StartupWeekend: A Retrospective Debrief
Well, I have now had a few days to rejuvenate from the awesome experience that was StartupWeekend. With those couple extra days of perspective I want to take the time to provide a debrief of the weekend.
Setting the Scene:
When Andrew kicked-off the weekend at the bar, he shared what he considered the main goals of the weekend with us… roughly paraphrased from my less than perfect memory.
- Primary Goal: To enhance the local entrepreneurial community and have fun
- Secondary Goal: To start a company.
He also shared with us what he saw as the four possible exit scenarios for the weekend… not that there couldn’t be others, but these are pretty broad.
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- “That was fun! Let’s do it again some time”… i.e the idea/company has no long-term legs
- Nights and Weekends startup - Everyone pitches in to develop the idea further
- Core team startup - A core team of founders takes the idea over
- One of the founders takes the ball and runs with it
For either exit 3 or 4, I assume there would need to be a buy out, or at least some dilution agreement in place allowing for more equity as compensation for the additional effort and risk the group (or individual) would take.
So how did we do?
Primary Goal: Community — Nailed it!
It was weekend of great fun (and hard work) where I meet an outstanding group of people that are active in the Houston entrepreneurial community. As an added bonus I learned a ton about Web2.0 (lived it vs read about it), website design, PR, marketing, law… even OB and general management (yes, even w/ my MBA). No earth shattering revelations, but a myriad of little insights and tidbits that could prove invaluable in the future.
Just a few of the great people I got to know fairly well:
- The entire UI team (after all, we pulled a graveyard shift gitin’ ‘er done):
- Marco Ramirez - there is no “s”
- Matthew Alberty - powerpoint wire-framer extraordinaire
- Ramesh Bhaskar - “Denny’s is very close”
- Marcus Mateus (Me) - tagline left as an exercise to the reader
- Andrew Hyde - the very intense, yet laid-back, founder of StartupWeekend
- Gwen Bell - yoga does the body good, and Gwen made our cool logo
- Erica O’Grady - co-founder of the Method Agency (or kind hosts)… Erica is now off on a new adventure to start another company in addition to TipDish… oh yeah, and she is the first “Erica” on Google
- Steve Poley - Great devils advocate… really helped us draw out the best ideas
- Kelsey Ruger - he can clean copy with the best of them
- Melissa Garcia - our very own Digital Latina, and graphic design goddess
- Matthew Wettergreen - twitter is your blog?
- Chris ? - there were too many to keep you all straight… need to track down those headshots
There were many other wonderful people that I met, but I just wanted to give a shout-out to those I spent the most time with. I was impressed with everyone I met, even if we spoke for only a few minutes.
Secondary Goal: Start a Company – Close enough for horseshoes?
Amazingly, we conceived of a great service with incredible potential, created a marketing/PR campaign, and prototyped it all in a weekend… A great achievement? You bet!!
That said, a company is more than just an idea, or even a product/service,… to a great extent it is the people (whether one or 100k) that in the end are the essence of a company. While I think we had a great team for the weekend, I’m not sure we have a company… at least not yet.
There are also a couple of hurdles that the group will need overcome in order to be successful:
1. Equity DistributionAs can be seen from Toronto, as well as countless other startups, this can be a very touchy subject. Real money is potentially at stake, but ego is definitely at stake.
As I understand it, over the weekend 50% of the company’s equity is supposed to be distributed to those who attended based entirely on participation (1 share for Friday, 2 shares each for Saturday and Sunday, and 2 bonus shares for being there the whole weekend). Based on the attendance on our wiki there were 32 participants who each got a share ranging form about .3% to 2.1% (or as high as 2.2% depending on whether or not you include Andrew in the totals). In addition StartupWeekend, essentially Andrew, gets 5% for organizing the event, leaving 45% for future use (i.e. investment/compensation for those who move the idea forward).
I think the above may work fine for a weekend, especially if there were an immediate cash exit (though who would the missing 45% go to?). However, in the longer run the current distribution creates real challenges for the go-forward team. Even if we assume there is no further dilution and there are only 10 people on that team, dividing the rest of the equity evenly would give each of them another 4.5%… or roughly double what you could have gotten in a single weekend. Not only would that be absurd, but dividing the equity evenly would likely be as well… shouldn’t the CEO (whoever that is) get more?
If VC were to ever get involved my guess is that the aforementioned structure would get completely set aside. They simply wouldn’t stand for it… they would want the post-weekend founders to have real skin in the game . Oddly enough, the current structure also makes it more likely VC will be called in early, despite the fact that the idea should probably be bootstrapped for a while in order to significantly increase the initial valuation (or simply not waste anyone’s time - if it flops completely).
2. Go-Forward Team CompositionThis really goes hand-in-hand with the point above, and is also likely to create bruised egos and hurt feelings.
Leaders certainly emerged over the weekend as needed to accomplish tasks and propel the team forward. However, there was never any real competition or positioning. There appeared to be a willingness to allow leadership to move freely as needed since no compensation was at stake. It will be interesting to see how long that phenomena continues, especially once the equity issue makes its way to the forefront.
Perhaps creating a bus. dev. team during the weekend whose entire purpose is to set the foundation for the company assuming the team (or part of it) decides to take the idea forward. This would need to be designed to provide just a bit more structure, but nothing so cumbersome (or empowering) that it would detract from the primary goal.
My biggest concern is that the company could die a slow death, and wither on the vine, while others take the idea (or something substantially similar) and run with it. Just as bad, the whole equity distribution aspect could be left hanging… at least longer than it should be, and some feelings (and potentially pocket books) might really get hurt.
In the long-run these hurdles may not be significant for TipDish, and may even make the team stronger, but if not handled appropriately they could spell disaster.
What’s Next for Tipdish? Time will tell…
For now the team is sticking with the company on nights and weekends (exit #2). Our first big meeting is this Thursday (appropriately back at the bar where it all started)… Unfortunately, I will have to conference in since I live in Austin.
After tonight’s meeting my guess is TipDish will evolve into a core group (exit #3)… and we’ll see from there.
The Verdict – Sign-me up for Austin, Dallas, San Antonio…
While there is room for improvement on the secondary goal of creating a company, as noted above, in a very real sense it just demonstrates the authenticity of the weekend. All of the hurdles we faced, and are now facing, are things that every startup has to deal with. The major difference is that we are confronting these challenges much sooner, and are no doubt growing faster as entrepreneurs because of it.
I think of StartupWeekend as a bootcamp like experience, or pledgeship if you prefer, … love it or hate it, you will not soon forget it… and will likely form some lasting bonds with your fellow participants.
Update: If you are more interested in a technical perspective on the weekend check out Robert’s great post on 10 Lessons Learned.