’d add to this that most of the people I know with incredible financial wealth, didn’t hustle all day and night, they used their brains, took calculated risks, saved, invested and compounded small advantages over time. But you know what they did more than anything else? They got others to work the hours for them and arbitraged their wages. It’s how capital works. Capital wins, capital always wins simply because each individual will only ever have 24 hours to give.

It’s also worth remembering that only thing we can never earn back in life is time. No amount of money will buy it back, your kids (if you have any) will only be young once and they’d rather have your time, than toys. We all know that money doesn’t lead to more happiness over a certain threshold. But mostly we should always be driven by our own personal objectives, when it comes to what we sacrifice. It’s vital we don’t get caught up in ‘fashion’ or the goals of others who a vested interest in the amount of hours we put in anything.

If you want more life hacks – then you’ll totally dig my new book The Lessons School Forgot. By the way, I went surfing on Tuesday, had a two hour nap today and I still got all my work done!

The tradeoff Startup founders must never forget

Posted on by Steve Sammartino

Them:

So, we’ve just nailed our MVP and we are getting some real traction.  Next we’re going to raise capital, get some funding. We’ll probably go to the Valley as it’s easier to raise there. The valuations are more generous. We’re super pumped, finally getting our startup off the ground.

Me:

I thought you were an entrepreneur? 

Them:

What are you talking about? Of course I am – didn’t you hear what I just said?

Me:

Yes, but here is what I heard….  That you’ve finally got something people want, you’re probably solving a real problem and you’re on your path creating value for others, and eventually yourself. But in this process, you’ve got caught up in pop culture. You’ve forgotten that a big part entrepreneurship is independence – creating your own path. So, you’re off to raise money and get caught up in someone else’s objective – that of the venture capitalist. The same group of people who’d rather see you fail trying to build a billion dollar company,  than help you build a $10 million company. Their business model you see, is based on the former, not the latter. 

Venture Capital - the downside

If there is anything startup founders should remember it is why it’s worth doing at all. Startups are hard, and rarely a path to riches. Entrepreneurship is more about exploration and freedom than money. If you want to be rich, there’s more chance of that happening being an employee of a company that already has a billion dollar valuation.

In both cases: a funded startup or being employee – you’ll compromise control. In that case you may as well have the certainty of money that goes with stock options and employment. If you want to be answerable to anyone other than your customers that is.

It’s a rare event indeed when the deal terms favour the founder. Real entrepreneurs find ways to make money independently with that anti-modern thing called a profit. For every example of an entrepreneur succeeding with funding, there are 99+ that do not. It’s a bet I’d never take unless the VC came knocking on my door and / or I could maintain total control and independence.

Follow me on SnapChat – search ‘Sammartron’ for more business insight. Click here if on mobile to add now.

You don't need an investor

Posted on by Steve Sammartino

Venture Capitalist

Yesterday I got an email from Sam Birmingham from Pollenizer, and it’s message was so compelling, I had to share it here:

It is something we hear all too often… “I was wondering if you could help me find an investor?”

You don’t need an investor. You need customers.

You don’t need an investor. You need to prove that you are developing a sustainable business model.

You don’t need an investor. You need to focus on learning as much as you can with the finite resources at your disposal.

Sometimes having limited time / money / people can be an advantage. Do the best you can with what you’ve got. Stop making and start answering the most important question in entrepreneurship – what comes next? 

For more startup goodness be sure to check out the Pollenizer blog. 

New Book – The Great Fragmentation – out now.

The first question early stage startups should ask themselves

Posted on by Steve Sammartino

Screen Shot 2015-04-06 at 10.30.31 am

When we being our journey into a new startup we get excited by the possibilities of what we are about to build. Especially when it comes to raising capital to support the project. But in the moment there’s one question we should not forget to ask ourselves:

Is this a technology push or a problem pull?

The answer to this question changes the direction of the entire project. It changes who will care about what we are building. If making money is the objective, it makes more sense to be in the problem pull space. If you want to change the world, Peter Thiel or Peter Diamandis style, then it pays to be in the technology push arena. Both can become commercial success stories, and one isn’t superior to other, it just depends on what we are chasing – it’s really about the ‘Why?’ The thing that really matters is not confusing which of the two our startup plays in and ensuring our expectations match the funding, timeline and outcome realities.

New Book – The Great Fragmentation – out now.

7 simple concepts

Posted on by Steve Sammartino

Had a few ideas in my mind for blog posts. But thought I’ll just soundbite them now and go deep later:

1. Selling Potatoes: Startup ideas are often far too clever. Often they represent what is technically possible, rather than what is technically needed. I keep coming back to the idea of selling potatoes. That is, selling something demand already exists for. If we do this, we can stop wasting resources trying to creating demand. Instead we can just do a better job connecting and serving the existential market. Buy for price X and sell for X2. I’m wondering why a ‘potato’ business is rarely considered by aspiring entrepreneurs. We ought resist the temptation to 3D print ceramic fur balls for imaginary cats.

2. Market Validation: Real market validation must be with strangers, not colleagues. If it’s an online business, then validation can’t be done in person. If it’s a physical business then validation can’t be done on line. We ought match the real world. Real market validation should involve money, and avoid surveys.

3. Size & Attitude: The bigger the company the harder it is to maintain a cool attitude. When companies go public, their DNA changes. It’s just a fact we ought accept. At this point founders don’t care, they’ve already made bank. When our favourite companies get big it is inevitable we will suffer from a little bit of startup nostalgia.

4. Business Model & Problem Solution: I often get pitched startups that have a great business model with no real human problem. Or a solution to a human problem which struggles to find a business model. Our chances of success increase dramatically when we have both. We should work hard on having both of these elements when conceiving our next startup.

5. Quiet Self Esteem: It is what we are doing when no one is actually looking that matters. The actions we take that only we will ever know about. This is what we should focus on.

6. Half Baked Ideas: These are the best ideas to play with in the short term. It means we are in the kitchen experimenting. It doesn’t mean we should try and sell these cookies at the market, but we should always throw a few new recipes in the oven.

7. What VC’s Really Invest In: Justifiable failure. They don’t aim to fail, but before they invest a dime they know they will get it wrong more than 9 times out of ten. They’ll never admit this, but they are only ever investing in what will sound like a good bet to their partners. So that when it does fail (and it will more than 90% of the time) it is justifiable to those who stumped up the money. Hence, when seeking capital all we need be is justifiably worth the risk.

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The Silk Road Patron

Posted on by Steve Sammartino

Regular readers of this blog will be aware of the Super Awesome Micro Project. And if you’re not aware I’m about to disclose some of the secret sauce. Mainly because between now and when we launch, it is physically impossible to be copied by anyone. For two reasons – the first is that no one else has Raul, and secondly it took us way more time and money than we would ever have imagined.

In fact, what we are doing has been on line for some time for those who wanted to seek it out – the secret, has been out a while on this Ignite talk I did at a global digital event as linked below:

A Stranger From Romania.

As you can tell from this super fast talk, we are building a world first piece of technology – a technology which at this point has no commercial goal – and no other reason for existing other than awesomeness. A pressure test of what is possible when the connected world aggregate small amounts of money with large amounts of thinking.  To see what we can build using democratised digital factors of production and a teenage genius.

It was made possible by 40 people in Australia, also known as the Super Awesome Micro Project Patrons. Normal everyday people having a crack at creating part of the technology narrative. Our Modern Day Medici. The facilitators of the future.

What is it?

We are buildng a full size car, built entirely from lego, with an engine built from lego, and the engine runs on air. Actually, let me rephrase this. We have already built it. It is done. We have succeeded.

This is where the Silk Road Patron comes in:

We are at the point where we need to transfer the Super Awesome thing and the Super Awesome kid from Romania to Australia for the launch. The cost of transferring our adopted son and our fantastic plastic machine to our fair brown land rounds out to approx. $25K give or take. It is our plan to airfreight both artefacts human and construction – for time & safety reasons. The truth is, I can’t ask any of the patrons to put in any more money than they have already donated. Every single one of these people has already stretched themselves financially. I personally do not even want to talk about how much money I have put into this, other than to say it is 100+ times more than I thought it would be. This is no exageration.  And so what we need is the Silk Road Patron.

The Silk Road Patron is the internet version of a silk road trader of antiquity. Someone who is intrigued by the possibilities of exchange from lands afar. Interested in new minds, methods and techniques. Inspired by and for the benefit of a populous wider than themselves. This Silk Road Patron has nothing to prove to anyone, because they’ve already done it – they’ve crossed the globe, trekked the path and already made bank with their own spice trade. They want to give back – be the final player who connects the possibilities of the #SAMP. The Silk Road Patron is a person, not a corproation. The Silk Road Patron’s gift of participation in this arduous project, is participation itself – a personal satisfaction.

This is something wider and deeper than the #SAMP – it is in fact the search for Australia’s most generous entrepreneur.  A VC whose return on investment does not involve percentages or ROI. Their drive is ROH – return on humanity. (It is worth noting we can provide validation and proof of our achievements via private digital methods.)

And so our search for this person starts today. Please let us know if this person is someone you know, or maybe, just maybe it is you. 

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Reality, Comedy & Venture Capital

Posted on by Steve Sammartino

The story of the court jester is an important one. Largely employed by rulers to entertain during medieval times, they served not simply to amuse but to criticize their master and their guests. The jesters position was one within a the power structures of society. Rulers knew that their servants had neither the position or the courage to drop a truth bomb or two, and so this role was outsourced to the local fool.

The problem today, is that most leaders, CEO’s and entrepreneurs don’t have a personal jester to keep them in tow. Maybe we should. It’s also fair to say that the technology and Venture Capital realm could do with an injection of reality now and again. I recently happened upon a video of famed inventor Nikola Tesla as if he was transported from the past directly into Silicon Valley. He was pitching his concepts to a group of VC’s whose responses were both hilarious and predictable. Another classic example which proves we often have more to learn from the Court Jester than the local hero who has already made bank. It seems as though we too have our own Jester, in the form of video spoofs.

[youtube=http://www.youtube.com/watch?v=zngK13FMgXM]

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