Yes, I do realize that I’m probably far more excited about our new website coming on line than is normal. Several points here on a Friday night:

  1. I completely disagree with those entrepreneurs who say, “You sell the sizzle not the steak” when what they mean is that they really don’t have a good product but just a good story a.k.a. a line of bullshit.
  2. I think we have benefited from never hiring anyone in our company who has experience as a middle manager.
  3. You’re better off having a great product and a lousy website than the other way around.
  4. Not having too much money can be a benefit when starting a business.

steak

Thanks to Jon Sullivan for the yummy steak photo

Back in the paleolithic era when I was in undergraduate marketing classes, they drilled into us the four P’s – product, price, promotion and place. There were lots of things I learned in business school that I disagreed with, but one I have found to be true to this day is that the most important of those four P’s is product. If your product is terrible, you may get people to buy it once if it’s cheap enough, they live close enough or you advertise it enough, but they aren’t going to buy it again.

Since we began 7 Generation Games, our priority has been making math awesome. Our first game had a lot of problems, many of them due to incompatibilities with web browsers, being stopped by school district firewalls. Ever call technical support and the person on the other end of the line says to you,

“Well, it works on my computer.”

Yeah, it was like that.  So, we have been working like crazy to add every feature, correct every bug reported by our infinitely patient and wonderful alpha and beta testers (we love you guys). We still have, literally, hundreds of improvements we want to make, and I expect we always will.  I work on them every day. Spirit Lake: The Game works. It doesn’t crash, it has lots of math and kids like to play it. Fish Lake is in process. Making a good game was our highest priority and still is. We just hired another developer (yay!) to help us out, are ramping up the artwork for the next two games, hired people as testers, an audio engineer …

Now that we have more people working in our company we have started to implement some actual policies and procedures. We have a git repository, use a source management system, an issues tracking system, file sharing system. We signed up for Amazon Web Services, Google Apps for Work, basecamp, some payroll system Donna manages - a lot of stuff I thought would be useless for us at the beginning. This is why I am glad we never hired anyone who had been a middle manager – because I was right. That stuff would have been useless for us at the beginning. It would have wasted our time and kept us from doing the most important work of making a good product. When do you add that layer of management? When you find yourself swearing,

“Damn it, we NEED a way to make sure you’re not copying over the changes I just made!”

When you only have two people working, and both in the same house, one can holler upstairs to the other,

“Hey, I’m working on level 4 today, okay? So, don’t touch it.”

At that point, you don’t need version control. Now, we do. When we did hire a project manager, we hired someone who had run a small business for ten years who shared our idea of having the degree of management you absolutely need and no more.

Finally, finally, finally, we are updating the 7 Generation Games website which, I believe, Maria originally put together in four hours one afternoon. It isn’t as if we didn’t know it needed a huge improvement. We believed our less than infinite time was best spent improving the game, meeting with customers, getting their feedback, designing more levels. We’re a small company. At Unite 2014, I attended a session where a developer mentioned they had 50 people working on their game for 2 1/2 years and it still wasn’t finished – that’s 125 person-years!  That’s just people making the game – not managers, marketing, accounting. We’ve spent something more than 2.5 person-years developing ours, which explains why we constantly feel like we need to put every spare second into development.

Having the luxury to worry about the website says something about how we have matured as a company. With new people hired to take the non-development work off of us and additional people picking up some of the development work, we no longer can say,

“Having a spiffy new website is the least of our problems.”

In fact, it’s been bugging the hell out of me for a few months now. Did I feel bad about it? Yes. Like the source management system, when it got to the point where it felt like,

“Damn it, we need this!”

instead of,

“Brother, I got 99 problems and that aint one of ‘em”

that it was time to get it done.

I’ve had people tell me that we should have been working on our website with bells, whistles and gold tassels before now because “VCs won’t be impressed if you don’t have a professional website.”

Hmm. Not sure VCs will be impressed if you don’t have a product, either. I know companies that started about the same time as 7 Generation Games and had terrific website, brochures, every social media account you can imagine,  unbelievably honed pitches – and they evaporated because they were all sizzle and no steak.

I’ve written before about Paul Hawken’s recommendation that in growing a business that you do as much for yourself as possible. That’s a whole post in itself, but to cut to the point – you keep your overhead low, which means you don’t require external funding in the short run. You are more viable in the long run not just because you have low debt and low operating expenses, but you also have the asset of everything you have learned yourself.

But we still hired someone else to update the website (-:

I read an interesting post by Heidi Roizen with the title, “It’s different for girls.” Ms. Roizen is an admirable person. A successful entrepreneur, venture capitalist and mother. (The latter is relevant as you’ll find if you read her post) This is a quote from her post:

Wine was brought and toasts were made to our great future together.  About halfway through the dinner he told me he had also brought me a  present, but it was under the table, and would I please give him my hand so he could give it to me.  I gave him my hand, and he placed it in his unzipped pants.

Yes, this really happened.

I left the restaurant very quickly.  The deal fell apart.  When I told my brother (T/Maker’s co-founder and chief software architect) what happened, he totally supported my decision to bolt.

This is the part I read over and over and did not get. She didn’t throw wine in his face, punch him or do anything other than leave. Her BROTHER didn’t do anything other than agree they shouldn’t work with the company. Now, the latter I completely understand and I also am in agreement with her view that you don’t work with dirtbags and there are people out there who are not shaking their dick at you – literally – that you can work with.

Maybe it is growing up getting in fist fights in the neighborhood on a regular basis. Maybe it is being the world judo champion. I cannot imagine being in a situation like this where I did not haul off and hit the person as hard as I could. To me, it’s assault. The one time I did get groped at work – over 30 years ago – I actually did throw him into a wall. Really, it was just reflex, the same as if someone punched me in the face, I would have hit him back.

Ms. Roizen is admirable not just for her accomplishments but because she is honest enough to say,

It pains and somewhat embarrasses me that I am not recommending calling out bad behavior and shaming the individual or individuals responsible.  In a perfect world people would have to account for their behavior.  But as an entrepreneur who spent years in a daily battle for existence, I did not feel like I could afford the hit I’d take in exposing these incidents.

I respectfully disagree. She was not in a daily battle for existence. She was not a woman in  Nigeria who was in danger of being killed or sold into sexual slavery. Perhaps she was in a daily battle for existence of her company, a certain lifestyle. I am sure she believes that the end justified the means and now she can, as a venture capitalist, help other companies, speak out in her own way for women. I don’t know her at all and I’m in no position to tell her how to run her life.

What I will say, though, is that it is totally different for me. In the few times in my life that I thought the end justified means I did not think were right, it always turned out to be a mistake.

I appreciate her. I appreciate the honesty of the female college president who wrote in her book about deciding to have her breasts removed at the point when she was walking through an airport and a man said, “Nice tits”

However, as I said in the post I wrote about that, I am in more agreement with my sister who commented,

“Wow! If I was walking through the airport and a man said, ‘Nice tits!’ I think I would accidentally spill my coffee on him. And if I wasn’t carrying a cup of coffee, I’d go and buy one to spill on him. Having my breasts surgically removed would be the last thing that would occur to me.”

 I’ve been married to The Invisible Developer for 17 years. We’ve raised our voices to one another perhaps twice, so it’s not as if I go around randomly swinging at men. However, I know without a shadow of a doubt that in Ms. Roizen’s situation I would have jumped up, yelled,

“Are you fucking kidding me?”

and then I would have smacked him.

I am sorry that Ms. Roizen and Dr. Spar had to make the choices they did.

One thing these women have done for me this year is cause me to dramatically increase my plans for 7 Generation Games because I intend to show the world that you can become an extraordinarily successful woman without cutting your breasts off or enduring a strange man putting his dick in your hands.

I have four daughters and two granddaughters and I refuse to accept the status quo will be their future.

If you’re interested in jumping in on our anti-hackathon, click here to learn more.

I read some poorly done research the other day that showed a very small number of start-ups that became billion-dollar companies were started by people over 50.  As someone else pointed out in the comments to it, that was lacking a key number, the denominator. That is, if people over 50 only started 20 companies, and 2 of them made a billion dollars, while people 25-35 started 10,000 companies and 20 of them made over a billion dollars, that still suggests that your odds are far better with the older crowd.
Regardless of the denominator, I don’t care that much. As a statistician, I am well aware that while statistics are great at predicting probability you cannot say anything with certainty about an individual case.

I was talking with The Invisible Developer one day about scheduling, cash flow and so on, and asked him,

“How long, realistically, given our current rate of spending, do you think we can continue development?”

He answered,

“Forever.”

Here’s the thing – all of the coding now is done by the two of us, and we managed to put enough away to live on in retirement. Three of our children are on their own doing fairly well. The Spoiled One received a significant scholarship to prep school and we already saved up for her college education.

So … at 55 and 58, respectively, we can easily work on developing these games for another 10 years. Being these ages, we have a ton of years of experience in programming, documentation, and other fields like statistics, mathematics and education. Think what it would cost you as the major expense for creating a game and it would be  - developers.  We can afford two full-time senior people before we have to bring in a dime of revenue. We can probably continue to support a part-time tech support person and a part-time administrative staff member indefinitely as well.

Now, of course, we would LIKE to make money and that is our plan. (The Spoiled One and our Chief Marketing Officer both remind us regularly that they would like us to make a LOT of money). Our employees would be unhappy if we shrank down to two part-time people plus us. The fact that I am writing this post at 11:30 on Saturday night in North Dakota, after spending much of the day writing improvements to the game tells you something about how serious I am – and The Invisible Developer is home working on another game.

Still, it appears to us a huge advantage that we have a relatively long runway. In addition to the funding we have received from the SBIR Phase I and Phase II awards and the Kickstarter funds, we are able to self-fund development for a really long time.

One of the more brilliant things we have done – for which I would love to take credit, but I have to admit the SBIR grant was an impetus – is to install the beta version of the game in a lot of schools. If we were just home coding, there might be a tendency to have a laid back attitude – but knowing that teachers in several states are having a problem with a part of the game introduces an urgency on getting in fixes. Because we do those fixes in-house, we can often do them in less than a week.  The fixes the teachers requested on Wednesday will be done by Sunday night, tested by our fabulous game testers and installed in the schools on Wednesday of the upcoming week.

My point – which you may have despaired of me having  - is that older entrepreneurs who have raised their children and secured their retirement, may be able to put in more time for a longer period, than younger founders. That ability to stick in the game makes them LESS of a risk.

 

If you’d like to buy Spirit Lake: The Game and see what I am talking about, click here.

The game is focused on mathematics for grades 3-5, but it’s also fun if you just want to tromp around in a virtual world set in North America in 1800s.

 

 

Lately, I’ve been a terrible person. I have told many people, “No, I cannot help you.”

After six happily profitable years, we’re winding down The Julia Group consulting division. We are not taking any new contracts and not adding on to any existing contracts. As contracts expire, we are not replacing them with new business. In the next month or two this blog will get merged with the 7 Generation Games site.

I have agreed to present at one conference, the Tribal Disability Summit, in July, where I will be speaking on Start-up 101 : The Challenges and (Yes) Advantages of People with Disabilities. I have also said no to other offers to speak at conferences. I’m really bad at answering email requests.

Every time I tell someone no, I feel like I am a terrible person. After all, that’s why I went into consulting and why I started The Julia Group, so I could help people. We have always had rates far below the market average so that non-profits could afford the help they need and also so we could choose to work on the projects most rewarding to us overall and not just financially.

The truth is, I’m not really a terrible person. I decided to do a new start-up to make games that teach mathematics and I work every day on making those games better meet the needs of students and teachers.

The best advice on succeeding is to focus on whatever it is that you want most.

When I was competing in judo, every decision I made all day met a single criterion:

Will this help me win the world championships?

If the answer was, “Yes”, no matter what it was, I did it.

If the answer was, “It will make my chances of winning lower”,  I didn’t do it.

If the answer was, “It won’t make any difference”, then I did it if I felt like it or there were other reasons.

I’m applying those same lessons learned in winning a world judo championships to running a successful gaming company. Being best in the world is not a part-time gig.

As my big brother (who is, coincidentally, a math teacher) told me,

There are too many people in this world who cannot give up what they want now for what they want most.

I’m trying my best not to be one of those people.

 

 

 

 

Most start-up events waste my time. Founder Friday Women 2.0 was one of the few exceptions.

Generally,  at start-up events, the people who have an actual company make up a tiny fraction of the attendees, being out-numbered at least 5 to 1 by people with “an idea for a company”. The remainder of those in attendance are in insurance, law or other companies selling to start-ups. Nothing wrong with that and at one event we actually met a company we signed a contract with, so it’s not always a waste of time.

I think most people running actual companies are like me, they are too busy doing things to have a lot of time to spare for drinks with people talking about what they are going to do.

Our Chief Marketing Officer insists that I get out of the office and network. She believes everyone in the company, regardless of job title, should pitch, present or exhibit our games at least once a month. So … I agreed to put up a table at Founder Friday ‘s Women 2.0 event in Los Angeles.

There are only two guarantees that your time at a start-up event won’t be completely wasted; 1. You get to pitch/ present your company or 2. There is a speaker you can learn from.

Founder Friday, Women 2.0 had both. I did get to discuss 7 Generation Games with a number of people, but most helpful for me was the speaker. I tweeted about the event and a couple of people asked me her name. It was Jody  Dunitz, and she is an investor with the Tech Coast Angels, which is the largest angel investor group in the country. Most of her talk was about how she personally decided whether a company was a good investment. Here are the main points from my notes:

  • She looks at three things.
  • Look at the product first. It must be innovative in some way. Status quo is a huge barrier to overcome. You can have a greatly superior X but if people already have an X then they are very inclined to stay with that. (Take the example of a car. You’re probably not going to go out and buy a new car right now just because a better car came out on the market. If you have a Prius, when it comes time to buy a new car, you’re likely to just buy another Prius. )
  • You need to have a product. “There has to be some there there.” Too many people have just an idea but no actual product. It can be a prototype, a minimal viable product, but there has to be something.
  • You need to have a way that you are going to make money. Too many people say they are going to scale up and then be acquired for $19 billion. You need to have a way that you are going to make revenue.
  • Second, she looks at the team. Some investors may look at the team first.
  • She is extremely reluctant to invest in a company with a sole founder. To make up for being a sole founder they would have to have some other aspect of the company  that was really extraordinary.
  • There isn’t a magic number of founders to have on your team but whatever the number is, it’s more than one.
  • The key member of the team is the CEO. The CEO should be knowledgable about all aspects of the company. He or she doesn’t have to write code but should at least understand the technical aspects of a product and not have to go ask the CTO. The CEO should understand the financial situation and not have to go ask the CFO.
  • Third thing she looks at is valuation. Founders always think their company is worth more than investors do. Founders look at how much time and effort they have put into it. Investors look at how much money they think they can make.
  • Angel investors look for a 10x return in 5-7 years. It used to be 3-5 years but there is more competition from accelerators, incubators and different investor groups now, so the horizon has gotten a bit longer.
  • Growth in venture capital has not matched the pace of growth in angel investment, so a higher proportion of companies than previously now get angel funding but fail to get venture capital and die.
  • Angels are looking for a 10X return. They need a high return to make up for all of the companies that fail and don’t make anything.
  • If your company looks like it may pay 10-20% returns, they aren’t interested. In that case, it would make more sense to invest in something like Apple stock.
  • Startup companies at the Angel level are usually valued at $2- $4 million
  • When founders are deciding whether an angel investor is a good fit, the first thing they should look at is rapport, do they get along. Is this person interested in their company over and above the money it can make? Will the investor bring something to the deal in addition to money – connections with key customers, knowledge of the industry.

Two main points I took away from it for me personally are,

  1. Our team is doing a lot of things right.
  2. We need to stress more how 7 Generation Games is different from other educational gaming companies. I got right on that.

hunter on horseback

7 Generation Games – Grand Theft Auto – but with horses and math, and for kids. 

For $9.99 you can quit arguing with your kids about math homework.

Yesterday, I did the Happy Dance in my office when we finished version 2.2 of Spirit Lake.

I said that despite taking me away from virtually every other interest in my life, being obsessed with a start-up is worth it.

WHY?

In thinking it over today, I realized that 7 Generation Games meets every possible desire I could have

Julia16Mental – making a game truly challenges me both intellectually and creatively every day. It began with creating, with my partners, a vision of a virtual world – what would the people look like, the scenery, what would they do? How would this dovetail with math? How can we make it interesting enough that children keep playing it? On top of all of these questions is how to write the code to get it to run, record data and for all of the parts – database, 2D program, web input forms, 3D programs – to work together. There really isn’t anything more satisfying in life than seeing something that started out existing only in my brain becoming real. It’s exactly like being a parent except that 16 years from now the games won’t tell me I’m ruining their life by refusing to sign them up for a club soccer team.

Emotional – there is the good part of the emotion of working on 7 Generation Games. We are sincerely striving to make it easier for more kids to learn math. When our games succeed, students improve their chances of passing grades, graduating from high school and going on to college because math is a hierarchical subject. If you don’t understand division, you aren’t going to get fractions. If you don’t understand ratios you’ll fail geometry and statistics. They also learn Native American history, pick up some words in native languages and even increase their vocabulary in English. There is also the elimination of the negative part of working many other places. I can make my own hours and since I am allergic to mornings, I can get up at 10 a.m. Because I telecommute, I almost never have to drive in LA traffic. I seldom have to wear a suit. I work only with really smart, motivated, interesting people. The teachers who use our games and provide us feedback are a delight because they are the ones who are on the forefront trying new things, and not shy about giving their ideas for improvement.

Physical – if we’re going on Maslow’s hierarchy of needs, this is the basic ones, food, shelter, heat, etc. While our Chief Marketing Officer joined up because she expects us to make a lot of money, and I’m not averse to that, we do make enough to cover the bills. We’re not yet making what we would be if we had taken corporate job offers, but it covers private school for The Spoiled One, trips to see Darling Daughter Number Three continue to dominate the world in mixed martial arts, wedding expenses for The Perfect Jennifer and visits to The Even More Perfect Grandchildren. My goal is to be like Bill Gates, both in making software a billion people use and in giving away a billion dollars.

Today I worked on making a game more fun for kids. Tomorrow, I will work on putting in new ideas, new challenges for helping kids learn more. Yes, I actually get to do this for a living as a grown-up. How awesome is that?

Buy our game. It’s awesome. Best $9.99 you’ll spend today.

7 Generation Games Logo

Really useful advice for start-ups on How Not to Die from Paul Graham emphasized

 The number one thing not to do is other things. If you find yourself saying a sentence that ends with “but we’re going to keep working on the startup,” you are in big trouble…. We’re taking on some consulting projects, but we’re going to keep working on the startup. You may as well just translate these to “we’re giving up on the startup, but we’re not willing to admit that to ourselves,” because that’s what it means most of the time. A startup is so hard that working on it can’t be preceded by “but.”

In particular, don’t go to graduate school, and don’t start other projects.

As my co-founder, Maria and I discussed today, that is absolutely true but it’s also true that it may take some time to get to the “Nothing but the startup” point. In our case, we had existing contracts we needed to fulfill, mine with consulting clients and hers with ESPN and Fox News Latino. You also have to be in the financial position that you can afford to not only work at a reduced salary for years but at the same time pay for expenses – artwork for the game, animation, travel expenses to demonstrate the game. As you grow, there are other expenses for tech support, promotional items like the posters the teachers put up in the classrooms, the $25o I just paid to have a table at Women 2.0 Founder Friday in Los Angeles.

artwork from the gamePaul Graham’s article was the second-best advice I have read on starting a business. The best was a book by Paul Hawken I bought over 20 years ago called Growing a Business. He advised a couple of things. One is that you learn how to do as much for yourself as possible instead of paying for expensive “experts”. Justin Flores does our artwork,  with occasional contributions from Gene Wilson, because I totally suck at art. Other things, whether it is CSS or sound editing with Garageband, I just learned. I took a class at MacWorld one year, bought some books. Yes, I took several books out of the library, too, instead of buying them. Hawken’s other advice was to keep your operating costs as low as possible, thus making it possible to follow the advice of Graham 20 years later which is to just do your start-up.

We have an office upstairs where The Invisible Developer works, shielded from all human eyes, and an office downstairs where I work and so does Marisol, Maria when she is in town and the occasional intern. Because we have been in this location in Santa Monica for over 30 years and the city has rent control, the rent for our space comes up to under $500 a month. The down side of that is that it is not at all feasible for us to move. The Spoiled One would like us to move to Ojai. I’d really like to live somewhere we could have a dog, but it is not in the cards.

Doing “nothing but a startup” means saying “No” a lot, and saying “Yes” to the right things.

If you are  doing “nothing but a startup”, it is not just that almost all of your time and attention is going to be focused on that, but almost all of your decisions, too, are based on “how will this affect our company?” This can be something like can we move or more amorphous like the topics you learn more about. I did a lot of SAS programming for over 30 years and now I’m doing much less of that and more javascript. I’m skipping the SAS Global Forum for the first time in several years and will probably go to an HTML5 conference in San Francisco instead.

It’s good to be learning new stuff  in a new area, but there is also new stuff in the old area – like the SAS model selection procedures, that I really wish I had time to learn. I’ve been writing on my blog less. I quit teaching at Pepperdine University as an adjunct because I just could not commit the time to showing up once a week for four months straight.

It’s absolutely beautiful weather most of the time in Santa Monica and I rarely make it outside because I am working. I’ve quit volunteering nearly as often. I teach judo once a week at Gompers Middle School and several times a year, I have to get a friend of mine to substitute for me. I’ve resigned from all non-profit boards I used to be on except for one, and when the board chair term expires this year, I’m stepping down from that.

As consulting contracts have expired, I haven’t renewed them. I’ve turned down several offers to teach classes, present at conferences and take on new consulting clients.

I wrote a book on matwork for judo and mixed martial arts last year, but I’m not working on another book.

All of this has now enabled me to spend 8, 10 or 12 hours a day most days doing nothing but working on 7 Generation Games (while only getting paid for less than half of those hours!) and the result is that we are progressing far faster than we were a year earlier.

Is it all worth it? Yes.

 

 

When I add up all of the ad revenue from this blog on top of the business it garners, in a good month it might average out to $30 an hour and in a not-so-good month maybe $10. Since my consulting rate is a heck of a lot more than $30 an hour you might wonder why I bother. If you read this blog regularly you can guess that it is the same reason I do most things, for the hell of it.

However, occasionally there are some perks that are priceless. One of those was the opportunity to be on the call this morning on the White House call with Sam Kass, Executive Director of Let’s Move. Thanks a million to Blogher for setting this up. I am SO-O not a morning person and the call was at 8 a.m. Pacific time. I almost tried to get Maria to fill in for me but she tactfully pointed out that it would be hard for her to pass off for me because she did not sound sufficiently old.

So, barely awake on my first cup of coffee, I still learned a lot on this call. There were many bloggers, with diverse interests, and the question and answer session at the end revealed that. A nutritionist asked about the likelihood of stopping junk food and soft drink sales in schools. A food blogger asked about the quality of school lunches. When Sam Kass mentioned documented higher math scores among students with free breakfast programs, of course I perked up and asked for more details.

 

me with daughters

(Maria is on the left. I’m the wrinkled one on the right. Darling Daughter # 3 is in the middle, apparently exhausted from 66 seconds of effort. Thanks to Hans Gutknecht for the photo.)

Now, I’m good at math and I thought if three hours after school are important – often the time between when kids get out of school and their parents get home – and you have at most one hour of physical activity, what are kids doing in after-school programs in the other two hours. Surely, they can’t spend two hours just eating fruits and vegetables, right?The most interesting part to me was the lengthy discussion of the three hours after school as being vitally important. This is a personal interest of mine, since for the last three years, I have volunteered at an after school program teaching judo. (The daughter in the middle started that judo program five years ago and taught it for the first two years.) It was also interesting, though, because he mentioned the importance of 60 minutes of physical activity a day, at least 30 minutes of it occurring in school seems to be a goal.

Our games are used in a couple of after school programs, and that’s great. However, the games we have available now are aimed at mathematics in grades 3 through 6. What about older kids?

I visit a lot of disadvantaged communities and one of the disadvantages students have is that they don’t really have much idea of the type of opportunities out there for future careers, what people do or how they get those jobs. So … I thought one thing I could offer immediately is an inside look at making computer games. Not one to let grass grow under my feet, I sent an email this evening to 30 teachers I know and linked to a few parts of the game we are working on now. These are in pretty rough form. However, if the students check in every day after school they can see what we have done in the past 24 hours. It should be fun for them to see how the game takes shape. Some of the pages don’t have sound yet. They don’t have the bells and whistles and “yoo-hoo” that comes up when a student passes a quiz or goes up a level.

That whole “Take your child to work day” isn’t available to a lot of students, and if they live in a small rural community, the kind of jobs they can be taken to is limited. So … I decided to reach out to students after school and take a whole lot of them to work with me for the next six weeks. Too often, whether it is software or scientific research, students are presented with the final product and think it is made by people who are far smarter and more talented than them. If they only saw how rough it is at the beginning and the amount of hacking into shape it takes — and now they will.

I attended  Survivor 8, the Tech Coast Venture Network fast pitch competition last night, and I thought I’d give my thoughts in case you are considering attending a similar event in the future. In keeping with the 30-second format, I’ll give you my take away now – it is worth it if you have an extra $50 and a few hours of time. If your main goal is to win the advertised $25,000 prize, I wouldn’t bother.

How it works – you give a 30-second pitch, then 10 companies are called back to give a three-minute pitch and then three of them are called back for a ten-minute question and answer period with the judges. If you have not been to an event like this before, it is interesting to see the types of questions the judges ask.

The point I missed before going – and it was totally my fault – is that this is a competition for how well you pitch your product. Of the three finalists, it turned out at the Q & A stage that two of them had no actual product. Questions with one went like this:

“How have results been with your prototype?”

“We don’t have a prototype.”

“You don’t have a prototype?”

“Yes, we do have a prototype.”

then later,

“What have the results been in your lab?”

“We don’t have a lab. We are looking for lab space. However, we did a literature review and a study with 12 people in Spain found …”

No question, though, the three-minute pitch was terrific, before they got to questions about actual product.

A second finalist, when asked if their demo was an actual working product replied,

After we placed second in another start-up competition we put up a website to take pre-orders. We are negotiating now to bring in a team member who is a developer.

The people at my table found all of this highly amusing, since most of us had actual products, even if only in the beta stage. The person next to me laughed,

We didn’t realize you didn’t actually have to be able to build anything! Next year, we’re coming with an app that will bring about world peace.

I’m not faulting the Tech Coast Venture Network. They had advertised it as a pitch competition and that is  – sort of, what it was. I say “sort of” because I was confused by the third finalist and eventual winner – a good company, that did have a product and had put in $500,000 of their own money. As far as stage of development, they are about where we are with 7 Generation Games. However, I did not think their 30-second pitch was good at all, nor was their three-minute pitch all that impressive, so while it was very clear why they were selected among the three  finalists, how the three finalists were chosen was not as clear. I think (and I assumed this before I came so I was not upset) that more than the actual presentation is part of the judging.

This is the fourth open event I’ve attended where people pitched their companies. I pitched our company at this one and at one over a year ago when we were just beginning development on our first game. The other two, I just went as a spectator. This is admittedly a small sample, so take the following statistics with that in mind.

Of the four events, only one implied that the winner would receive an investment from the venture capital group sponsoring the event. The one last night gave a cash prize. The other two received meetings with venture capitalists.

  • Of a combined 26 semi-finalists, none were black or Latino, although there were black and Latino founders at all of these events.
  • None of the four winners were women.
  • Of the two events that had semi-finalists (two went straight to finals, so I lumped them in the semi-finalists above), only last night’s event had any female-owned companies – there were two out of ten and neither made the finals. That was an improvement because the event I attended a couple of years ago had zero out of ten.
  • While all but one of the finalists/ semi-finalists in the previous events were under 40, there were at least two companies in the Survivor 8 semi-finalists who were definitely over 40, including the eventual winner.
  • With 120 companies presenting, your chances of winning the $25,000 prize are less than 1%.

Since between Maria and I, we probably took the equivalent of two days of our staff to prepare, was it worth it? In statistical terms 1/120 * $25,000 = $208  . Subtract the $50 for the dinner and your average cash value is $158, which is far less than I make in two days. I am sure many of those pitching spent more time than us preparing. The answer many people would give me is that if you don’t have the optimistic attitude that you’re going to win that you have no business being an entrepreneur, so my statistics don’t apply.

That’s not the reason I thought it was worth attending. It was an opportunity to meet people we might want to work with in the future, both as collaborators and investors. I was very interested in speaking with people from a few companies who are doing video editing, because I can foresee a need for that.

Events like these not only give the investors a chance to meet you, but also give you a chance to meet and get to know the investors a little bit. While I’ve met some perfectly nice people, and a couple have given me some very useful advice, there are also a few people I’ve decided would not be a good fit as investors for our company. Deciding to accept investment is a two-way street, and neither party should be making that decision without getting to know the other first.

 

 

It’s been a really productive two weeks in North Dakota, installing our game in schools on two reservations, in tribal schools and public schools. I didn’t write this post to talk about that. Rather, in keeping with some of the really useful posts I’ve read about start-up failures, I wanted to share with you the one thing that didn’t go right this week.

Just spoke to the Chief Marketing Officer for our 7 Generation Games start-up and she told me we did not get accepted to the playco lab accelerator. She felt bad about that since she really does think we are a terrific company, we already have traction with games installed in the schools and paying customers, and the fact that she lives in the Bay area meant it would have been very convenient for her.

The Invisible Developer and I had mixed feelings on this. On the one hand, we think our company is awesome and going to be incredibly successful.

We’re really pleased with the work we do and an accelerator (or anybody) saying they don’t want us gives us kind of the same reaction when somebody calls your baby ugly – how dare you!

On the other hand, we’re just coming back from two weeks away from our cocoon-like home offices by the beach, and The ID has said approximately 2,982 times that he doesn’t like to travel. When I told him that Maria had called and said we were not accepted, he did a reasonably good job of hiding his glee.

I don’t mind travel but I am mindful of the sage advice I received from Jenny Q. Ta of sqeeqee to never give up a half a percent of your company before you have to, and we are not at the point where we need outside money. Although having some validation from an outside group might be nice, it might have helped our marketing to have access to a network within the acceleration, we still have 19 months of SBIR funding, as well as our own funds from The Julia Group.  All of that being said, yes, it does bother me that we didn’t get it, because, I think we’re awesome and I want everyone on earth to share that view. Also, whenever I read these articles about people who cannot find start-ups outside Silicon Valley/ with female/ minority founders and they are supposedly really looking , I think, “Gee, we must really suck because we are all of those things and they don’t want us.”

Then reality sets in. I am a statistician, after all, and not too many people know regression lines better than me. (Yes, you may be a far better statistician than me , but 99.99% of the population has no clue what a residual error is and the fact that I just made that percentage up makes it no less true. Try to parse that statement for a moment.)

Years ago, I was listening to (okay, eavesdropping on) a “top executive”  at a Fortune 500 company who was discussing his next career move, he said,

“It has to be perceived as bigger, better and then I’m still on the path to CEO. If it’s seen as smaller, worse, then I’m fucked.”

Maybe that is true in his career path, but in my experience as a statistician, small business owner and human being, life seems more like a regression equation. Even though you may have a straight line in one direction or another, there are ups and downs. Take for example the regression line I just happened to have laying around with 100 data points

r= .70 Overall, the trend here is very positive – about .70, to be precise. If you looked at either of the two low points shown with arrows, you’d say, holy shit, the trend is really going down, I’m failing. In fact, though, if you compare the initial low point, you can see that each of these new lows is higher than the previous one.

In my life, I have seen far more trends like this one, if you are lucky, and really none where every single point falls on the regression line.

Statistics imitates life. Or maybe it’s the other way around. How about that?

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