1871 http://www.1871.com Where digital startups get their start Fri, 27 Mar 2015 04:32:54 +0000 en-US hourly 1 Tullman: The Perils of Selling Strategy to Big Companies http://www.1871.com/tullman-the-perils-of-selling-strategy-to-big-companies/ http://www.1871.com/tullman-the-perils-of-selling-strategy-to-big-companies/#comments Wed, 25 Mar 2015 21:32:08 +0000 http://www.1871.com/?p=12049 By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/selling-strategy-to-big-companies.html

The big guys have a knack for ... » Continue]]> By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/selling-strategy-to-big-companies.html

The big guys have a knack for stringing little guys along. Here are 5 tips to help you hold your own.

In the “been there, done that” category of mistakes that you should only make once, I would award a place of high honor to the idea that startups should spend their scarce capital and limited resources trying to “earn” their way into the hearts and wallets of big customers by selling strategy as a door opener. By “strategy,” I mean various attempts, presentations, mock-ups, etc. designed to show these big guys the disruptive and scary future–and how your company can help them successfully navigate through the coming tough times for their businesses. These attempts at show-and-tell (which are really just some smart guys showing off) almost never end well for the little guys–that’s you–and, worse yet, it deflects your best people and a lot of your focus in the wrong direction.

I realize that there’s an ego component to this stuff and also some bragging rights about who you’re pitching and getting in front of. But egos aside, the bottom line is whether anyone is going to be writing you a check any time soon. The method doesn’t work, the metrics are always muddled at best, and, for sure, the math is a killer, because you rarely get paid anything for the privilege of spending your time chasing these guys. To be successful, you need to develop, design, and incorporate your strategies and solutions into your own offerings rather than trying to use them as come-ons and commercials for how well you’ll eventually do for the customers.

And, of course, the biggest and saddest joke in this formulation is the word “selling” because–in 99 cases out of 100–startups aren’t selling anything–they’re really giving away their time, knowledge, and insights for free. You end up spending your precious time educating a bunch of folks who often turn out to be indifferent ingrates at the end of the process and politely tell you that (a) they’ve decided to do it themselves (which we all know that they can’t do–even if they steal your ideas); (b) that they’re going to do it elsewhere; or–because of fear, inertia, or ignorance–that (c) they’re not going to do it at all. And you and your team are that much worse for the wear.

If that wasn’t bad enough, you’ll also learn quickly from your investors (after a couple of these expensive adventures go nowhere) that they thought they were buying into a product or service business and not a consulting firm. They don’t want explorers and educators; they want executors. They don’t want you strategizing; they want you selling. Fully engaged in turning your ideas into invoices. They’re going to tell you that they’d rather see a month of consistent singles and doubles than wait three months hoping for a home run that may never come. As a scrambling startup, you just can’t afford that kind of investment.  So forget it. But just in case you can’t resist the temptation, here are a few things to keep in mind to help you avoid a total wipeout.

1. Don’t Get Pushed Around

The biggest bullies in big companies have the least actual power. They can say “no” all day long, but they can’t say “yes,” and they know it. They couldn’t greenlight a project if their lives depended on it–unless it happened to cost a lot less than a latte. So they spend their time taking their frustrations out on you and tormenting young entrepreneurs who don’t know any better with big empty promises of good things to come down the line. And–in the meantime–they’re only asking for the sun, moon and stars–all for free–because that’s pretty much all they’ve got to spend.

Here’s the straight dope: You don’t have to give away or prove anything to these guys because they don’t matter. Find the folks who can actually sign a check and get in front of them. They’re a lot easier to deal with and they can make a real deal happen. They’re also a lot nicer, too, because they don’t have a big chip on their shoulders. And they know that–if you want something of real value–you have to pay for it. If you pay peanuts, you get monkeys.

2. Get Profitable First

Too many complimentary pitches and big bunches of brainstorming freebies will mean too little inbound cash flow and that means trouble for any startup. You need to be sure that your sales team isn’t taking the easy way out by selling air and getting paid nothing for it. It’s not a “win” when all the commitments and all the costs are on your side of the table. The real focus needs to be on making sure that you are identifying and signing up paying customers. The size of the individual deals is nowhere near as critical as the cash. Another important bonus is that these deals don’t take as long to launch or as long to complete as many of the bigger ones might.

The truth is that you simply can’t afford to pass up the small fish while you’re waiting for the whales. Big companies are one of the last refuges of the slow “no,” and there’s just about nothing worse for a startup than that. A fast rejection is always better than being stroked and strung out by a guy who gets paid to have meetings rather than to make decisions and progress. Once you’re making more money, you can consider whether to roll the dice on some bigger proposals. Don’t be in a hurry.

3. Get a Pilot Project

Once you’re in the room, don’t leave the conversation without something. A trial, a pilot, a prototype: these are all good ways to get the ball rolling, but not for nothing. And equally important you must make sure that there’s a clear and express agreement on just what you’re committing to do and what exactly will constitute success and the steps to follow afterwards. If the metrics and measurements aren’t properly aligned and apparent, you’re as likely as not to get to the end of the project and have nothing to show for it, because you didn’t get the right rules established at the outset.  And don’t think that any agreement is better than no agreement. A bad beginning agreement can set the wrong tone for the whole relationship. And don’t think that only newbies make these kinds of mistakes. YouTube and plenty of celebrities made $300 million worth of these mistakes just a little while ago. So get something, but make sure you know what you’re getting yourself into.

4. Get Paid

If you don’t ask, you don’t get. You know what your stuff is worth (or you should) and you shouldn’t be embarrassed to say that you stopped giving it away for free a while ago. We have all heard the stories about what great reference clients some of these companies will make for your business and these tales are basically BS because everyone in the industry who matters knows that the very same guys make a habit of never paying new companies anything for the chance to test their products or services. They never pick up the check and, after a little while, they start to lose respect for the companies that keep working for free. Just like the patsy in the poker game; if you don’t know who it is after 30 minutes of playing (or too many free trials), it’s you.

5. Get Partners Who Are Already in the Door

There are a lot of big companies scared to death these days of everything digital and under tremendous pressure from their own customers and clients to figure things out in a hurry. This kind of demand would be encouraging except that these companies simply aren’t built for speed, and that’s where the opportunities are being created for clever young companies with the chops and the technology to get these kinds of jobs done quickly, relatively cheaply and–most importantly–quietly. Think of the big guys as today’s Trojan Horses. They’re already inside the walls–they have the relationships that would take you years to build with the biggest brands and players around–and they are hurting for help. They can make good partners and you can make them look good as long as you’re careful to make sure that your IP and financial interests are protected and that they aren’t selling you the same bill of goods about future fortunes.

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Tullman: Your Streaming Videos Suck http://www.1871.com/tullman-your-streaming-videos-suck/ http://www.1871.com/tullman-your-streaming-videos-suck/#comments Wed, 18 Mar 2015 18:51:17 +0000 http://www.1871.com/?p=11996 By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/your-streaming-video-sucks.html

More and more companies are posting streaming ... » Continue]]> By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/your-streaming-video-sucks.html

More and more companies are posting streaming videos on their websites. But just because the technology exists doesn’t make it good content.

Please stop streaming stuff that sucks. No one cares. No one’s watching. And, just because you can do it doesn’t mean you should. And, as hard as it may be to imagine, just because it happened to you doesn’t make it interesting to us. You’re constantly cluttering up the channels with your crap. And it seems like the spread of cheap video tools and technology isn’t helping the situation–it’s actually making it worse, because now every clown with a camera can be a digital media publisher. Technology used without talent is less than a tool–it’s a tragedy.

And even new innovations like Hyperlapse compression video, which can speed up and smooth out the video viewing (without the shakes and constant jumping around), can’t fix the presentation problem. Because when you’re watching a video of someone speaking (as opposed to watching, say, a road trip), there’s no way to accelerate the accompanying audio without the person sounding like Mickey Mouse. Media (or technology) that gets in the way of communication is less than useless.

UGC used to mean User Generated Content which contained–at least occasionally–some useful, meaningful and authentic material. Now, because of the glut of webcasts which companies are indiscriminately spewing out in massive amounts (and, frankly, podcasts aren’t typically much better), it pretty much means Unwatchable Gratuitous Claptrap.

But it doesn’t have to be that way. If the makers of these videos would only take a few minutes to put themselves in the viewer’s shoes, this problem could be easily fixed. If we need help sleeping or want to be bored to death, there’s always C-SPAN. And, as trite as it seems, we really do prefer quality over quantity–especially when you’re asking us to commit our scarce time and–even more importantly–our attention to your offerings. It’s not a volume game; it’s all about choice and value. So next time you’re getting ready to stream a talk or a panel or any other event, do us all a big favor and do these four critical things:

1. Get a producer/director

A video stream is NOT a show. Get a real producer/director (not a camera man–or, worse yet, a tripod) who actually knows that not everything that everyone does or says during a program is worth capturing for posterity, and who also knows the difference and can make intelligent choices. While you’re at it, get a second camera and a switcher, and also (if there are slides or other presentation materials) get clean, legible digital copies of those materials as well. Incorporate the audience into the shoot. Make the visuals interesting and not static. And use the zoom so we don’t feel throughout the show that we got some of the worst seats in the house.

2. Get an editor

The real value of these kinds of video-captured events isn’t the few people who watch for a few minutes simultaneously online. They will generally get bored (or go blind) fairly quickly and bail out. If there’s any lasting and archival value, it’s in what use you make of the content after the fact. And to create intelligent, informative and useful content that someone will be willing to watch, you need an editor who knows the material, understands the goals, and can turn out the kind of product that you and your organization can be proud of. Vary the camera angles, intercut the slides, add some audience reactions, etc. It’s not hard–it just takes some time and some thought. And it’s a real talent also–not just something that people learn how to do. As Liz Taylor’s seventh husband said: “I know what to do, but the challenge is to make it interesting.”

3. Give us the good stuff

Let the editor do his or her job. Cherry picking has gotten a bad name somehow, but we don’t care to watch introductions that we can read, administrative announcements for the room (and we don’t have to silence our cell phones), sponsor acknowledgments, or coming events calendars. Do you see where I’m going with this? Cut the crap and give us the beef–the good stuff–the 10 percent of the conversation that matters and from which we can learn something new. Content ultimately is cheap; wisdom is invaluable and worth watching.

4. Give us a break 

Fifteen minutes of anything today is a lifetime. We’re starting to see seven second commercials for a reason. So decide early on what the outside time limit of your piece is going to be, and then hold your editor to delivering the best material he can within those constraints. The best people will tell you that constraints encourage more creativity rather than the opposite. Think highlights and high value rather than heavy lifting. And respect the target audience’s time, above all.

When the dust settles, you’ll be sending out something that people will want to see. Don’t let your media get in the way of your message.

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Guest Blog: Building a Pitch Deck that Tells a Story http://www.1871.com/guest-blog-building-a-pitch-deck-that-tells-a-story/ http://www.1871.com/guest-blog-building-a-pitch-deck-that-tells-a-story/#comments Fri, 13 Mar 2015 19:36:15 +0000 http://www.1871.com/?p=11972 This post is part of the Hyde Park Angels Entrepreneurial Education Series, which brings together ... » Continue]]> This post is part of the Hyde Park Angels Entrepreneurial Education Series, which brings together successful, influential entrepreneurs and investors to teach entrepreneurs everything they need to know about early-stage investment through events, articles, videos, and more. If you are interested in learning more about raising a round, save the date for “Early Stage Investment 101” on June 17.


Your pitch deck is one of the most important sales tools in your arsenal. It isn’t just your means of getting investors to back you, but the actual story of your business. And to succeed, you need to be able tell a compelling story. But how do you craft a compelling story that hits on all of your most important metrics and stays high-level and succinct enough to keep your audience’s attention?

Start by Explaining the Problem and the Pain It Causes Someone Really Important
Explaining the problem is key to selling your value to investors. If there’s no pain point they can understand, they’re not going to see your business as investable. It’s your responsibility to make them feel the pain.

That means defining a very specific pain and who experiences it. Remember, the “who” is as important as the pain — someone without buying power or the ability to adopt doesn’t make a compelling character in your story. Similarly, you need to show the market size of people with that pain. Otherwise, you can’t size the problem. If you shy away from presenting the market size because it feels too small, you probably need to identify a new “who.”

Finally, once you’ve explained the pain and who and how many experience it, focus on demonstrating trends that prove the pain will either last or keep on growing. A pain that’s about to disappear isn’t interesting to investors.

Next, Demonstrate How Your Solution will Solve the Problem
This is hands-down the most important part of your pitch deck, and certainly the most important foundational element of your business. You need to be able to communicate what you’re trying to do and why it matters.

Don’t be afraid to get anecdotal at this point. You shouldn’t go overboard with emotion, but the point of storytelling is to take your audience on a journey with you, not present disjointed business facts. One way to succinctly paint a picture that shows your solution’s value is to give examples that illustrate how it will easily change behavior.

Depending on what problem you’re trying to solve and how much of your solution is ready, a sizzling product demonstration may tell a better story than your own words could. Regardless of whether you do a demonstration, knowing the technical aspects of your product can reassure your audience that you know what you’re talking about, the technology works, and you have legitimately built it. Still, always remember the key question you’re trying to answer here is: how does this product solve the problem I defined earlier in the presentation?

You should build on this idea throughout the deck by focusing on key metrics.

For Example, Metrics Illustrating Traction in the Market
We already spent time defining traction and how to identify the best metrics to show it. Showing meaningful metrics that prove your product is solving a problem and changing behavior is a necessary plot point. Three metrics you should include are:

  • Product Usage and Repeat Usage (Month over Month)
  • Customer or Partner Growth (MoM)
  • Revenue growth (MoM)

From there, you can progress into one of the most important parts of your story.

Why Your Solution is Truly Unique
Get into who your competition is, and why you’re better. Again, restate the pain and the people who experience it so you can point out how you can eclipse your competition and eat up their market share. In fact, you’ll want to demonstrate why you’re winning business away from competitors and how you will continue to do so even when your competitors ramp up to fight you.

This idea brings up a very important question: how much do you need to discuss the future?

Show a Roadmap of the Future Only if Absolutely Necessary
Your investors are thinking about the next 18–24 months before you raise again, not the next 10 years. Mapping up the future can take you down a dangerous rabbit hole that locks you into a path your audience doesn’t support, or even worse, gets you diving into the nitty-gritty of how you’re going to roll out every next step. It’s so important it bears repeating: concision is your best friend.

If you can’t stay concise discussing your roadmap, then just don’t do it. You should really only discuss your plans for the future if you believe it’s absolutely necessary for your story to make sense and resonate. If that’s the case, try sticking to these shorter-term points:

  • What are the most important steps you’re going to take to grow and improve your business in the next year?
  • What are the most important high-level next steps you plan to roll-out in the next 2 years?

Still, while you should discuss your roll-out plan sparingly, discussing the future from another perspective will buy your audience’s attention and, if you do it right, confidence.

Namely, Demonstrate How Today’s Success Will Become Future Financial Success
Projections can be dangerous territory, with a lot of them coming off to investors as completely speculative. Your goal should be to build a solid financial model that shows your logic to investors. The output of that model is your projections, and those numbers will be contested from the start. But if you build a model that you can defend and discuss, you can just input the new numbers and show your investors that you understand your business. That will help you transition into the next part of your story.

How Your Business Will Be So Successful It Exits
Investors care about returns on their investments, which means you need to show them there is an opportunity for you to exit.

Start off by discussing acquisition. By now, you’ve told a persuasive enough story that acquisition seems like a no-brainer. Name a few potential acquirers and talk about which other businesses in your space have been acquired recently and for how much.

You can also reiterate that because your business is truly solving this very big, very important pain in the market, going public is always an option. You just shouldn’t discuss it as your only option.

Now It’s Time to Convince Everyone Your Team Is the Right Team
Your story only makes sense if you have the talent to execute your solution. Highlight your current management team and their experience, accomplishments, and expertise. You’ll also want to discuss your advisors as true experts in the market.

Finally, Show How Much Capital You Need to Be Successful
Keep this short and simple: how much are you raising and what it you will use it for. Don’t include terms in your deck, but be prepared to discuss them.

And Just Like That, You’ve Put Together a Deck…
That tells a convincing, compelling story.

About Hyde Park Angels
Hyde Park Angels is the largest and most active angel group in the Midwest. With a membership of over 100 successful entrepreneurs, executives, and venture capitalists, the organization prides itself on providing critical strategic expertise to entrepreneurs and the entrepreneurial community. By leveraging the members’ deep and broad knowledge of multiple industries and financial capital, Hyde Park Angels has driven multiple exits and invested millions of dollars in over 30 portfolio companies that have created over 500 jobs in the Midwest since 2006.

About the Authors
Alida Miranda-Wolff
Alida Miranda-Wolff is Associate Manager at Hyde Park Angels. Her role includes creating and executing marketing and communications strategies, planning and managing events, fostering and maintaining community and industry partnerships, and managing membership. Prior to joining Hyde Park Angels, Alida served as a manager, data analyst, and publication specialist at a multibillion dollar industrial supply corporation. She has lead two of the most successful Kickstarter campaigns in Chicago history and worked with half a dozen startups in various marketing, content creation, and project management roles. Alida believes in creating valuable, spreadable multimedia content, and has done so as a freelance writer for several print and online publications.

Michael Sachaj
Michael is the Associate Director of Hyde Park Angels. He leads HPA’s investment opportunities through sourcing deals, conducting due-diligence, and providing oversight of the University of Chicago Booth Associate team. Michael joined Hyde Park Angels after spending three years as a strategy consultant with Booz Allen Hamilton in Washington, D.C. where he worked on a variety of process and customer service improvement efforts. He earned a BA in Political Science from Northwestern University in 2009.

Pete Wilkins
Over the past two decades, Peter has successfully founded, built, and turned around companies in the education, healthcare, and technology industries. He has also leveraged his entrepreneurial experience to help build one of the largest and most successful angel investor groups in the country.

Peter currently leads Hyde Park Angels (HPA) as the managing director. Prior to HPA, he co-founded New Futuro, a socially innovative education company helping Latino families get their students into college. Before New Futuro, Peter worked with KKR Capstone (KKR’s operations group) as President of PRIMEDIA Healthcare, where he turned around the company from record losses to record profits and built one of the premier online physician education communities. Prior to PRIMEDIA, Peter successfully served in senior sales and marketing roles for two technology startups that collectively sold for more than $2.8 billion. Peter holds a degree in business from Indiana University and graduated from the University of Chicago Booth Executive Institute.

Peter is passionate about inspiring and developing current and future startup leaders. He believes when entrepreneurs lead with purpose as their best-selves they improve their lives, their companies, and the world in incredible ways. Peter serves on a number of company, venture capital and non-profit boards and is an active advisor to many entrepreneurs. He also frequently speaks about entrepreneurship, as well as providing tailored solutions to executives and companies through the Omaxen Group.

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Tullman: How to Avoid Becoming Extinct http://www.1871.com/tullman-how-to-avoid-becoming-extinct/ http://www.1871.com/tullman-how-to-avoid-becoming-extinct/#comments Tue, 10 Mar 2015 18:51:07 +0000 http://www.1871.com/?p=11960 By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/avoid-becoming-extinct-innovation.html

Don’t let your company become a Blockbuster ... » Continue]]> By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/avoid-becoming-extinct-innovation.html

Don’t let your company become a Blockbuster Video. Here are 4 tips for staying innovative as technology–and your industry–changes.

If you haven’t been in a Best Buy store lately, you’ll be surprised to find that–almost on a weekly basis–the Blu-ray/DVD department just seems to be shrinking right before your eyes. It seems to be a flat-out race to the bottom (and to the mid-aisle disk dumping bins) between the movies and the CDs, whose in-store footprint is also approaching Lilliputian dimensions at Best Buy and other electronics retailers. (Although the decline in the audio department seems to be slightly offset by the huge growth of headphones. Thank God for Beats.)

I think that Best Buy’s management is basically giving up and conceding that they’re fighting a losing battle on too many fronts to continue the war. But they may be missing the boat because they’re playing 100 percent defense (cost-cutting) instead of trying to get ahead of the curve and repositioning themselves to serve the new needs of their customers before their remaining customers abandon them entirely. This isn’t anything new in the category of Business Management 101; the demands of customers are always changing, and you either change with (or ideally ahead of) them or your customers go somewhere else. What has changed is the speed of the changes going on and how quickly you need to anticipate and react to those changes in behaviors, attitudes, and demands.

The Tale of the Long Tail

Companies that have effective online and offline channels consistently and significantly outperform their competitors who are still using only a single channel (typically bricks and mortar). It’s all about the interplay between the channels, the mix of offerings, and, most importantly, the need to continually innovate and add new functionality, products, services, and solutions to both channels rather than starving one and trying to double down on the other. Honestly, I think that the big box retailers bought into the inevitability arguments which were constantly being promoted by Amazon’s press and PR blitzkrieg a little too soon and much too completely. As a result, now that the boat has pretty much sailed, I think we’ll see that 2015 will be known hereafter as the year in consumer retail when the “tale of the long tail” really came true. But only because the major retailers helped stage their own funerals instead of fighting back.

And, as convincing as the long tail arguments seemed to be on the surface, the infinite inventory and instant availability of the long tail were only part of the causes of the retailers’ ongoing difficulties. The hidden problem is that these freaked-out retailers are killing themselves slowly. Each concession that they make to reduce their in-store inventory exposure turns out to make the overall situation even worse. No one wants to waste a trip to the store when there’s a good chance that what they want won’t be there anyway. This is the old Blockbuster paradox coming back to life: Blockbuster always had plenty of old films–but none of that week’s hottest hits–in stock. In other words, they had everything you didn’t want and nothing you needed.

Thriving in the Instant Gratification Economy

Although we’re not watching any fewer movies or TV shows or listening to less music, we are increasingly consuming that content in virtually every manner except sitting in one place and “playing” a physical object on a fixed and immobile device. So the underlying issue isn’t decreased demand. It has a lot more to do with portability. The rise of mobile computing and the ubiquity of constant connectivity has put extra pressure on the old delivery systems and technologies, and the big box retailers haven’t done any more to address this transition than the booksellers have. In a world where everything wants to be streamed, Best Buy needs to think of its stores as digital gas stations and provide fast, cheap, and exclusive fill-ups on new music for their customers on the spot–in the store and online too. The music is the real message, not the medium of delivery. We don’t need shiny disks to share our sounds any more. Best Buy should also stick to selling things like fans and fridges, which won’t be going digital any time soon. Phones and headphones will probably sustain the company for a while, because these objects (of both necessity and desire) remain highly personal and tactile tokens in our lives. If you don’t believe me, ask yourself how reluctant you are to hand your phone to someone else.

Right now, we’re in the age of IG (instant gratification) and the immutable law of IWWIWWIWI (I want what I want when I want it). Every industry, even relatively new and fairly digital ones, will be changed significantly as we continue to move from the analog world to a world of digital everything. And new major businesses will be built in the cracks and the gaps created every time the big guys fall asleep at the switch.  Take gift cards, for example. Consider the very rapid rise of Raise, which runs an online, mobile-enabled exchange that sells partially used gift cards to consumers at a discount. And Raise doesn’t just sell you the cards while you’re sitting on the couch at home; it will sell you a Target gift card at a discount to the face amount of the card while you are standing in line getting ready to pay for your purchases at Target. Exactly what you need, when you need it, instantly.

As an entrepreneur, your job is to anticipate how these kinds of game-changing shifts will impact your business–because your business may be next in line. There are no simple answers, but there are a few things to watch for. The alternative is waiting until it’s too late, and then spending a lot of costly and painful time playing catch-up.

1. Actively manage your channels of distribution.

You need to constantly monitor and dynamically adjust your investments in each of the channels you are using to reach your customers in as close to real time as possible. And the more channels you effectively employ, the higher your likelihood of ultimate success, especially since the vast majority of digital distribution channels are relatively inexpensive to use.

2. Track the move from analog to digital.

You need to monitor the ongoing migration of the traditional products and services in your industry as they move from the analog and physical world into the new digital economy. Some of these products will survive the transition, some will morph into new offerings, and some will cease to exist, but managing the life cycles of all of them will be crucial to your success.

3. Look for new methods of distribution.

You need to watch for the emergence of new delivery channels and systems for both your own products and services and, more importantly, for the sale and delivery of competitive or substitute goods which may be better priced, more readily accessible, easier to use, or more easily incorporated into the ways in which your customers are now conducting their own businesses.

4. Pay close attention to your customers.

You need to watch for new consumer behaviors. These are probably the most difficult to anticipate, but they are also the most rapidly disruptive, because of the speed and ease with which massive numbers of consumers can migrate to new solutions with virtually no switching costs or training requirements.

The bottom line never really changes: the customer has a constantly increasing array of choices, a limited attention span, and a relatively fixed amount to spend on whatever you’re selling. The winners in the competition for those dollars will be the players who are most attentive to the customer’s changing desires and most immediately responsive to their demands.

In the end, notwithstanding the appeal and power of the long tail, it’s not a game of vast volume, it’s ultimately about the connection you build to your customers and the concrete value you deliver to them.

 

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Tullman: The Case Against Open Offices http://www.1871.com/tullman-the-case-against-open-offices/ http://www.1871.com/tullman-the-case-against-open-offices/#comments Wed, 04 Mar 2015 23:32:27 +0000 http://www.1871.com/?p=11921 By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/the-case-against-open-offices.html

A workplace where you can’t get any ... » Continue]]> By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/the-case-against-open-offices.html

A workplace where you can’t get any serious work done isn’t a workplace–it’s a bad joke.

I love the constant frenzy of activity at 1871’s front door. There are more than a thousand people a day regularly passing through it. There are visitors stopping by for a press conference or to attend a class, lecture, or luncheon, and hundreds of generous professional mentors who drop in for scheduled office hours or workshops with the member companies of the incubator. Visitors love the buzz and the contagious enthusiasm of so many entrepreneurs of all ages who are actively engaged in inventing the future.

But for our full-time members who regard 1871 as their day-to-day place of business, it’s increasingly a different story. They’re more concerned with taking care of business, and it turns out that that’s not as easy to do as you might think in the middle of an entrepreneurial petting zoo. So we’ve decided to start restricting the scope, duration, size, and volume of the constant tours at 1871 in order to reduce the traffic and distractions.

You may think this doesn’t have much to do with you or with the issues you have in your own business. But, as we’ve listened to our own “customers,” we’ve begun to discover that there’s a bigger issue at work here. And it’s applicable to millions of businesses which have moved–over the past 10 years or so, with the encouragement of architects and designers and social scientists–to floor plans and office configurations that are increasingly free-form and wide open.

What we’ve discovered in our own conversations with our members is simple. Open is over. The theory that wide-open spaces would do a world of good for improved communication, dramatically increase serendipity, and promote the sharing of just about everything–not to mention having the additional appeal of reducing the costs of constructing tons of private offices–turns out to be just the latest triumph of form over function. What we’re finding is that a workplace where you can’t get any serious work done isn’t a workplace–it’s a bad joke. Call me a curmudgeon, but I don’t really want to hear every morning–immediately upon their staggered arrivals–a report for the “group” from each of my co-workers about their nightly clubbing, consumption, and conquests, even if I cared. But, as often as not, I don’t have a choice.

Anyone with the slightest powers of observation can see that it’s a fool’s game to try to have a private conversation or conduct any serious business when you’re sitting in a place that sounds like a supermarket on Saturday morning or Chuck E. Cheese at Christmas. Headphones may help, but they’re their own source of fiddling and distraction, and they put an end to any pretense that there’s going to be more communication between seatmates when the whole world is individually wrapped up in little audio wonderlands.

The fact is that we’re watching more and more pilgrimages where our people pick up their laptops and wander–wasting precious time–in search for a respite from the roar and a place where they can hunker down and get something done. These sad sojourns for solace and silent spaces are actually pretty clear statements that we need to rethink the latest spatial strategies and–at a minimum–start thinking about segmenting and segregating spaces (think “no cellphone” zones). There’s something frighteningly productive about a little peace and privacy that we’ve seemingly lost sight of.

And we should also put to rest this utter canard that younger team members have some mystical multitasking power that permits them to shut out all the noise and other distractions and yet still lets them benefit from the joys of sharing and constant community. Multitasking is a fiction foisted upon folks who just don’t know any better. It’s doing a mediocre job at a multitude of things rather than doing a deep and productive (and focused) dive into something that you actually need to get done and done well.

It may be that part of the multitasking confusion comes from the fact that the newer people have never known any other way of operating, and that they are less insistent on the levels of productivity that we have taken for granted. But if that’s the case, it’s on us to fix it before things get worse and we start settling too often for getting something done when the goal should be getting it done when it needs to get done–and as well as it can be done–all the time.

We can’t blame all of these concerns on our spaces, but addressing what we can change is a good start. I appreciate that there are probably appropriate common areas where it still makes sense to encourage interaction and random activity–intersections and interchanges where potentially additive and informative encounters are encouraged–and even places (within places) where you can temporarily opt into the congestion, conversation, and community if you wish.

But no business today can afford to be Times Square everywhere all the time. Open is over.

 

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Code Fellows Launches Advanced Programmer Training in Chicago’s 1871 http://www.1871.com/code-fellows-launches-advanced-programmer-training-in-chicagos-1871/ http://www.1871.com/code-fellows-launches-advanced-programmer-training-in-chicagos-1871/#comments Tue, 03 Mar 2015 16:11:42 +0000 http://www.1871.com/?p=11912 FOR IMMEDIATE RELEASE

Contact:

Tailwind PR
Jeff Pecor
jeff@tailwindpr.com

1871
Melissa Wooten
press@1871.com

 

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FOR IMMEDIATE RELEASE

Contact:

Tailwind PR
Jeff Pecor
jeff@tailwindpr.com

1871
Melissa Wooten
press@1871.com

 

Code Fellows Launches Advanced Programmer Training in Chicago’s 1871

Digital Trade School Brings JavaScript Development Accelerator to Midwest Tech Hub

 

CHICAGO and SEATTLE – March ##, 2015Code Fellows, a Seattle-based digital trade school, today announced that it is expanding its operations into Chicago – one of the nation’s fastest growing and most vibrant tech communities – via 1871, Chicago’s entrepreneurial hub for digital startups. Code Fellows will offer its intensive, eight-week Full-Stack JavaScript Development Accelerator course, designed to teach programmers with approximately 2 years of experience in web development how to advance their careers with some of the top tech companies in Chicago. Graduates of the Development Accelerator are guaranteed a job offer within 9 months of completing the course, or Code Fellows will refund the tuition. The first Chicago-based Development Accelerator course will take place May 11 – July 3. Will Little, Co-Founder and CTO of Code Fellows, recently re-located from Seattle to Chicago to oversee the expansion of the digital trade school in this Midwest tech hub.

“The Development Accelerator in Chicago is a unique opportunity for experienced JavaScript developers to get the advanced training they need to further their careers and establish the inroads to new job opportunities with area tech companies,” Little said. “We’re helping students level-up their skills and prepare to excel within high-quality engineering teams. This not only means teaching the technical skills, but also the product, business, and professional skills that are required to succeed in today’s tech companies.”

The Full-Stack JavaScript Development Accelerator goes in-depth into the core competencies of JavaScript, object-oriented programming, and functional programming. Students get hands-on practice in test-driven development, front-end libraries, and frameworks with agile tools and best practices. The first four weeks focus on building back-end web applications with Node.js. During weeks 5-8, students learn to build web apps with AngularJS, a front-end framework created and maintained by Google engineers.

“Chicago is home to some of the most well-known technology companies like Groupon, Orbitz and Cars.com – but it continues to expand and develop, yielding new, lucrative career opportunities to top programming talent,” said Kristin Smith, CEO of Code Fellows. “We hope to play a pivotal role in Chicago’s technology community by fostering the critical development of the area’s brightest programming minds, and helping the city’s most innovative companies connect with them.”

According to Built In Chicago, there are now more than 2,100 digital companies in Chicago – and within the last three years, the number of jobs in technology has nearly doubled. In particular, a recent AngelList study revealed that jobs for people skilled in JavaScript were, far-and-away, the most plentiful as JavaScript is the dominant programming language choice for startups today.

“Code Fellows will serve as an important part of Chicago’s startup ecosystem by cultivating professional programming talent that can sustain the city’s growth as a tech epicenter,” said 1871 CEO Howard A. Tullman. “We’re excited to be a part of the organization’s launch in Chicago, and we look forward to seeing them thrive as part of our tech community.”

Code Fellows – which launched in Seattle in January 2013, then expanded in Portland in September 2014 – has graduated 340 software engineers from its full-time Development Accelerator program with an average starting salary of $75,600 per year. The top reported salary offer for a Code Fellows graduate has been $155,000 per year.

“Chicago is just beginning to mature as a tech center, so the demand for elite talent will only continue to rise,” said Craig Ulliott, CTO & VP of Product for Belly. “JavaScript programmers, particularly those with an advanced understanding of the programming stack, are already difficult to find – so we’re happy to see Code Fellows launching in our back yard.”

Code Fellows will also be hosting two individual Open House events at 1871 on Thursday, March 12th at 6:30 pm CT, and on April 16th at 6:30 pm CT. To learn more, or to apply, visit http://www.CodeFellows.org.

About Code Fellows

Code Fellows is a Seattle-based digital trade school that guarantees high-paying job offers after successful completion of its Development Accelerators. Their staff, students, and alumni are passionate about helping individuals, communities, and organizations thrive by providing world-class technical education, career coaching, and job placement services. To learn more about Code Fellows, visit http://www.codefellows.org.

 

About 1871

1871 is the home of more than 325 early-stage, high-growth digital startups. Located in The Merchandise Mart, this 75,000 square foot facility is also the headquarters of nationally recognized accelerators, Techstars Chicago and Impact Engine; half a dozen industry-specific incubators in key areas such as real estate, education technology and the Internet of Everything; several emerging tech talent schools (The Starter League and the Startup Institute), and the state’s leading technology advocate, the Illinois Science and Technology Coalition. It is the second home to Chicago-based VCs, Pritzker Group, MATH Ventures, Hyde Park Angels, OCA Ventures, OurCrowd and Chicago Ventures, as well as satellite offices for Northwestern University, University of Illinois, University of Chicago, Loyola University, Illinois Institute of Technology, and DeVry. 1871 has fast become recognized as the hub for the city’s entrepreneurial/technology ecosystem and has been featured in TechCrunch, Wall Street Journal, New York Times, Chicago Tribune and Crain’s Chicago Business among other top media. 1871 is the flagship project of the Chicagoland Entrepreneurial Center.

 

 

 

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Guest Blog: Is Your Business a Venture? http://www.1871.com/guest-blog-is-your-business-a-venture/ http://www.1871.com/guest-blog-is-your-business-a-venture/#comments Fri, 27 Feb 2015 19:35:12 +0000 http://www.1871.com/?p=11894 This post is part of the Hyde Park Angels Entrepreneurial Education Series at 1871, ... » Continue]]>

This post is part of the Hyde Park Angels Entrepreneurial Education Series at 1871, which brings together successful, influential entrepreneurs and investors to teach entrepreneurs everything they need to know about early-stage investment through events, articles, videos, and more. If you are interested in learning more about whether to raise a fund, register for “Are You Ready to Raise?” on March 5.


Before you begin the long, complicated quest for investment, you need to make sure it’s the right decision for your business. There are a lot of questions to ask yourself when deciding whether to raise a round, but here’s the most basic: is this a venture? Not every business is. In fact, some of the best businesses — ones that address underserved needs, boast the highest caliber teams, even bring in constant revenue streams — are not.

VC’s are looking for concepts and companies with hyper-growth potential — those with the possibility of getting to $100M in annual revenue relatively quickly. So how do you know if you can get to that kind of revenue?

The question boils down to market size. You have to find your total addressable market. Don’t size it to reflect what you think investors want; that’s a classic mistake entrepreneurs make. Start with the truest assessment you can. Remember, you’re doing this to make the right decision for your business, which means you need to stay objective. You can think about investors later.

How to Find Your Total Addressable Market

Let’s say you’re in the children’s clothing resale business, like our portfolio company, MoxieJean. Your business is focused on the U.S., middle income families, and children ages 0–14. The first step is to figure out how big the children’s clothing market is since that’s your largest addressable market.Determine how much it costs to raise children in middle income families from the ages of 0 to 14.

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Now that you know how much families spend on raising children, go a step further. What percentage of the total cost of raising a child is spent on clothing?

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From here, you can determine how much middle income families spend in dollars on children’s clothing.

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Total expenditures amount to $14,189, so annual average expenditures amount to $946.

Now you can extrapolate what average yearly expenditures mean for the entire U.S. population. Since U.S. births totaled approximately 4 million in 2010, you can estimate that there are approximately 60 million children ages 0–14. So:

Annual Children’s Clothing Market Size (Ages 0–14) is: 60M x $946 =$56.76B.

Round that up to $57B and…you’re still not done.

Remember, this business is not just for children’s clothing, but resale. In other words, you need to size your market down.

What matters most for you is how much your annual average cart size is. Let’s estimate that number at $100.

Your Total Addressable Market is: 60M x $100 = $6B.

Except, that’s not a realistic sizing. It’s highly unlikely you will capture 100% of your target market, especially since the first sizing you did was for the total children’s clothing market, not the used clothing market. So let’s assume that this is an extraordinary business with a better user experience model than the biggest resaler, eBay. You’ll say you can capture 20% of this market.

Your (Adjusted) Addressable Market is: 60M x $100 x 20% = $1.2B.

What have you learned? You’re playing in a $57B market, your total addressable market is $6B, and your market share will probably hover around $1.2B. So, is this a venture?

Is Your Total Addressable Market Big Enough?

This part is a lot less scientific. In fact, depending on what kind of investors you’re looking to work with, this number changes by the hundreds of millions.

The golden number for mid-stage investors generally lands at $1B or more.$1.2B would make sense as a venture for angel groups and venture funds. Early-stage investors would look for less, as small as $500M.

But let’s say you’d done all of this sizing and landed at somewhere between $30M and $50M. That isn’t half bad. Just because your business isn’t a venture doesn’t mean that it’s not a great company. In fact, you might end up making more and keeping more control than you would have otherwise.

About Hyde Park Angels
Hyde Park Angels is the largest and most active angel group in the Midwest. With a membership of over 100 successful entrepreneurs, executives, and venture capitalists, the organization prides itself on providing critical strategic expertise to entrepreneurs and the entrepreneurial community. By leveraging the members’ deep and broad knowledge of multiple industries and financial capital, Hyde Park Angels has driven multiple exits and invested millions of dollars in over 30 portfolio companies that have created over 500 jobs in the Midwest since 2006.

About the Authors
Michael Sachaj
Michael is the Associate Director of Hyde Park Angels. He leads HPA’s investment opportunities through sourcing deals, conducting due-diligence, and providing oversight of the University of Chicago Booth Associate team. Michael joined Hyde Park Angels after spending three years as a strategy consultant with Booz Allen Hamilton in Washington, D.C. where he worked on a variety of process and customer service improvement efforts. He earned a BA in Political Science from Northwestern University in 2009.

Alida Miranda-Wolff
Alida Miranda-Wolff is Associate Manager at Hyde Park Angels. Her role includes creating and executing marketing and communications strategies, planning and managing events, fostering and maintaining community and industry partnerships, and managing membership. Prior to joining Hyde Park Angels, Alida served as a manager, data analyst, and publication specialist at a multibillion dollar industrial supply corporation. She has lead one of the most successful Kickstarter campaigns in Chicago history and worked with half a dozen startups in various marketing, content creation, and project management roles. Alida believes in creating valuable, spreadable multimedia content, and has done so as a freelance writer for several print and online publications.

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Tullman: How to Protect Yourself Against the Big Guys http://www.1871.com/tullman-how-to-protect-yourself-against-the-big-guys/ http://www.1871.com/tullman-how-to-protect-yourself-against-the-big-guys/#comments Tue, 24 Feb 2015 18:11:39 +0000 http://www.1871.com/?p=11875 By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/protect-your-startup-from-big-competitors.html

The big corporations may have lots of ... » Continue]]> By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/protect-your-startup-from-big-competitors.html

The big corporations may have lots of cash, but they are slow and lumbering, like elephants. Here’s how to make sure you don’t get crushed.

I have a pretty simple test for determining whether whatever you’re doing has the makings of a real business–or whether it’s just an expensive hobby or a solution in search of a problem. If you can’t quickly show me how you’re saving me time, saving me money, or increasing my productivity, I’m going to be showing you the door. Not because I’m rude, but because the first step in the long road to getting paid is identifying real pain points and creating practical solutions that someone’s willing to pay you to provide.

Now, I understand that this is more of a modest Midwestern approach than you might find on the Left Coast, but I’m good with that, because I’m not looking for the next billion dollar baby. There are way too many easier ways to go and a lot more low-hanging fruit. I prefer business plans that demonstrate great returns for investors on exits of $100 million (or thereabouts), to moonshot stories about billions to be made on some crazy bionic baby food.

Once you’ve identified the problem and are on your way to solving it for your target customers, you’ve got to make sure that you’re in the “need to have” and not the “nice to have” category, or you’ll be wasting a lot of time and money. As often as not, the biggest hurdle isn’t even coming up with an elegant and cost-effective solution; it’s getting people to accept the prospect of change and to adopt your answer to the problem. Sometimes even serious savings won’t overcome the comfort and security that comes from staying with the same old solution.

Lately, I’ve found that even the mission-critical business ideas that make it through my first set of filters have to address another elephant in the room: the question of whether this startup is building something that’s going to become a free-standing and independent business or whether it’s developing a great feature that is going to be swallowed up, ripped off, or rolled over by one of the big guys in their space in the near future. Here’s the truth: all the bells and whistles in the world won’t save a partial solution. You need to ask yourself the hard questions now so that you can get busy and figure out how to position your business on the strategic roadmap with the big guys–without ending up as road kill.

And, in case you were wondering, this isn’t a new problem or question. And some of the players to watch out for are the same big guys from 10 or 20 years ago (Microsoft, Oracle, AT&T, etc.) who are the long-entrenched stakeholders and “powers-who-be” in your space–not because they’re great innovators or disruptors, but because: (a) they’re increasingly well-informed about who’s doing what very well (damn those demo days); (b) they’re fairly fast followers with great gobs of money; and (c) they have the people, resources, and patience to hang around and keep buying and trying until they eventually get things right in the long run.

The only good news about the big guys is that there is another group of them (think AOL and Yahoo for starters) who are so lost, so behind the curve, and so desperate to deliver something for their shareholders that they are constantly running around and throwing money at the shiniest new things in a panic. And–if you can stand the short term pain and the forced smiles (until you take your money and leave to start your next business), you should think about taking a bunch of their money to build your own war chest before they wake up and smell the coffee and are replaced by the next savior CEO.

On the other hand, if you’re interested in staying the course, there are a few things to keep in mind in building your business among the big guys.

1. Be like a black box.

Due diligence can be a double-edged sword, and you have to be very careful about over-educating your potential acquirers who are also your likely competitors. This is a very slippery area, and it reminds me of the disappointment and disillusionment people feel when they learn how a magic trick was done. You never say: “Wow, what a wonder that they were able to fool us so completely.” You say: “Aw, that’s so easy anyone could do it.” The same thing happens when you pull back the curtain too soon and let the seekers see your secrets. The most typical reaction is for these folks to conclude that–with the right amount of time and money–they could readily rip off your ideas and do it themselves. The good news is that they are generally wrong about that, but the bad news is that it often kills the deal before they learn that very few things are as easy to do as they are to talk about.

2. Be so good that they can’t ignore you.

The bar today in big companies for implementing even modest innovations is pretty low. By and large, these guys are moved by external demands far more often than any internal movements for change. They’re still stuck in the mode of trying to save their way to success. They typically react (slowly at best) to three outside drivers: (a) their competition brings a new offering to market, and they need a quick competitive response; (b) their customers see and begin to adopt new processes and solutions, and the customers demand that their products and services conform to the new ways of doing business; or (c) they see a new tool, product, or service in the market offered by a new player and they quickly determine that this is a game-changer which they need to own (rather than try to build themselves) because they lack the internal capacity to do otherwise. If you’ve built something that good, there’s no better place to be.

3. Be so cheap that they can’t bear to build it themselves.

I’m not a big fan of the whole lean startup thing or even minimum viable products (MVPs) unless they’ve been previously market-validated, but there is a clear virtue in representing an initial solution which a company can quickly buy and bring to market–even if it’s not comprehensive, industrial strength or the whole enchilada on Day One. Because you’re being compared to the substantial internal costs and additional headcount (which will likely be a multiple of what you’ve spent or hired) which any acquirer would have to incur in order to replicate your product or service, even if they are already essentially in your space or business. They know it’s a painful process today to add people to any business, and they also know that the only thing worse than making a headcount request is to try to tell their internal development team leaders that they have to add a new project. By and large, the big companies today are so bound up in trying to address enterprise concerns and fix legacy issues that they have very little time for new projects and products. That’s why buying a startup (as long as the entrepreneur isn’t a pig on valuation) is so much better for them in many cases. Just one head’s up, though, if you’re the guys being bought: Keep your bags packed, because once you’re inside the place, you’ll quickly find that you’ll have no more ability to command additional resources than the guys who were there in the first place. Worse yet–they may try to use your team and whatever resources you do have to solve their other problems instead of building your business.

4. Be so fast and agile that they can’t keep up.

Like elephants, big businesses have long memories. But, because they’re totally consumed in the process of keeping themselves fed every day, they have little interest or ability to look or think ahead–and virtually no appetite for changing the status quo. Today, however, speed and agility are everything and their sheer size is often an albatross that these companies have to drag forward as well as an impediment to course corrections and competitive responses. The one virtue of startups that these big companies do seem to value and appreciate above all (and one that makes acquisitions so attractive rather than internal R&D efforts) is the freedom we have to embrace rapid change, the ability to adapt and pivot, and the understanding that things may never be perfect at the start, but that you’ll never get started at all if you wait until they are.

5. Be so spread out that you can’t be easily swatted.

I don’t really believe that any startup should get so far out ahead of themselves that they’re “a mile wide and an inch deep,” because there are huge execution risks in terms of support and maintaining effective connections to your customers. That said, there are exceptions to any rule and–in the case of presenting your business to the big guys–because they bring their old attitudes and ways of doing business to the bargaining table with them–it can be a big deal to look a lot bigger and broader than your business really is. This is because they still think of geographic expansion as a costly “bricks and mortar” kind of roll-out process, and they just don’t get the cloud and the fact that there are very modest costs to distributing almost anything digital today to everywhere in the world. So to them the fact that you’re 5 minutes old and already in 50 countries seems like a substantial and valuable accomplishment (which they do know would cost them a bundle in their own organization to duplicate) whereas, to your team, it’s just a fact of digital life.

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Tullman: 4 Lessons from Shinola http://www.1871.com/tullman-4-lessons-from-shinola/ http://www.1871.com/tullman-4-lessons-from-shinola/#comments Wed, 18 Feb 2015 18:41:12 +0000 http://www.1871.com/?p=11852 By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/4-lessons-from-Shinola.html

Shinola founder Tom Kartsotis spoke with the ... » Continue]]> By 1871 CEO Howard A. Tullman. To view the original blog, visit: http://www.inc.com/howard-tullman/4-lessons-from-Shinola.html

Shinola founder Tom Kartsotis spoke with the entrepreneurs of Chicago’s 1871 incubator about how he brought manufacturing back to Detroit.

Tom Kartsotis and his brother Kosta built Fossil from scratch into a global lifestyle brand and public company with 14,000 employees. They started in 1984 (around the time Tom dropped out of college and was scalping football tickets in Texas). Thirty years later, Fossil sells $3.2 billion worth of bags, watches, and clothing a year and has a market cap of more than $5 billion.

Tom retired as chairman of Fossil in 2010, and these days Kosta runs the business while Tom (through his private equity firm, Bedrock Manufacturing) has turned his primary attention to a new venture: Shinola, an analog watch manufacturing and marketing start-up in a profoundly digital world. With seven retail stores, close to 400 employees making great wages, and an exploding online demand for products which now include multiple lines of watches, high-end bicycles, and other accessories, Shinola is well-positioned to help bring Detroit back and to create the next big lifestyle brand. And, amazingly enough, it’s really just getting started.

The Kartsotis brothers are pretty private guys who rarely–if ever–talk to the press. They understand the power and importance of getting their brand and their story out there, but they prefer to do it guerilla-style and face-to-face, rather than through the traditional channels. Recently, Tom and some other key members of his team (including Shinola president Jacques Panis) agreed recently to sit down with me and a couple of dozen entrepreneurs in our Chicago startup incubator, 1871, to give us the inside scoop on Shinola and how it’s helping to remake Detroit from the inside out.

Tom shared some of the lessons he and his team have already learned (as the company nears its third year of existence) in building a “new” manufacturing business in an era of high-tech and digital everything. He also talked about the size of the opportunities they see ahead of them and the market gaps that they are targeting. Plus, he answered a bunch of questions from the founders of some of our own most exciting startups. There were plenty of concrete take-aways that were relevant to every entrepreneur in the room, and I’ve summarized a few of the most important ones below.

“I Wish I Could Say That We Had a Plan.”

Sometimes you just have to get started and have confidence that–with a lot of effort and persistence–you will get there, even when you’re not exactly sure where “there” is. It helps a lot to have a vision and a compelling story. Shinola is about pride and craft, making things that matter and last, and honoring the past as well as the future. It’s a no-nonsense notion combined with a lot of nostalgia, and it’s the real deal. No one believed the Shinola team when they explained what they intended to do (start a watch factory in a 100-year old office building in Detroit). Tom thinks there are still some folks out there shaking their heads, but now they’re wearing Shinola watches and riding their Runwell bikes. Tom also noted that, for any entrepreneur, there will surely be bumps in the road and false starts which you’ll simply have to manage through. He said his team had had plenty of hiccups, but they just kept their heads down and plowed ahead. Nobody ever said building a new business was easy.

“If We Take Care of Our People, They’ll Take Care of Our Customers and Our Business.”

Shinola pays its people well; provides amazing medical benefits; and even pays them above-market wages while training them right in its own factory. All workers spend time in the company’s retail stores, because listening to the customers is the best feedback you’ll ever get. But–far more importantly–Shinola’s management team believes (and shows everyone) that anyone can succeed if they’re willing to work hard and put in the time and effort that is required. The company celebrates its successes and some of the most important team members–who started with Shinola as guards, janitors, delivery people, etc.–are now in charge of critical parts of the operations and are continuing to grow and learn more every day. Success breeds success, and believing that your people are your most important asset (and that they can always be better) is the only way to keep raising the bar.

“We Start With the Best Product We Can Find (or Imagine) and Then Make the Numbers Work.”

If you aim for the stars, you very often get there. If you ask people why not and why something can’t be done a new way; you’d be surprised how often you get the answers and the results you looking for. The Shinola team brought in the best Swiss watch builders in the world to train their people. They built a first-class factory that’s as clean as a surgery suite. And they guaranteed their products for life. These aren’t tentative commitments–these guys are all-in, but they also understand that they’ve got to make the numbers work for the long term so that the businesses can scale. It’s reverse engineering on steroids and a fierce attention to every production detail and source of materials. And this is opening up new opportunities for the company and its many U.S.-based supply partners. Shinola’s team believes that their people can learn to build better products at competitive costs with far higher quality in Detroit than are now being manufactured anywhere else in the world.

“If Your High Prices are Propped Up by Huge Marketing Spends, You’re Ripe for Disruption.”

The traditional high-end luxury watch industry has benefitted from enormous mark-ups and margins which are largely dependent on the manufacturers’ very substantial brand advertising and marketing spends. Shinola saw an open space in the market and an opportunity to offer a high quality product at price points that were still very profitable and yet only a fraction of those prices of traditional brands with massive ad campaigns. The Shinola team believed that you can make a great product and a great living (and even give back to your community) without being greedy and taking advantage of the consumer. These days the Shinola watches are the entry point into the higher-end, luxury watch sector of the business even while they are also seen by consumers as solid, workman-like, precision products suitable for everyone.

It’s not easy to be all things to all people, but it appears that everyone knows and loves Shinola.

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Google for Entrepreneurs Selects 1871 Member Company inRentive to Pitch at 2015 Demo Day http://www.1871.com/google-for-entrepreneurs-selects-1871-member-company-inrentive-to-pitch-at-2015-demo-day/ http://www.1871.com/google-for-entrepreneurs-selects-1871-member-company-inrentive-to-pitch-at-2015-demo-day/#comments Tue, 17 Feb 2015 22:01:41 +0000 http://www.1871.com/?p=11844 FOR IMMEDIATE RELEASE

February 17, 2015

CONTACT

1871

Melissa Wooten

press@1871.com

 

Google for Entrepreneurs Selects 1871 ... » Continue]]> FOR IMMEDIATE RELEASE

February 17, 2015

CONTACT

1871

Melissa Wooten

press@1871.com

 

Google for Entrepreneurs Selects 1871 Member Company inRentive to Pitch at 2015 Demo Day

1871 member company inRentive will compete in the second annual Demo Day for the Google for Entrepreneurs North American Tech Hub Network

CHICAGO (February 17, 2015) — Google for Entrepreneurs announced today that inRentive, an 1871 member company that helps leasing agents more effectively list rental properties, will compete in the 2015 Google for Entrepreneurs North American Tech Hub Network Demo Day. inRentive and other companies selected from across the network will travel to Google Headquarters in April to pitch their businesses to top investors.

“1871 is constantly working to curate resources and create opportunities that help our member companies succeed,” said 1871 CEO Howard A. Tullman. “I first spent time with the inRentive team in London during Tech Week in Shoreditch, where we visited Google’s new London co-working space. Google for Entrepreneurs has been an incredible partner, and their North American Tech Hub Network continues to provide unique opportunities to 1871’s member companies. We wish inRentive the best of luck as they make their pitch at this year’s Demo Day, and we will be there to cheer them on.”

Google for Entrepreneurs selected technology startups from across North America to compete in their second annual Demo Day. These startups will travel to California from March 31 through April 2, where they will pitch their businesses to venture capitalists and other leaders in the technology industry. Each of the competing startups is required to be headquartered in the United States and actively raising a Series A between one million and four million dollars. Last year, 1871 member companies MarkITx and WeDeliver each won $100,000 investments from Steve Case for their pitches.

“We are thrilled to have the opportunity to pitch our business at this year’s Google for Entrepreneurs Demo Day,” said Melissa Moline, co-founder and CEO of inRentive. “inRentive’s property management system provides an important new tool for the real estate industry, and we look forward to highlighting 1871 and Chicago’s innovative startup ecosystem as we showcase our platform.”

inRentive is a marketing content management platform that allows managers of rental properties to effectively list information about their properties. inRentive integrates with existing property management software and imports pricing and availability information. The platform then gives managers tools to easily and quickly build up information on their properties, including floor plan-specific photo capture, powerful editing tools, and SEO-friendly photo tagging. After the property information is collected, inRentive provides powerful self-publishing tools to control the flow of information to rental websites and listing services. inRentive also facilitates publishing to channels like Facebook and Craigslist, creating a central place for property managers to control their marketing information. inRentive joined 1871 via Techstars, one of 1871’s top accelerator partners.

In September 2013, Google for Entrepreneurs launched a network of partnerships with eight coworking and accelerator spaces around North America. In addition to 1871 in Chicago, the network now includes incubators in Austin, Denver, Detroit, Minneapolis, Montreal, Nashville, Raleigh-Durham and Waterloo. Created to help local startup communities thrive, the Google for Entrepreneurs network assists tech hubs by providing them with technical content, business tools, and infrastructure upgrades so that they can support increasing demand from developers and startups.

About 1871

1871 is the home of more than 325 early-stage, high-growth digital startups. Located in The Merchandise Mart, this 75,000 square foot facility is also the headquarters of nationally recognized accelerators, Techstars Chicago and Impact Engine; half a dozen industry-specific incubators in key areas such as real estate, education technology, food and financial technology; several emerging tech talent schools (The Starter League and the Startup Institute), and the state’s leading technology advocate, the Illinois Science and Technology Coalition. It is the second home to Chicago-based VCs, Pritzker Group, MATH Ventures, Hyde Park Angels, OCA Ventures, OurCrowd and Chicago Ventures, as well as satellite offices for Northwestern University, University of Illinois, University of Chicago, Loyola University, Illinois Institute of Technology, and DeVry. 1871 has fast become recognized as the hub for the city’s entrepreneurial/technology ecosystem and has been featured in TechCrunch, Wall Street Journal, New York Times, Chicago Tribune and Crain’s Chicago Business among other top media. 1871 is the flagship project of the Chicagoland Entrepreneurial Center.

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