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Here’s the biggest opportunity for entrepreneurs — and cities — everywhere else

You can divide most people into two groups: those that are bullish on offline businesses and those that are bullish on online businesses.

The former want to create the next coffee shop or the next farm supply company. The latter want to create the next Amazon or Facebook.

There’s nothing inherently wrong in either of those opinions but the biggest opportunity for entrepreneurs over the next 5 years will be at the intersection of offline and online.

the biggest opportunity for entrepreneurs over the next 5 years will be at the intersection of… Click To Tweet

And, in particular, it’s about helping those offline companies learn to use online service to grow their businesses. (e.g. social media and paid ads for customer acquisition and online services to streamline their back office processes)

If you’re reading this from San Francisco, Chicago or some other big city, you might think that the online/offline intersection is a joke. Or too basic. Or not disruptive enough.

But the rest of America — and the rest of the world — would disagree with you.

Over the past 18 months, I’ve driven 50,000+ miles, lived in 92+ cities and met 50,000+ entrepreneurs across North America and here’s what I’ve learned:

Ambition is equally distributed. Cash is easier (not easy) to get than ever. Functional expertise — particularly around entrepreneurship — is what’s not equally distributed.

Ambition is equally distributed. Cash is easier (not easy) to get than ever. Functional expertise --… Click To Tweet

And that’s the opportunity for entrepreneurs, investors and community leaders everywhere.

To really think about what it takes to help more of their existing offline businesses learn to use and leverage the latest online platforms and tools to grow those local businesses.

Encourage your local tech entrepreneurs to run a workshop on using Facebook ads. Or a workshop on using social media effectively. Or a workshop on using existing online tools to streamline back office processes. And spend the rest of the time getting local offline businesses to come spend an hour a week learning about it.

Whatever you do, just do something. And start doing it today. That time will be better spent than begging other big companies to move to your town.

It’s not about influencers or lucky breaks, it’s about the process

Filip, one of my readers, made a great point about my most recent tip on improving cold emails:

Sadly I think most of these cold emails are not even justified. A lot of people seem to be reaching out to influencers, hoping for some lucky break, instead of actually working on building their business.

One could make the case that the sender needs advice, but there are so many books/videos out there which already address probably any challenges one could have. If one truly needs specialized and custom advice, they should fix that problem immediately by finding the right person and paying them for their time like on clarity.fm, certainly not wasting time spamming people with coffee requests, LOL.
It’s a great reminder that entrepreneurs should be extracting information rather than asking for advice. And that everything — growing your business, raising money for your startup and hiring your team — is a process.

How to avoid screwing up your first meeting

There’s an important distinction between desperation and hustle: Desperation reeks of fear. Hustle smells like opportunity.

Desperation reeks of fear. Hustle smells like opportunity. Click To Tweet

It’s hard to explain the difference between the two but, as with most things, you know it when you see it.

And, as much as people want you to believe that the world’s a fair place, it’s not. First impressions matter more than ever — actually, every impression matters more than ever.

Don’t screw it up by projecting desperation when you actually know how to hustle.

Cold emails: one change that gets 200% better conversions

Everyone does cold emails wrong. Including you. The fix is super simple: switch the order.

Most people’s first email: “Can we get a cup of coffee?” OR “Can we hop on a call?”

Most people’s second email (if they get a response a all): “OK, wow. So you’re saying that the baseline conversion rate should be X?” OR “That’s really good to know. [Insert super crisp question here.]”

And that’s the key: keep your first question to anyone — an investor, an entrepreneur, even your date — crisp. Make it easy for them to answer it.

If you can get someone to give you 30 seconds of their time, you’re more likely to win another 30 minutes with them. The opposite way rarely works.

Everyone does cold emails wrong. Including you. The fix is super simple: switch the order. Click To Tweet

Overcoming the odds: How to get into the best accelerators

Just as much as I think entrepreneurs should skip the local investors first, I think entrepreneurs should skip the local accelerators too.

  • Aim for the top. I don’t care whether you don’t want to leave your hometown or if you don’t think you’d get into the best accelerators, apply to all of the best ones — YC, 500, Techstars and the others along the coasts. In the worst case, you’ll learn to answer the questions that real investors ask. In the best case, you’ll get in. Either way, you win.
  • Apply early. This sounds too easy but, having been involved in a bunch of accelerators over the years, I can tell you that the vast majority of submissions tend to come in during the last week that applications are open and it’s a huge missed opportunity to founders. If you want to increase the likelihood of getting your application reviewed (and your likelihood of getting a meeting), get your application during the first week — before the flood.
  • Put in the effort. When you’re answering questions on the application, keep the answer to three sentences or less. Anything longer is usually a sign that you don’t know the answer. Or, worse, that you don’t know how to communicate. Again, having been involved in so many accelerator cohorts, I can’t tell you how often I see a half-assed rambling answer to a simple, crisp question which gets the entire application dumped.
  • Look for warm intros. As you’re applying to the accelerator, look up the people running the program, the mentors helping with the program and the founders that have been through the program. You’re looking for a mutual connection to at least one of these people via AngelList, Facebook, Twitter or LinkedIn. Then ask for the intro — and try not to be weird about it.
  • The alumni network matters. Following on the last tip, the success of the alumni companies is a pretty good indicator of the accelerator’s quality. Try to avoid being in an accelerator’s first cohort unless the people running it have some way to prove that they’ve helped other companies grow in the recent past.
  • Drop the script. An incredibly large number of founders come in prepared with a pitch deck and a script in the footnotes. It’s uninteresting and, more often than not, you’ll get tripped up the minute you get a question you didn’t expect. It’s better to relax, keep your traction numbers handy and don’t be afraid to say “I don’t know.”
  • Maximize the speed of iteration. If you get a “no” from an accelerator, it’s safe to categorize it as a “no for now.” Take the feedback on why they don’t think you’re ready, apply it and reach back out to the interviewer ASAP once you’ve applied that feedback. This is especially important if you apply early.
  • Focus on the trajectory. The best accelerators are focused on the growth of your company, not your product. This is a pretty good litmus test of a good founder and a good accelerator.

Actually, that’s a good way to wrap this up: all of these things are a pretty good litmus test of a founder worth backing or an accelerator worth joining.

these things are a pretty good litmus test of a founder worth backing or an accelerator worth joining. Click To Tweet

Acknowledging the Struggle for Interestingness

If you want to get a second meeting with anyone, you need to be interesting. This especially applies to entrepreneurs.

If you want a second meeting, you need to be interesting. This especially applies to entrepreneurs. Click To Tweet

I’m stealing this phrase from something I heard on YC’s latest podcast with Casey Neistat and Matt Hackett. But it’s also something that randomly came across another conversation I was having with someone earlier today.

This is especially true for any entrepreneur that needs more than a few hundred thousand dollars to get to their first customers. (Read: hardware, medical devices, agriculture, etc.) Whether you realize it or not, you’re competing with every other entrepreneur outside your industry.

If you’re boring. If you’re unrelatable. If you’re overly focused on product rather than growth. You’re not getting the second meeting and it’s time to recognize that the problem is you.

No, Amazon HQ2 isn’t coming to your city

238.

That’s how many proposals Amazon received for their second headquarters. (And, as you already know, I hate all of this so much.)

In the next few months, we’ll find out where they’re going to actually go but it’s safe to say that it’s going to be a big city. After all, you need a big city if you’re planning to hire up to 50,000 people.

I’ve already ranted about all this so I’ll spare you that rant.

Here’s the thing: there will be 237 communities that don’t get Amazon HQ2. And I hope those communities considering taking whatever monetary incentives they proposed to Amazon and apply them to their entrepreneurial community.

Help the local coworking space. Help the local code school. Help the local accelerator. Those are the three signs of a healthy local entrepreneurial ecosystem.

Whatever. Just help the local entrepreneurs get the skills they need to grow.

Maybe losing the Amazon HQ2 bid will result in 237 better places for entrepreneurs to start and grow.

Maybe losing the Amazon HQ2 bid will result in 237 better places for entrepreneurs to start and grow. Click To Tweet

Everything worth doing starts small

A surprisingly high number of people walk into office hours with us and immediately jump into the how much money they could make, the size of their markets or the impact they’ll have on the world.

They underestimate the importance of getting to $1,000 in customer revenue first and overestimate the importance of their big vision.

Trying to convince them to slow down and start small is, surprisingly, much harder than you’d think. Maybe that’s because the local investors are often coaching them to think big. Or maybe it’s because the entrepreneurs are just so ambitious. Who knows.

If you want to convince people of ideas, start small.

If you want to build a business, start small.

If you want to change the world, start small.

If you want to build a business, start small. Click To Tweet

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If you’re planning to raise money for your company, check out fundraising for startups. It’s the tactical advice I give to every entrepreneur I meet.

Shark Tank is not real life

Say it with me y’all…

👏🏼SHARK.👏🏼TANK.👏🏼IS.👏🏼NOT.👏🏼REAL.👏🏼LIFE.

👏🏼SHARK. 👏🏼TANK. 👏🏼IS. 👏🏼NOT. 👏🏼REAL. 👏🏼LIFE. Click To Tweet

It kills me when the conversation is going so well… and then the entrepreneur drops this little gem into the mix.

“Yeah, so we’re raising $X for Y% of the company.”

NO ONE TALKS LIKE THAT IN REAL LIFE.

If you’re raising money, just talk like a normal human being.

“OK, so we’re raising $X and that’ll give us 18 months of runway. We should be able to hit [MILESTONE] in half that time.”

That’s it. Nothing special. Just be relatable. Have a discussion. See where it goes.

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If you’re looking for more actionable tips on raising money for your company, check out fundraising for startups.

Understanding the Venture Treadmill

There’s something I call the Venture Treadmill and it’s a real thing.

When you raise money for your company from anyone, you’ve stepped on to the Venture Treadmill. At that point, you’re not rewarded for anything but growth.

When you raise money for your company from anyone, you've stepped on to the Venture Treadmill. Click To Tweet

Oh, you rebuilt your entire back-end so that it’s ready for a billion users? Cool, but where’s the growth?

Oh, you hired a really badass team? That’s nice. Where’s the growth?

Oh, neat. You got a cool office. Wowowowow. But where’s the growth?

It would be funny, except it’s true: it’s easier than ever to raise your first $500K, it’s harder than ever to raise your next million.

Once you’ve stepped on to the Venture Treadmill, the expectation is that you’ll grow fast enough to require raising more money every 12-18 months — if you survive at all.

If it takes you longer than that, most investors will think your company has stalled. If you raise money quicker than that, most investors will think you’re growing incredibly fast.

It may not sound rational but, if you really want to dig into it, it’s all about how professional investors measure their own performance. (I’ll save that explanation for another day… but, if you’re ready for the rabbit hole, Google “IRR” and get a cup of coffee.)

So it’s hard not to chuckle when an entrepreneur says, “This will probably be the last money we raise.”

DON’T EVER SAY THAT. EVER.

At best, you’re giving the investor no real incentive to invest in your company. At worst, you sound like an idiot.

If you want to learn more insider tips and tactics on raising money for your business, check out fundraising for startups. It’ll save you hours of work and weeks of wasted meetings.