I just received a question from a reader which I have posted below:

I have an idea for a Social Media Start-up, but I’m a Sales Man by trade and dont have the ‘coding’ skills to translate this idea into a product. What advice would you give at this ‘idea stage’ for me? Should I be trying to find developers/interns to help convert the idea into reality?

Who should read this post: Professionals with no technical skills (coding) that are looking to start an internet or mobile startup.

What you will learn: How to build an internet or mobile startup if you have no technical skills.

I don’t have any coding skills.

I am a businessperson who can sell a product, build a team, raise capital, and do operational work as the need arises.  The only reason I’m in the internet/mobile startup game is because I have a technical Co-Founder.

Let me make this easy for you: If you do NOT have a technical Co-Founder, then you have no business competing in the internet/mobile industry.

Why you NEED a technical Co-Founder

1. Products go through many iterations and a few pivots

I have seen many business-focused founders spend tens-of-thousands of dollars outsourcing their development work to Elance or Odesk.  Their products are always finished and they work pretty decently well; however, there is a huge problem in that in the very early stages of a company, a product is constantly changing.

The product team and sales team must work together to find a product-market fit.  Nearly 100% of the time, what you start off building is NOT what the customer wants; instead, you receive feedback from your target market while building the product, and then revise the product based on the feedback that you receive.  Because of this, you need a technical founder who is part of the vision and part of the customer development process.

Without a technical Co-Founder, you will spend more money than you should on your first viable product.

2. There is a HUGE difference between a decent developer and a great developer

My Co-founder is a genius developer - what it takes others 2 weeks to complete, it takes Stephen 1 day to complete.  I’m not even exaggerating. Stephen is that good.

In our startup experience, Stephen has had to solve countless technical problems and had to come up with creative ideas to solve technical issues that arise when dealing with clients.  You just can’t predict all of the bugs and technical mishaps that will happen once you launch the product.  You need a strong developer to put out fires quickly, while you keep the client happy.

More importantly, a strong technical co-founder contributes to the vision of the company and the vision of the product.  As a businessperson, you are not deeply knowledgeable about all of the latest technologies in the market.  How will you decide in what language to code your product?  How will you keep your product secure?  You need a technical co-founder that is always thinking about the product and how to make it better and better.

3. You need a strong technical co-founder to raise smart money

If you’re building an internet startup, then a smart investor wants to see a strong technical co-founder.  The reasons are described in points #1 and #2 above.

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It should be crystal clear - if you’re looking to build an internet startup, then the first thing you need to do is find a technical co-founder; everything else is unimportant.

How to find a strong technical co-founder

Stephen and I met at UCLA.  We put up a posting on the career website and Stephen responded to it.  We got lucky.

It is extremely difficult to find a great technical person that will drop what he or she is doing to join your startup.  It’s almost impossible!  Just think about it:

• Strong technical professionals are heavily recruited by the best internet companies: Google, Facebook, Mircrosoft
• If a technical professional has the entrepreneurial spirit, then usually he will start his own startup

You have to somehow convince a professional who is making good money at a large company to give up the paycheck and build your idea.

Here are a few tips on how to do it:

1. Don’t use a headhunter

We have tried 2 headhunters and received no results from them.  We just ended up wasting money and time.

2. Get them while they’re young

It’s free to post a job posting on university career websites.  Put up a job posting at the top 100 universities that really sells the dream.  Offer a graduating student the opportunity to join a fast-growing startup and make a difference in the “X” industry.  You probably won’t be able to pay them, but you can offer housing and food.  If they’re willing to work for equity, housing, and food, then you know you found one with the entrepreneurial spirit!

3. How to qualify a good programmer

Since you’re a businessperson, then you really can’t give them a technical test.  What you’re going to have to go on is past experience and references.

Most importantly, a good programmer does NOT see programming as a day job - programming is a part of life.  Look for people who are self-taught, who taught themselves how to program at the at of 8.  Look for people who are constantly learning about new technologies and take pride in being smarter than you.

4. Ask for referrals

Make it clear to your network on Facebook, LinkedIn, and Twitter that you’re looking for a developer.

I’ve tried to find developers at events, but you’ll mostly just find other business people looking for technical or design professionals.  We’ve recruited the majority of our developers from referrals.

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The first step is to find the technical co-founder - no point in doing anything until you found him or her.

Better yet, build a startup that does not require a technical co-founder.  I’ll write about these startups later  :)

Good luck!

I walked into the Huntington Beach, CA Men’s Wearhouse ready to spend $500 on a suit; I walked out disappointed in less than 20 minutes not having spent a dime.

I walked into the Costa Mesa, CA Men’s Wearhouse ready to spend $500 on a suit; I walked out completely satisfied in 2 hours having spent $2,000.

What caused this huge difference in sales?  There’s only one clear answer: An outstanding sales manager named Assaf Levin.

Who should read this post: Sales professionals that are looking to increase their sales conversions and commission value.

What you will learn: Given the same exact resources, what makes one sales rep better than another?  Given the exact same circumstances, what causes a customer to spend more than he was originally planning to?

It’s amazing how a bad salesperson will drive customers away and how an excellent salesperson will get a customer to spend more money.  This means that in startups, if you become an excellent salesperson, then you can close more client deals and get clients to give you more money.  This not only helps with cash flow and traction, but it will help you raise venture capital.

Below are the key characteristics of the excellent salesperson and why Assaf Levin got me to spend over $2,000 at his store.

1. Expertise

The Bad: The bad salesperson in Huntington Beach did not know his selection by heart.  I asked him for a slim fit suit, but it took him a few minutes to find its location in the store.  Furthermore, the bad sales person couldn’t keep the conversation going.  He just stood their awkwardly while I was trying out the suit.

The Great: Assaf was a suit savant - from the moment I walked into the store, he greeted me kindly and took my measurements.  He proceeded to ask me what kind of suit fit I wanted; understanding that I like a slim fit, he began to teach me everything about a suit: how it should fit around my chest, how it should fit around my shoulders, how long the cuffs should be, the difference between an Italian suit and a Spanish suit, and many other things that I frankly can’t remember.  What I do remember is that Assaf knew what he was talking about and he made me feel good.

Lesson Learned: Become an expert in whatever you are selling.  It’s not enough to become an expert in your product - you must become an expert in the industry itself.  If you’re selling suits, understand what are the latest trends, why these trends are happening, and how it will benefit your customer to adhere to these trends.

2. Honesty - which gains trust

The Bad: The bad salesperson tried to sell me a suit that was too small!  He tried to pass it off by saying, “That’s the style now - it’s how everyone where’s it.”  We then proceeded to try on the pants and I seriously couldn’t fit into it - my belly was busting out.  He said the following, “It looks like you may be too big for the pants (placing the blame on me).  You can purchase the suit here and then exchange it in San Francisco for one that fits.”

All he cared about was getting the sell.  He didn’t care if it didn’t fit; he didn’t care that it would be a hassle to exchange a suit in SF; all he wanted to do was get his commission.  This made me distrust him - and if you distrust a salesperson, then you will not buy from him.

The Great: Assaf spoke only truth.  When I tried on a 38, he specifically said the following, “I know you like a tight fit, but this suit is too small for you.  I will not have you walking out of my store looking like this; I cannot sell you this suit.”  He puts my ‘looking-good’ above a sell!  Can you believe that?  What better way to get someone to trust your judgement.

He showed me a 40 and explained why this fits my chest and shoulders better.  Furthermore, he explained that he can taper the body of the suit to make it as tight as the 38, but still maintain the proper silhouette on my shoulders and chest.  Assaf had my business as soon as he showed his level of integrity and that he put my looks in front of making a sell.

Lesson Learned: Put the clients well-being in front of making the sell.  For example, if your client wants a more expensive feature that will not benefit his needs, explain to him why you cannot sell him this product and why a different feature will suit his needs better.  In doing this, you’ll gain his trust and he’ll adhere to every future suggestion that you make.

3. Variety of choices

The Bad: The bad salesperson made me take the one suit I picked out to the fitting room and try it on.  He did not bring me other similar suits or colors to try on.  Once I realized the suit did not fit me well, I decided to leave because I just wanted that one suit.  If he had given me a variety of choices from the beginning, I might have stayed and bought another suit.  Instead, I was fixated on that one suit - and since they didn’t have my size, I was disappointed and left.

The Great: Assaf never let me get fixated on one particular suit or one particular color.  From the very beginning, he gave me a variety of choices and colors to choose from.  Furthermore, he didn’t let decision paralysis become a problem.  He made solid suggestions and had me try on 5 different suits in the fitting room.

To top it off, he brought me shoes that completed the whole outfit - he would not let me try on the suit with sneakers.  It didn’t matter that I told him I was not going to buy shoes; he said, “Buying the shoes is not important; what is important is that you see the complete outfit so that you make the right decision.”

Lesson Learned: Guide the potential customer to the right decision.  Don’t put all of your eggs into one version of your product; demonstrate your product’s flexibility by giving the potential customer a couple of options to choose from.  These don’t necessarily have to be pricing options; these can be operational options as well.  For example, the option to have an account manager personally install the product vs. installing the product remotely.

4. Up-sells and personalization

The Bad: The bad salesperson didn’t have a chance to up-sell me.  He spent no time finding out what I liked and I left the store before he had a chance to sell me anything.

The Great: Once I had an excellent time choosing my suits, Assaf proceeded to lay out my suits on a table and match it with shirts and ties.  He gave me a wide selection: soft colors, bright colors, pin-striped, solid, and everything else you can imagine.  As he learned what types of colors I liked, he began to filter the others away until we had arrived to the three shirts and ties that I absolutely loved.

Lesson Learned: Take the time to learn about your customer so that you can solve his pains.  Before you start selling the product, learn about the target customer’s specifics needs: have they been burned by a previous startup, do they currently use a competing product, are they looking to make a decision right away, and what are his greatest challenges right now?  Once you learn about his pains, you can customize the pitch and your product to his specific needs.

5. The Thank you Economy

The Bad: The bad salesperson gets no thanks from me

The Great: As I walked out of the store, I knew that I had overpaid on certain items; I knew that if I had gone to Ross, I probably could have saved $300.  As we left, my girlfriend Kim said, “Jun, you know that we can get those same ties and shirts at Ross for 50% off.”  I replied with the following:

“It’s ok. Assaf deserves his good commission.”

At a certain point in the sale, the price and product didn’t matter.  Assaf had won me over and I felt like he deserved my gratitude.  The best way to show him my gratitude was by making sure he got a big commission.

Lesson Learned: This is the Thank You Economy so eloquently described by Gary.  If you go above and beyond for your potential client and make him feel special, then he will reward you with his business, no matter what your price is or how good your product is compared to the competition.

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Use these techniques and let me know how your sales go!

It is quite easy to get an interview with any company.

Recently, my close friend decided to move up to San Francisco and pursue a career change.  In less than a week, I helped him get an interview with 3 fortune 500 companies located in San Francisco.

My friend does not go to networking events, does not have a vast connection list on LinkedIn, and does not have an actively read blog online; and yet, in less than a week, he has secured in-house interviews at 3 top companies.

Who should read this post: A young professional who is looking for a career change

What you will learn: How to get an interview at your dream company

The secret to getting an interview is quite simple: a solid introduction.

Most people assume incorrectly that only people who love to network can get introductions to top tier companies.  If you’re ready for a career change and you want that extra edge to get the interview, then take the following steps:

1. Start an industry specific blog to build thought-knowledge, credibility, and demonstration of passion
2. Connect with every acquaintance on LinkedIn
3. Develop your Introduction Request email and email to every relevant person
4. Take the right people out to lunch
5. Email the hiring manager for the position you’re interested in

Start an Industry Specific Blog

You are not blogging to build traffic.

You are not blogging to sale ads or products online.

You are not blogging to build a community.

The sole purpose of blogging for recruiting is to demonstrate your thought-knowledge in the industry, establish credibility, and to demonstrate passion for the position.

How to easily start a blog

You have 2 easy options:

1. http://wordpress.com/
2. http://posterous.com/

What to write about

If you are trying to get into finance, write about your opinions over recent mergers and acquisitions, the market downturn, stocks that you are invested in, and many other finance topics.

If you are trying to get into high fashion, write about this new fall season and what’s in style, your favorite designers, and how to wear a scarf with any outfit.

There are a million things that you can write about - so get to writing.

How much to write

Write a new post every Monday, Wednesday, and Friday until you get the job you want.

Connect with every acquaintance on LinkedIn

Here are the steps to connect with every relevant person you may know on LinkedIn:

1. Go to LinkedIn.com and create an account if you haven’t already
2. Go to Contacts -> Add Connections
3. Enter your email and password to connect to everyone that you have ever emailed
4. Wait a week to let everyone accept your connection request
5. Go to Advanced Search and search for people that are in the company you are interested in
6. Make a list of all of your first and 2nd degree connections (you will contact these people in step 3)

Email your connections for introductions

The following is an email template that I have used successfully to get an introduction to an interview.  Before you send an email, make sure you know what position that you are applying for.

Hi Name,

How is everything going?

Things are terrific on my side.  I’ve recently traveled to X, have spent time learning Y, and am taking Z classes to develop my proficiency in Z.

I’m emailing you today because I’ve recently discovered my passion for the A Industry and would love to work for Company Name.  I noticed on LinkedIn that you work at Company Name and would greatly appreciate an introduction to Recruiting Manager.  The opening that I’m interested in is Position Title.

I am fully committed to working at Company Name, and I currently write at Blog Name to demonstrate my knowledge and passion for the A Industry.

I have attached my resume and cover letter.  Thank you so much in advance for passing my documents to the right person.  Please let me know how I can help you in any way.

All the best,

Take the right people out to lunch

Everyone needs to eat lunch; everyone loves a free lunch.

Once you’re introduced to the right people at the company, you may offer to take them out to lunch.  Yes, this is very forward, but if you do it respectfully, then the professional may take you up on your offer.

The following is the email template that I use to take professionals or even recruiters out to lunch.

Hi Name,

My name is Name and I was introduced to speak with you by Acquaintance Name.

I am deeply passionate about the A Industry and feel that the skills and assets that I have developed throughout my career can greatly compliment Company Name.  Please take a look at my A Industry blog at Blog Name here to learn more about my thoughts, opinions, and analysis of the market.

I’d like to invite you to lunch next week to learn more about your company and to demonstrate why I’m the perfect fit for Position Title. I am available the following days and times next week for lunch:

Please let me know what days and times work best for you.

All the best,

Email the hiring manager with your job application

Once you have the right introduction, it’s time to email the recruiting manager with your job application.  Here is my email template.

Hi Name,

My name is Name and I was introduced to speak with you by Acquaintance Name.  I am interested in the Position Title at Company Name and have attached my resume accordingly.

I believe that I am perfect for Company Name because of my Quality 1, Quality 2, and Quality 3.

The next three paragraphs should highlight examples of your 3 qualities. Show tangible examples of how your qualities have create positive return for the companies you have worked for.

Take a look at my blog at Blog Name to learn more about my thoughts, opinions, and market analysis of the A Industry.

Thank you very much and I look forward to speaking with you.

All the best,

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If you use the above techniques and templates, then you will get an interview at your dream company.

Early stage startups love to give their product out for free.  It lets them beta test their product with early stage customers, get the bugs fixed, and build case studies so that they can later use these case studies to close large accounts.  This model has been tried again and again.

Stop doing it: stop giving your product away for free; stop letting your early-stage customers take advantage of you; stop de-valuing the product that you’ve built.

I’m going to tell you two lessons that I learned a long time ago:

1. If a client uses your product for FREE, it does NOT mean that a future client will pay for the product
2. Clients don’t purchase your product based on case studies

Who should read this post: Early stage startups that don’t have case studies and are looking to find their first paying customers.

What you will learn: How to pitch your product to your first customers so that they pay for your product without needing to look at case studies.

This is the usual pitch that a startup gives to their first prospective clients:

Hi David, thanks so much for meeting with me today.  My startup does the following… Since we’re an early stage company and don’t have many clients yet, we’d like to give you our product for free to test it out.  If you love our product and it does great things for your business, then we can talk about future pricing.  What do you think?

Stay as far away from the above pitch as possible.  To get a prospective customer to want your product and to pay for your product, follow the following steps:

1. Understand their pain
2. Customize the product message to solve their pain (pitch the dream)
3. Do not focus on pricing until they’ve committed to your product
4. Exit the pitch on your terms

Understand their pain

When given the opportunity to pitch, it’s only natural to want to jump in and start telling the prospective client about all of the cool features and services that your product offers.  Before you do, take a moment to show the customer that you respect him and that your product solves his exact needs.

To do this, you’ll need to understand his pain.

Every startup will have a unique set of questions to ask.  Below are the questions that I ask customers in the CRM industry - go ahead and model the questions to fit customers in your industry.

1. How do you currently manage your customer relationships?
2. How do you measure the effectiveness of your campaigns?
3. What are your greatest challenges in building a relationship with your current customers?

At most I’ll ask 3 questions.  I will then use the information I gathered to customize the pitch I give.

Pitch the Dream

This is your chance to show the prospective client that you understand their pain and that the product that you’ve built solves it.  But before you begin, you must understand that the prospective client will not understand all of the technical mumbo-jumbo that you’re about to throw at him.  It’s not enough to make your message simple and concise; you must make your message attractive to your prospective customer.

How to make your message attractive

If you’re speaking to a local merchant, then you need to speak in ways that are attractive to him.  A local merchant is entrenched in the day-to-day activities; therefore, you will scare your prospective client away by talking about all the various features that your product has.  Too many features means more training for his staff; too many features means more time for him to manage the product.  To make it attractive, you must focus the pitch on one of two things: your product will increase revenue or your product will decrease costs.

If you’re speaking to an MBA corporate executive, then this professional wants to know the numbers.  How will this product increase revenue?  How will this product decrease costs?  What are expected projections for the next 3 years?  How will you deploy the product at all locations?  How will you train employees?  You will not need to dive into all of this in extreme detail during the meeting, but it is important for you to have the answers to these questions should they arise during the meeting.

The ‘Dream’ must hit on an emotional level

People make decisions based on emotions and later justify these decisions rationally.

Example of our product pitch:

The Dream is NOT: A new loyalty program that gets customers to come back more often to your store and spend more money

The Dream IS: We give medium-sized franchises and retailers the power and technology that McDonald’s and Starbucks have.

I know that my target customer wants to compete with the bigger franchises, but they lack the money and technology to do it.  We solve this pain - we give them the platform that makes them as powerful as the big players in the market.  This message resonates with our target customer; this message impacts them on an emotional level.

Do not focus on pricing until they’ve committed to your product

Do not let a prospective customer jump straight into pricing; they must first commit to the dream you have pitched.

I took the following strategy from the book Pitch Anything:

Prospective customer: “How much does it cost?”

You: “Before we talk about pricing, I’d like to first know that we are in line with the vision we have presented for your company.  It’s important to us that you are committed to the value proposition that we have presented and the execution of these goals.  If we are now in line at this fundamental level, then there is no point in continuing and talking about pricing.”

Get them to commit to your value proposition.  If they don’t, then there’s no way they’re going to use your product - even if you give it away for free.

Exit the Pitch on your own terms

I have taken this strategy from Pitch Anything as well as I’ve seen it work marvelously in meetings.

At the very beginning of the meeting, you should have set a time frame for the end of the meeting. Commit to this time frame religiously.  For example, if you’re still in the Q&A session of your meeting and your 30 minutes are up, respectfully let your prospective customer know that you must head out for your next meeting.

Use the following script:

“It was a real pleasure to speak with you today.  If you believe in the vision of enter vision statement here, then I encourage you to contact me at my office so that we can talk about next steps.”

They must commit to your product and your vision.  If they’re committed, then they need to reach out to you to talk about next steps.

The entire point of this pitch is to create the feeling that you’re not desperate for a client and that you’re not desperate for money; you have a solid product that solves a real pain for this prospective customer - if he believes that, then he should pay for what the product is worth.

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Of course you will not close a paying customer every time; however, if you use the above techniques, you will make sure that your first customer closed is a paying customer.

It’s a chicken and egg problem that all startups face: we need case studies to close clients, but we can’t create case studies because we don’t have any clients.

First movers are of course important, but when your target market consists of established companies with over $20M in annual revenue, you’ll find that there are very few first movers - if any at all.  How can a small startup pitch big clients with no case studies?

My company faced this problem and overcame it.  I’ve outlined the steps we took below.

Who should read this post: Startups who target an established customer base beyond the small to medium-sized market.  Small companies are easy to close; it’s just a matter of who has the most resources to make the most calls. For larger firms, it’s all about the quality of pitch rather than the quantity of pitches.

What you will learn: How to present your startup in a way that makes your youth and small stature an asset rather than a weakness.

1. Do your homework

Do research on the person you’re meeting with: LinkedIn, company bio, blog (if applicable).  Key attributes that you’re looking for:

• Does this person have an MBA?
  • If so, then it is very likely that the person is very analytical and will feel superior to you because of your youth. Your presentation will need to have clear, crisp numbers to back up all your claims; furthermore, you’ll need to become his ‘equal’ from the very beginning: dress the part, build rapport, move the conversation to your expertise
• Do you have anything in common?
  • This will help you build rapport
  • Example: A potential client and I went to the same university - very easy start to a conversation
• Recent company news
  • Has the company recently hired someone, promoted someone, fired someone?
  • Example: A potential client I met with recently hired the CEO of a very large company that recently went bankrupt.  I tailored my pitch to how my product can position the company to NOT suffer the same fate as the previous company
• Industry news
  • This goes without saying; become an expert in your industry because showing expertise is a sign of higher value

2. Dress the part

Full suit and tie shows that you’re there for business and that you’ve done this a million times before.  A nice watch on your wrist shows that you have money and are successful; if you’re successful, then it means that the product you’re selling is successful.

Chances are that you look young.  Young means inexperience; young means unproven.  You need to get the potential client away from the former mentality and toward a new mentality: young means innovative, flexibility, and energy.

3. Build Rapport

People do business with people they trust and like.  Get on the potential client’s good side and you’ll be a step closer to earning their trust.  Now the question becomes, “How do I get the potential client to like me?”

The easy way: Find similarities to talk about: sports, college, investing, music; it can be anything that you enjoy.  Dig this up during your research or figure it out during the first few minutes of speaking with the potential client.

The hard way: Learn to tell stories and add humor to your pitch.  The topic of ‘telling stories’ and ‘adding humor’ is well beyond this post; we’ll revisit these topics later on future posts.

4. Set a timeframe

No pitch should last longer than 30 minutes - including Q&A time.  Your potential client hears pitches everyday - at a certain point, information goes in one ear and out the other.

At the beginning of the pitch, clearly state the following, “We’re excited for our meeting today.  My pitch is 20 minutes in length, giving us 10 minutes for Q&A - lets begin.”

5. You are the prize

I’ll write a longer blog post for this specific topic later.  For now, all you need to know is that this is a mental game.  You need to walk in there knowing and fully believing that you’re the prize - not them.  Though you’re desperate for a customer because you’re a small startup, you can’t let them know that.  If they feel you’re desperate for their money, then they’ll get scared and pull away.

You need to draw them to you.  How to do this in a few quick steps:

• Don’t thank them too much.  Saying “Thank you for your time today” or “I know you’re busy…” shows that you prize them.  Avoid saying “thank you” excessively
• Ask them why they deserve your business
  • Example: At the end of my pitches, I usually say the following, “My company only works with rapidly expanding companies.  How much growth do you expect in the next 3 years?”
• Make the expectation for them to call you
  • Example: “When you’re ready to move forward, give me a call and we can set up a time at my office.”

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Play like the big boys and use your youth, energy, and flexibility as assets.  My future posts will cover several of these topics in more detail.  Good luck!

The reason we moved to Silicon Valley was to be closer to investors, A-caliber developers and designers, and to immerses ourselves in the startup lifestyle. After a year in the valley, I can honestly say that the move was more than worth it.  The connections we’ve made, money we’ve raised, and progress that we’ve made have happened thanks to Silicon Valley.

It’s about time I update you on our new team and how we assembled such an excellent, talented group of individuals.

Who should read this post: Entrepreneurs who are looking to assemble an A-team

What you will learn: How to build an A-team for your startup

Co-Founder and CEO: Yu-kai Chou

What he does: Yu-kai raises funding, handles accounting, legal, human resources, and operations, and makes sure that Stephen, Adam, and I have what we need to do the best job possible.

How he was recruited: Yu-kai and I pledged Delta Sigma Pi together while at UCLA.  The first project we worked on together was Bruin Consulting - the premier consulting organization at UCLA.  We did an amazing job with Bruin Consulting, and decided to enter the internet startup world to change the world and make big bucks.  Our first venture together was FD World.

Co-Founder and CPO: Stephen Johnson

What he does: Stephen builds and designs the product.

How he was recruited: Yu-kai and I needed developers for our FD World project.  We reached out to the head of the computer science department and asked her to send an email to all CS students with our job posting.  We interviewed about 12 students - Stephen included.  Of the 12, we brought 5 on board - all in an “unpaid internship.”

It was quickly obvious that Stephen had the brains to be a part of the founding team.  When we transitioned to FD Career, Stephen became a full Co-Founder with Yu-kai and I.  Since then, we’ve worked on multiple startups.

Co-Founder and CMO: Jun Loayza

What I do: I close deals with clients

How I was recruited: Back at UCLA, I met this guy named Yu-kai Chou who was really smart and motivated.  I decided that if I stick with Yu-kai long enough, then I have a good chance of becoming successful and a millionaire.  Since then, I’ve worked on startups with Yu-kai - we haven’t had our big success yet, but we’re getting closer and closer each time.

VP of Marketing: Joseph Yi

What he does: Joe designs our presentations, researches competitors, leads our social media efforts, and ultimately is responsible for the company brand online.

How he was recruited: During the FD Career days, our goal was to get as much brand awareness as possible on campuses nation wide.  I decided to build a Campus CMO Internship Program.  I posted job postings at careers centers nation-wide and hired 20 Campus CMO’s from 20 different campuses.

Joe was our intern from UCR.  After the 6-month internship, it was clear that Joe had the creativity, work-ethic, and commitment to the team that deserved a full-time offer.  We extended our first full-time offer to Joe back in Winter of 2008 - we’ve been working on startups together ever since.

VP of Business Development: Adam Gervin

What he does: Adam gets us clients, helps us find team members, and positions our company for success through his extensive experience

How he was recruited: In January of this year, Yu-kai gets a completely random email from Adam; in summary, the email reads, “Love your guys’ idea! I’m building something similar.  Lets meet!”

All three of us were extremely skeptical - first off, startups don’t usually benefit from partnering with other startups; startups have so much to do and worry about that it’s hard to allocate time to another team,  Secondly, we couldn’t really find much information about Adam online, so we had no idea who he was or where he came from.  But of course, Yu-kai gives him the benefit of the doubt and decides to meet with Adam.

It turns out that Adam is a successful entrepreneur who has previously sold 4 startups - one for $850M!  He also graduated from Yale, got his M.D. from Stanford, and has Fellowships from Harvard.

Adam was working on a similar company, but when he saw my video, he decided to leave his startup and join ours to combine forces and succeed!  Thank goodness he found my video online.

Sales and Accounts Director: Marc Huey

What he does: Marc works directly with me on the sales and marketing side. When we were selling clients on foot, he walked door-to-door with me to sell our product. Now that we’re selling to corporations and franchises, he attends conferences to meet high-level executives and close deals. He also manages our client accounts.

How he was recruited: I met Marc in the summer of 2010 because of an event called The Founders Showcase. Every big name investor was going to be there, so I needed to figure out a way to attend the event without paying the ridiculous $1,500 ticket cost to attend.

Marc was the event coordinator so I reached out to him to strike a deal. My team would film the event, live tweet, and promote the event in exchange for 2 tickets.  Marc felt like this was a mutually beneficial proposition and Yu-kai and I got our tickets to the event!

Fast forward to October 2010.  RewardMe was doing well and we were ready to hire our first sales person.  I looked through my network and remember that Marc was a cool, energetic guy who had mentioned that he wanted to join a startup.  I took Marc out to lunch and asked him to join the team.  Marc liked our product, loved the team, and decided to leave his other company to join us full time.

Sales and Accounts Manager: Ashwin Anandani

What he does: Ashwin works directly with Marc and me to close deals.  He does whatever needs to be done: research, pitches, client calls, design, shipping, boxing, power points, excel sheets, and anything else that you can imagine.

How he was recruited: RewardMe was picking up steam earlier this year, so I decided to get an in-house intern to help out Marc and me.  I posted a job posting on Next Digest Jobs and received about 15 job applicants.  I did Skype video interviews with each one, and Ashwin stood out the most.

We offered Ashwin the following deal: housing, food, some pay, and an awesome startup experience.  Since Ashwin had just graduated from Nothwestern and was looking for a way to get to Silicon Valley, we provided the perfect, opportune ticket.  Ashwin has been with us since April 2011 and has done a super amazing job with us!

Product Engineer: Gerald Fong

What he does: Gerald works with Stephen to build the RewardMe product

How he was recruited: Yu-kai often speaks at Google, Stanford, and CINA (a Chinese business organization).  Gerald attended a CINA event where he saw Yu-kai speak.  Gerald was just about to graduate high school and was looking for a summer internship at a startup.  We brought Gerald into the office to interview with Stephen and it turned out was he was extremely bright and knowledgeable!

Gerald is now working full-time with us during the summer before he heads to Berkeley for college.

Product Engineer: Justin Warmkessel

What he does: Justin works with Stephen to build the RewardMe product

How he was recruited: Justin used to work for a startup right next door to us.  Stephen and Justin built a great friendship and often hung out together outside of work.  Recently, Justin’s former startup was going through some troubles and he asked us if we had any open positions.  Stephen decided to interview Justin and it turns out he has the right skill set for the developer talent that we need.

Justin’s first day will be on Monday.  We’re looking forward to having him on the team!

Web Engineer: Patrick Forringer

What he does: Patrick works with Stephen to build the web-side of the RewardMe product

How he was recruited: Yu-kai worked with Patrick a long time ago on several web projects.  Yu-kai is one of the best people I know when it comes to keeping in touch with friends.  Stephen recently mentioned that he needed someone to work with him on the web-admin side of the RewardMe product; Yu-kai searched his network and found that Patrick was still doing consulting work projects.

Stephen interviewed Patrick and he showed the skill-set that we needed for our company.  We brought him on board last month and he’s been doing an excellent job!

UI Designer: Suguru Nishioka

What he does: All of our designs pretty much: from the demo presentations, power-points, to the client materials

How he was recruited: Adam previously worked with Suguru on another startup.  Suguru has two full-time jobs, but decided to meet with us to see if there was a fit.  We of course hit it off and Suguru has been working part-time with us since March of this year.

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You’ll notice that we haven’t gone through any professional recruiters; all of our hires have come from personal connections or chance meetings.  If you’re impressive, show passion for your startup, and are fun to work with, then you’ll attract A-talent people who are looking to join a cool startup.

If you don’t get out there and put yourself in the position to succeed, then you never will.  Now get out there and keep meeting people!

I just received a terrific question from a reader which I have posted below:

I have started an online business with my college roommate.

We have many ideas that we strongly believe in, and I am trying to anticipate everything that we would have to face along the entrepreneurship road. I’m thinking of approaching investors, getting the word out, maintenance of the site, future upgrades, contingency plans, among a million other things. What I have a problem with is that my roommate and I haven’t written much down in terms of a business plan… or anything pertaining to what I stated above. My roommate is telling me to relax.

His approach is quite different. For now, he wants to keep our ideas in our heads, launch a functional site to begin, wait until we get visitors (we expect to have a lot), see how they behave, and then take action. Whenever I mention the things that I want to eventually do (and suggest to put it on paper or type it up), he suggests to wait until we are more established. I understand that over-planning can lead to planning paralysis, but since this is our first business venture, I worry that things will happen too quickly for us to handle… unless we really prepare.

What I want to know is: What can you suggest are the absolute first steps we should take to build a strong foundation? Am I getting too ahead of myself? and Do you believe there any downsides to being over-prepared as an entrepreneur?

Who should read this post: Young entrepreneurs who are starting their first venture

What you will learn: How to walk the fine line between preparing for the future and executing on the now

Over-planning in our younger days

During our first venture, we spent several months doing market research, creating financial projections, and building a business plan.  We constantly had to adjust the numbers because each month brought a new surprise in our plan with the occasional change in direction.  We felt like we had to spent a lot of time on the business plan because it was the only way to raise funding.  We were wrong.

Investors don’t invest in a business plan - they invest in a business.

Our mistake: Instead of building and selling our product, we spent time planning on our success.  If things stayed constant and played out the way we had planned it, then we probably would have become successful; however, startup environments constantly change and entrepreneurs must be able to adjust to what the market throws at them.  We should have spent 100% of our time and energy on building a business rather than planning to build one.

“Just do it” mentality with RewardMe

Our team fully committed to RewardMe in October 2011.  By January 2011, we had a fully launched product and 30 clients.

We don’t have a business plan and have not done extensive market research.  Regardless, we’ve been able to raise over $300K in angel funding.  A business speaks louder than paper.

What we did right: As soon as we fully committed to RewardMe, Stephen began building the product, I began selling the product, and Yu-kai began raising money.  Nothing else mattered.

How to walk the fine line

I make it seem like we just put our heads down and charged full steam ahead.  Although that’s a big part of it, we did spend time figuring out the core of our business.

We know who we are at our core

RewardMe is the easiest way for a business to create a loyalty program.  All of our company decisions need to make it easy for a business to create a loyalty program.  Furthermore, we focus on the mainstream customer.  While Foursquare focuses on the social-media person, we focus on the millions of people who will never use Foursquare.

We know where we want to be in three to five years

Our goal is to become the leader in rewards.  VeriFone does payments; Foursquare does check-ins; Groupon does deals; RewardMe does loyalty.  We must do whatever it takes to become the leader in this industry.

Our long-term goal is to exit within 3-5 years.  As a team, we have decided to take no more than a Series A round after our Angel round of funding.  We therefore need to make choices that will make us look very attractive in 3-5 years to a Facebook, Groupon, or VeriFone.

Direct answers to the reader

What can you suggest are the absolute first steps we should take to build a strong foundation?

Know what your core business is:

1. What is your business the best at
2. What do you love to do
3. How are you going to make money

Know where you want to be in three to five years.

The rest is about execution.  Focus on building a business that makes money.

Am I getting too ahead of myself?

Yes.  It’s good to know where you want to be, but startups change so frequently that it’s actually a hassle to write down everything you want to do in complete detail.  Startups are a roller coaster, so it’s more important to have a team that can adjust and pivot according to the market, rather than a team that sticks with the plan no matter what happens to the market.

Do you believe there any downsides to being over-prepared as an entrepreneur?

Yes.  If you are not flexible and are unwilling to pivot, then you will most likely fail.  Chances are that your first product, first target market, or first sales strategy are incorrect and could potentially lead you to fail.  A great entrepreneur sees these obstacles and is able to quickly pivot to lead his or her company to success.  Stay vigilant and flexible while executing on the now.

The hardest part is getting started.  Think about scaling once you have a product and paying customer.

Move fast, make mistakes, learn from them, and pivot when necessary.

Good luck!

“I have a killer idea! But sorry, I can’t tell you because I’m in stealth mode - I don’t want people to steal my idea.”

Bleh… if this is you, you should rethink your life. First of all, smart, motivated entrepreneurs are too busy with their own idea to drop everything that they’re doing just to go after your idea.  Second of all, entrepreneurs who drop what they’re doing to go after your idea will most likely fail.

I digress.

My point for this post is that startups don’t kill startups - startups die because of a lack of execution.

Who should read this post: Entrepreneurs that are worried about their competition, rather than focusing on the product, clients, and funding.

What you will learn: How we think about our competition here at RewardMe, allowing us to stay one step ahead of them.

Mistakes as young entrepreneurs

A long long time ago, my team and I built FD Career.  FD Career was in the career space, and our closest competitors were Brazen Careerist and Your Success Network.

I remember spending so much time and effort researching competitors, trying to figure out what they were doing; I remember being intimidated by Brazen because they had funding and a CEO with a previous successful exit.

I analyzed what they were doing too much - “Brazen has a blog!  We need to have a better blog; YSN has a community! We need to build a larger community!”

I should have focused on FD Career, our vision, and our core competency.

Let the other startups focus on what they think is right; more often than not, they’re as wrong as you are.

Don’t let the big boys intimidate you

Investors always ask this questions, “What happens if (Enter large competitor name) does it?”

For example with RewardMe, investors always ask, “What if Foursquare does what you’re doing?”

A big player can always do what you’re doing, but does that mean that they’ll be the best at it?  Just take a look at Quora and Facebook.  Facebook has a much larger community, but Quora is able to keep going strong because they executed well and focused on one specific feature - Q&A.

The more focused you are on one feature, the better your chances are at beating the big players.

Another example: Indinero

Indinero makes business finances super easy.  Their big competitor is Quickbooks.  I bet investors ask, “What happens if Quickbooks creates a super simple product for businesses?”  I actually think that they have, but it sucks.

Jessica and Indinero don’t care what Quickbooks is doing - they’re focused on their product and making it as perfect as possible for their target audience.

To our startup competition

Bring it on.

I’m glad you’re in this space.  It fuels my team and validates the opportunity in this market.  There’s no leader yet; one of us will figure it out and win, or the big boys will bully us out.  Either way, it’s going to be a fun ride.

Good luck to you guys - you’re going to need it.

Every successful entrepreneur and investor preaches to get to market as fast as possible and iterate, iterate, and iterate as fast as possible.  Unfortunately, few startups keep track of their iterations, let alone tell you about the things they learned along the way.

I felt it’s time to tell you what I’ve been up to these month; and what better way to tell you than through our product iterations!

Who should read this post: Entrepreneurs that are focused on product development.  If you’re in the midst of building/launching your startup, then this is the read for you.

What you will learn: A walk through of the iteration process - how to get from the concept of an idea, to a product that doesn’t work, and finally to a product that works.

Original Concept: August 2010

We originally came up with the concept of RewardMe on a train ride to SF.  The geo-location and the daily deal spaces were super hot, and we wanted to capitalize on these emerging markets by combining the value of deal sites with the relevance of location.

We thought that a mobile application that featured nearby deals would be absolutely amazing!  For example, after you left work, you could open the app and find nearby restaurants that offered great deals.

In essence, we wanted to build a location-based deal app.

Believe it or not, I wanted to call the company NearDealy.  I still have the original Power Point that I presented to BlueRun Ventures (sign up to my newsletter if you’d like access).

The closest example of our original concept is The Dealmap.

RewardMe is born: September 2010

To get the creative juices flowing, the team went to Barracuda Japanese Restaurant for some sake bombs!

We dissected the value proposition of Groupon and Foursquare and came up with the following:

• Groupon: Drives new, un-targeted customers that rarely return as repeat customers
• Foursquare: Fun social game that does NOT verify a check-in

We realized that current startups are focused on the new customer and completely neglect the loyal customer; furthermore, startups like Foursquare would be great for loyalty, but they lack the ability to verify a check-in.

We found a clear pain - businesses lack the technology to turn new customers into loyal customers; the market was untapped and the big players were focused on coupons.

RewardMe was born.

Audio Check-in (Version 0): September 2010

Our first product idea took what Shopkick does and applied it to SMB’s.

How Shopkick works: Target has a speaker that plays an audio frequency inside of its stores.  When you open the Shopkick mobile app inside of Target, the app hears the frequency and checks you into the location.

Our idea was to replicate this process at small to medium-sized restaurants and cafes; however, we quickly abandoned this idea because it was too discreet.  We want a customer to use RewardMe in such an obvious way that the general manager  sees it in use every time.

Magnetic Pad (Version 1): October 2010

We realized that we could disrupt the compass built into the iPhone and Android with a magnet.  We therefore built “Pads” (see image above - hahaha, yes, it’s a mouse pad) that had magnets built into them.

The idea was simple: The Pad would be placed next to the cash register or inside of the check-presenter at restaurants.  To check-in, you place your phone on the pad and the magnet figures out where you are located and verifies the check-in.

It sounded great in theory, but there were some MAJOR problems with this version of the product:

1. The compass-displacement was unreliable

Sometimes the magnet would displace the compass 25 degrees; other times it would displace it 40 degrees.  The compass would react differently depending on the position the phone was placed on the Pad.  There was no way for us to know with 100% accuracy where the check-in was located.

2. The Pad was invisible

We placed the Pad at coffee shops to test what effect they had on customers; we found out that absolutely no one noticed the Pad - it was too small and flat!

3. The check-in took WAY TOO LONG

The check-in with a Pad took about 10 seconds (when it worked).  We somehow convinced ourselves that this was good enough to go to market with.  Can you imagine if we actually went ahead with it!!!

We didn’t realize just how bad it was until our good friend Monica came by to visit.   She tried it with her iPhone and was appalled at how long it took to check her in.

We should have realized that 10 seconds is an eternity when you’re standing in line at a coffee shop.

QR Code (Version 2a): November 2010

We decided to go with QR Codes to validate a check-in because they’re easy, cheap to print, and are becoming mainstream.

But as you can see from the image, we didn’t immediately abandon the Pad.  We decided to stick a QR Code on the Pad and place it on a plastic stand next to the cash register or in the check-presenter.

Sometimes when you’re absorbed in your startup, you forget to take a step back and look at the alternative possibilities.

Luckily, our developer Ryan King said the following to us one day, “Why don’t we make the Pad a sticker?”

DUH!!! (Winning!!!)

QR Code (Version 2b): December 2010

Stickers were SO MUCH cheaper than a Pad.  More importantly, we can easily stick a sticker on a plastic stand or inside of the check-presenter - it was the perfect solution.

We finally arrived at a product that was cost-effective, clearly visible to customers, and fast and reliable enough for people to use.

It was time to deploy!

We deployed our product to Beta testers with great success!  However, 1 week into our deployment, we realized that we had overlooked one major detail - the QR Codes were printed on regular paper.

And what happens to regular paper when you wipe over it with a wet cloth?  It gets completely crumpled and unreadable.

This is what started happening to our QR Codes at table-service restaurants.  The waitress would use a damp cloth to clean the inside of the check-presenter, ruining our QR Code in the process.

So we had to quickly come up with a solution.

QR Code (Version 2c): January 2011

Our first attempt was to place scotch tape on top of the QR Code.  Hahaha, I can’t believe we actually tried this.

We then bought glossy QR stickers that were water-resistant.  We quickly replaced ALL of our original QR Codes with these water-resistant ones and finally had a product that worked without fail.

Yay!

We quickly realized however that people weren’t noticing the stands and didn’t want to read all of the text on our stickers.

We had to make the sticker larger while simplifying the message.

Furthermore, our original 4×4-inch sticker easily fit inside of a check-presenter, but did not fit inside of a tray (some restaurants use trays instead of a check-presenter).

QR Code (Version 2d): February 2011

We increased the size of the plastic stand from 5 inches in height to 7 inches in height.  We also created a 3.5 x 5-inch sticker that can be placed inside of a check-presenter or a tray.

Lastly, we broke up the text with image-tutorials of how to download and use the application.

The more we learned about our product and watched customers use it, the more we were able to refine our product.

During our in-field product research, we found the black background of the sticker made it invisible to customers.  It was great for business owners because it didn’t intrude with their location atmosphere, but customers wouldn’t notice it at the cash register or inside of the check-presenter.

We needed a way for the sticker to be even more simple, but at the same time, stand out so that customers see it and download out app.

QR Code (Version 2e): March 2011

Through one of our team members, we met a great UI designer named Suguru.  This is the first time in our startup careers that we’re actually working with a UI professional - and you know what, it feels really good.

I mean, just look at the design.  It stands out, it clearly leads you to each step, and is so simple that you know exactly what to do without having to read it in detail.

Best of all, Stephen and I can relax on the design and UI part of the company - finally!

This current version of the sticker is set to deploy this week!

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Well, there you have it.  A complete evolution of our product.

Remember, your goal is to get a functional product out to your customers as soon as possible.  Understand how your customers are using your product and iterate, iterate, and iterate fast!!!  The faster you can iterate, the more likely your startup will succeed.

If you guys have any questions or comments about the iteration process, feel free to leave them in the comments below.  Keep working hard!

Just when Kim and I made plans to move in together in 2011, the startup gets in the way.

Kim plans to move to Philadelphia next year to pursue a corporate career at Free People.  Since my work environment is flexible, I planned to move to Philly with Kim and support her big career move.  All was going to plan until we made a critical pivot in our startup that put us in the right direction and right in the heart of a fundraising round.

With my new marketing and sales plan for 2011 - which I will tell you about in a later post (or perhaps only to my newsletter subscribers) - it’s impossible for me to move to Philly.

I now have three options - I would love your input on which option you feel we should take.

Option 1: Move to Philly with Kim

With this option I’m able to support Kim in a new city and play the role of a stay-at-home-boyfriend; however, my 2011 sales and marketing plan would not be executed to perfection and RewardMe would not capture the market.

There’s just no way…

Kim, I know you read my blog, so I know you will understand why this cannot be an option.  3 years babe - it has been 3 years in the startup life and we’re closer than ever to building a successful business.  Thank you so much for your patience, love, and support.  Remember, the potential of a multi-million dollar exit is in your future too 

Option 2: Kim moves to Philly; I stay in Silicon Valley

Bleh…

Kim and I have experienced the Long Distance Relationship (LDR) for almost a year now.  Though our relationship is as strong as ever, we feel that we’re ready to take the next step and live together.

Moving further apart just feels like we’re taking a step backwards in our relationship.

Then again…

I want to support Kim’s career choice - just how she has supported my career choice.  What kind of a boyfriend would I be if I forced her to move up to Silicon Valley with me?

I can of course fly to Philly once a month to see her, but it’s just not the same as living together and I feel this type of compromise is just not ideal - we spend a lot of money traveling for little time spent together.

Option 3: Kim moves to Silicon Valley with me

Call me bias, but I really LOVE this option 

If Kim moves up here, then we can get an apartment together and I’m still able to focus my time and energy into RewardMe.  Best of all, there are two Free People stores opening in Northern California!  Kim has the opportunity to manage any one of them.

But it’s not the career path she wants…

I wish Free People Corporate was located in Northern California - then all of our problems would be solved.  It’s so hard to find a job you truly love, and when Kim finally found one, she worked as hard as she could to get the opportunity that she is presented with today.

That’s the thing - I’ve never seen her work so hard. I know she wants the position in Philly, and I don’t want to take that away from her.

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What do you think?  Option 2 or Option 3?

Kim reads my blog too, so feel free to talk to her directly in the comments.