Author: Albert Ciuksza (Page 7 of 8)

Money vs. Quality Deals

February 1, 2010 / Albert Ciuksza / 0 Comments

I’ve noticed that there are two schools of thought in Pittsburgh about the availability of risk capital and the lack of funds going into local start-ups. The first is that there are some very good deals in Pittsburgh, and there is precious little lower-level risk capital ($500k-$2M), and blame generally falls on the nearly impossible standards set by the local VCs/Angels. The second is that there is plenty of money out there and that money and finds great deals no matter what, inferring that the issue isn’t money, it’s the companies coming out of the region.

As someone who has worked on a project that got an Angel round (and some subsequent cash infusions), I can understand the difficulty in finding that money and, as a result, I’m a bit biased. Looking at the landscape, I believe that there are some very intriguing companies/technologies coming out of our colleges, universities and innovative entrepreneurs, and that should be supported. Obviously, I’m not alone — the Pennsylvania government and local foundations infuse local organizations with capital that is then extended to these companies. However, when those companies have grown out of the alpha stage and to a point where they’re ready to start beta testing in real-world environments, are they the quality deals that attract VC investment? Is Pittsburgh’s risk tolerance unusually low?

My guess is that our VC community isn’t much unlike others around the country. I’d also guess that Pittsburgh has similar state-level resources to other areas and, perhaps a little more. What I don’t think we have is an ecosystem — a critical mass of successful entrepreneurs that have cashed out for several million and immediately feel the responsibility to return the favor to other hungry entrepreneurs. The cities most often cited as models for the ecosystem — Silicon Valley, Boston, etc. — have earned that reputation honestly, but have taken decades to build that ecosystem. As one local VC said to me, “they weren’t built overnight, and we won’t be either.”

But, I think we’re getting there. There is a lot of energy in this community and, I suspect, additional resources will be devoted to not only supporting these companies, but helping to create that ecosystem that is critically important. I also believe that we need to do a little marketing to the outside world, showing off some of the companies that are making a difference. Would engaging other cities’ communities help facilitate some cash inflow by introducing their financiers to our companies? Would connecting with the diaspora help us to bring some of that money back to Pittsburgh? I think it would.

In the end, almost any money is good money, no matter where it comes from. Would I like to see more low-level risk capital? Of course. But, until we have a critical mass that can support some of these good-to-very-good deals (as opposed to great deals), we’re going to struggle to fund these companies. Should the state take a more active role? How do we get this done in a down economy? And, what are the best way to keep these companies fed in the meantime?

Blogging is Really Hard

December 4, 2009 / Albert Ciuksza / 0 Comments

News flash to those thinking about or currently writing a blog — it is really, really hard.

Don’t get me wrong, I think blogging is one of the most important ways that an individual or company can show how they’re different/better than their competitors. A company’s business philosophy and technical competence shows through in the words they write. Plus, there’s something to be said for being forced to challenge current perceptions and having to articulate a vision. It’s a great mental workout and shows current and potential customers a window into how strong a company really is.

However, the reasons to write a blog are also the ones that make it a challenge. First, we’re not all first-class writers (if you’ve flipped through mine, I’m sure you’d find plenty of mistakes). Second, it’s tough to find a voice that balances a professional tone and the openness that the social media world requires. Third, there is a time and mental resource challenge associated with a blog and can sometimes let weeks go by before we have the chance to sit down and write. Finally, if you don’t get the readership you want, it’s easy to get discouraged and allow a blog to become a graveyard.

Confession: I have a particularly difficult time writing my blog. Should I be funny at the risk of being offensive? Should I be brief but short on details? Should I come off as an expert or open-minded learner? Who should I be writing for? Should I write for only myself, or should I try to build an audience? Is there anything I’m going to say that might come back to haunt me or get me fired? And what the heck do I write about, anyway?

I’ve been working on figuring out the best way to solve these problems. As a proud BlackBerry owner, I’ve downloaded and used the WordPress app, which lets me get some thoughts down that I can either publish immediately or develop more fully when I get time. I’ve been attempting to schedule time to think about certain topics and decide what might make sense to write about. However, these are just process solutions; they don’t get to the bottom of my main issue, i.e. what is it that I should be saying and how do I say it?

I’ve recently engaged an editor and PR veteran to do some analysis on this blog. One of his areas of expertise is in co-authoring and ghostwriting, and he has mastered the art of identifying a “voice” and applying it to developing copy. I can’t wait to hear what he has to say, even if it’s going to be tough to hear.

Have you done an audit of your blog? Have you gotten feedback on whether or not you’re saying the right thing, being brief enough, or speaking to the right audience? Do you think you’d benefit from a professional blog audit? I’d love to hear from others who might be suffering from this challenge.

Persist Through the CRAP

November 17, 2009 / Albert Ciuksza / 2 Comments

Saw a TED video by Richard St. John ( @RichardStJohn) , who discussed the 8 things that successful people do (video here). While the other aspects of his presentation might be things you’ve heard before (work, ideas, passion, focus), his perspective on persistence caught my attention, mostly because it incorporated mildly inappropriate language, a technique I enjoy using from time to time.

In his speech, he says that you have to persist through the CRAP – Criticism, Rejection, Assholes and Pressure. I hadn’t thought about it in such quite succinct terms, but that’s perfect.

Entrepreneurs have a unique expertise in persisting through the CRAP. Taken individually:

Criticism — There’s no shortage of criticism. The risk of a selling a new, innovative product as a small company is full of pitfalls and opportunities for people to blow up your idea. I think that’s a great thing … people who tend to take the time to criticize are emotionally invested. Proving them wrong drives many of us to make it all work.
Rejection — Funders, potential customers, friends, family … you don’t know what rejection is until you try to start your own company.
Assholes — I don’t think I have enough time to cover all the different types. From the extreme critics, to the egotists, to the folks that have no problem wasting your time, they’re everywhere. Trust your gut and, if you’re not sure, ask around. Most of these folks have a reputation. If you hear from two people in close-knit community that the person is shady, run.
Pressure — There’s nothing like the shut-off notice from the gas company, or a hungry family, to make you work extra hard to close a sale (or politely call every customer who is even 30 minutes past-due).

I’m going to think of my challenges this week in terms of persistence and in terms of CRAP. How many of them are just one element, or how many are all four? How do I manage those situations when I run into them? Am I as persistent as I should be? How does it change as a follower vs. a leader?

Learning from 2009

November 10, 2009 / Albert Ciuksza / 0 Comments

I had the opportunity to contribute to a series by Sharalyn Hartwell ( @SharalynHartwel) at Examiner.com entitled Gen Y Gives Thanks. Her stated goal for the month-long project was to counteract the many myths that are associated with Gen Y, most notably that we’re spoiled, thankless brats.

While my answer was pretty short (you can read it here), I didn’t come to it easily. It has been a hard year for learning tough lessons and I can’t say that I’m happy about some of the situations I encountered. As I thought about the last year, I kept reliving some of the individual frustrations that made it difficult. I’ll admit that I also got into a bit of a “poor me” mood, rehashing mistakes and reliving decisions that, while not wrong, I might have made differently with the benefit of hindsight.

However, as I started looking at 2009 in total, I realized that I had made some considerable strides, all in the shadow of a horrible economy. I chastised myself a little bit for the woe-is-me attitude and realized that the year was actually one of the greatest opportunities for learning I’ve ever had. In addition, I got to go through these challenges while remaining gainfully employed and with the support of friends and family.

Maybe you’re a Gen Yer, maybe you’re not, but for what are you thankful in 2009? What has made this year an important one for you? What challenges and opportunities helped you grow?

But Wait… There HAS to Be More

October 28, 2009 / Albert Ciuksza / 0 Comments

It was reported today (via PopCity) that eighteen Pittsburgh companies raised $78.27 million in venture capital in the third quarter of 2009. This is obviously very good and echoes what my hunch was in my post about the feelings of optimism at AlphaLab’s Demo Day. The more money we can get across the continuum, the better, especially in the very early- to early-stage funding categories.

However, this is only part of the story. If you look at the PricewaterhouseCoopers (my spell check believes this word should be ‘slaughterhouses’, by the way) MoneyTree report (the source of the VC funding data point), you’ll find that a lot of critical investment money isn’t included in their research, including angel investment (see the criteria summary here). Obviously, the report is invaluable in allowing us to track what kind of investment activity is happening across the country, but I feel like there are some gaping holes in really being able to assess how much entrepreneurial funding activity is happening in a given area.

I suppose this is because it is very difficult to track this type of investment. For instance, a business plan project on which I worked will likely be funded within the next three weeks at about $50,000 (obviously a very early-stage investment). The individuals involved aren’t what I would consider part of the “entrepreneurial community” in the region, so no one will know about it. This also goes for another project on which I worked, which secured $500,000 in its first round; there were no trumpets sounded or press releases written, yet the company opened the offices in the heart of Pittsburgh with six new jobs within city limits.

Is the nature of angel investment such that tracking it just doesn’t work? Are angels usually uncomfortable having their investments publicly discussed? Or do many people in the realm simply not care about having this type of investment counted? While there are good arguments to be made that Pittsburgh needs more risk capital than it has available, I believe the picture has to be better than even what the PWC report says.

So, how do we keep better track of this information? How do we make it easier to brag about Pittsburgh’s entrepreneurial community?

Dunbar’s Number vs. Ambient Awareness

October 27, 2009 / Albert Ciuksza / 0 Comments

In February 2005, I was in the dining room of a friend’s house anxiously awaiting the last few seconds of the game clock to expire before I could celebrate my first Steelers Super Bowl. As soon as Coach Cowher lifted his arms in celebration, the fifty or so people gathered at the house party started to yell, cheer, hug and, in some instances, cry. While this didn’t surprise me much – as a faithful member of Steelers nation, I’ve shed a few tears myself – I was taken by the number of text messages I received from friends all over the country, many of whom I had barely spoken to since last time the Steelers were in the Super Bowl (1996). For about twenty minutes, my phone constantly buzzed with ‘Congrats’ messages. I was embarrassed by the number of replies that I sent that said, “Thanks! Who is this?”

This story came to mind when I happened upon a post by Seth Godin (thanks @paulfuriga), who had written about Dunbar’s number, a theoretical mental limit (150) to the number of people that can maintain a cohesive unit. Using the theory to reinforce his concept of tribes, he says the following:

Some people online are trying to flout Dunbar’s number, to become connected and actual friends with tens of thousands of people at once. And guess what? It doesn’t scale. You might be able to stretch to 200 or 400, but no, you can’t effectively engage at a tribal level with a thousand people. You get the politician’s glassy-eyed gaze or the celebrity’s empty stare. And then the nature of the relationship is changed.

As a result, he seems to suggest (but never says) that social media can’t really build a tribe because you/your company/your brand have to be pretty special to take the place of a friend/family member/colleague in someone’s life.

I thought about how this contradicted the concept of ambient awareness, a concept to which I was introduced in a New York Times Magazine article titled Brave New World of Digital Intimacy. The author, Clive Thompson, says:

But where their sociality had truly exploded was in their “weak ties” — loose acquaintances, people they knew less well. It might be someone they met at a conference, or someone from high school who recently “friended” them on Facebook, or somebody from last year’s holiday party. In their pre-Internet lives, these sorts of acquaintances would have quickly faded from their attention. But when one of these far-flung people suddenly posts a personal note to your feed, it is essentially a reminder that they exist. I have noticed this effect myself. In the last few months, dozens of old work colleagues I knew from 10 years ago in Toronto have friended me on Facebook, such that I’m now suddenly reading their stray comments and updates and falling into oblique, funny conversations with them. My overall Dunbar number is thus 301: Facebook (254) + Twitter (47), double what it would be without technology. Yet only 20 are family or people I’d consider close friends. The rest are weak ties — maintained via technology.

The author covers Dunbar’s number in the paragraph before, also saying that it is absolutely a limiting factor and that, in his interviews, he found that folks who are using ambient awareness tools to maintain weak ties are still living in that 150-person limit because, as he says, “deep relationships are still predicated on face time, and there are only so many hours in the day for that.”

This is where the Steelers story comes in — you build a brand and, because of the weak tie you build with the consumer, they take the effort to engage you (in my case, tracking my number down on Facebook to send me a text message). They didn’t need to know where I went to college or where I was living or what relationship I happened to be in at the time. All they knew was that I was probably pretty excited about the win and that they’d take the time to acknowledge that fact.

When I was consulting with a collision repair company, the general manager described his marketing challenge like this — you have advertise and market yourself enough for people to be aware of you in the not-so-good event that they need your services. Otherwise, who really wants to think about auto collision repair? As long as people had enough knowledge about the shop tucked in the back of their head, he figured, they would come to him when they needed his service.

Frankly, I think Seth Godin’s invocation of Dunbar’s number (despite what he says in his post, it is not a law), is misguided with respect to social media. No, I don’t think it is easy to develop that tribe and yes, in order to do so, you have to fill one of those Dunbar circle spots in someone’s awareness. But, I believe social media works because of Dunbar’s theory, not at the expense of it. Those weak ties are exactly what makes it a killer app. No, your company might not be able to build a tribe, but few products can survive by selling to only 150 people. If you’re more worried about establishing a tribe than building awareness, you’re likely to fail. However, if you focus on building valuable ambient awareness (Paul Furiga and his team at @wordwritepr are a great example), you’re able to position yourself when someone has to think about needing your product or service.

Financial Projections Made Easy (Well, Easier)

October 23, 2009 / Albert Ciuksza / 0 Comments

Something that seems to scare most entrepreneurs is figuring out how to do pro forma financial projections. It’s scary stuff — you really don’t know what the costs are going to be, what your sales are or how exactly you’re going to have the cash flow to make payroll even before you start. All you know is that you have a product idea, and maybe costs or the right price point. Beyond that, you’re really not sure.

I’m not a finance wizard, but I’ve pulled several pro forma financials together for various businesses. The long and short of it is, every investor/bank wants to see the same stuff — sales, cost of goods sold, expenses, net profit, etc. It’s not altogether difficult, but the process can be very intimidating.

I have some things that I’ve followed along the way below the fold . However, to get you started, I’ve developed a starter template that I’ve used on several projects (albeit with some significant edits) that you’re free to download (FinancialsTemplate.xls – 118kb). This should help get you started, but realize that it’s only a template and I don’t take responsibility for your final version.

Thoughts and tips are below the fold… Continue reading

The $100 Identity Start Up Kit

October 21, 2009 / Albert Ciuksza / 0 Comments

I don’t need to delve into the importance of a good marketing plan — it’s been said a thousand times by people far more talented than I. However, tactical implementation gets tough on a very limited budget. Folks in startups often believe that people (potential funders, customers, etc.) will look beyond design/collateral because the product/service is so superior, so they decide that creating a professional image is very low on the to-do list. However, the short-term cost savings can severely cost them in terms of funding and sales.

Having worked in a startup environment with very few resources, I was able to create some identity pieces and collateral that looked very professional for not a lot of money. I have incredibly high standards with respect to graphic design and print quality (true story: I will use a magnifying glass to look at how a piece is printed), so I have experimented with many solutions in order to maximize look on a dime (or penny, even). Here are my thoughts and some do’s and don’ts… Continue reading

The Entrepreneurial Test

October 19, 2009 / Albert Ciuksza / 0 Comments

This is a cool quiz written by Northwestern Mutual that’s based upon research they and others conducted regarding the traits of entrepreneurs. I highly suggest that you take a look:

http://marriottschool.byu.edu/cet/startingout/test.cfm

While I’m not surprised by my overall score (37, which puts me two over the line for an entrepreneur), I was surprised by the scoring of a couple of the questions. For instance:

Entrepreneurs are not especially enthusiastic about participating in group activities in school. If you enjoyed group activities—clubs, team sports, double dates—subtract one. If not, add one.

I was pretty active in clubs and organizations in school (band, football, theater, and spending time with different cliques), which I would expect to breed the type of leadership skills that help foster an entrepreneurial mindset. Another:

Do you believe being an entrepreneur is risky? If yes, subtract two. If no, add two.

This really confuses me — doesn’t everyone consider being an entrepreneur risky? I obviously believe that it’s a risk worth taking, but I’m still surprised by the scoring on the question.

Has anyone else taken this survey before? What are your thoughts?