BusinessWest, the premier business publication of Western Massachusetts, kindly made Launch413 their cover story this week. In the story they explain our unique business model that puts entrepreneurs first, interview one of our venture advisors (Meghan Henshon), and go on to interview two of our portfolio company CEOs: Lisa Papademetriou (Bookflow) and Doug Hexter (Wooftrax).
Thirty-five start-ups and lots of their supporters met local investors at the Valley Venture Hub in Springfield June 13th.
All the start-ups had some relation to western Mass: some were born here, some were alumni of Valley Venture Mentors, some attended school here, and some are located here.
The investors were also tied to western Mass and included individuals, angel groups, and investment funds.
The start-ups ranged from enterprises that have already received significant funding to those that are currently bootstrapping and thinking about obtaining outside funds.
The process was somewhat similar to speed-dating. The start-ups pitched their businesses and then the investors were able to meet with them individually.
Investors were able to find companies they may (some day) have an interest in funding, and the start-ups were able to learn what the funders would expect of them.
Western Mass Demo Day was organized by Paul Silva of Launch413 in partnership with the other investor groups in the western Mass entrepreneurship ecosystem.
The event was held at the beautiful Valley Venture Mentors space in downtown Springfield.
Thirty-five pitches and their subsequent break-out sessions made for a long day, but Paul Silva’s unflagging energy, the valuable assistance of his team (Ethan and Will), and all the participants’ good humor and desire to make it work kept spirits high.
We’re looking forward to seeing you at the 2020 Western Mass Demo Day!
Your reporter, Rick Plaut, is a co-founder of Launch413, a member of River Valley Investors, and Entrepreneur-in-Residence at Smith College.
Have you heard? We’re a part of this event. If you are a startup or an investor with a connection to Western or Central MA, check it out!
Western Mass Demo Day Connects Local Startups to Investors.
This is an invite-only event for active & accredited investors to hear pitches from startups with a connection to Western Massachusetts. Startups get an optimized way to meet a room full of different investors, many with a strong interest in companies connected to the region. Investors get a first look at the startups, meet the founders, and network with other investors.
This event is organized by a coalition of the region's startup investors including: Launch413, River Valley Investors, Springfield Venture Fund, Milltown Capital, Alchemy Fund, Golden Seeds, the Maroon Fund, and the event is hosted by our friends at Valley Venture Mentors. For regulatory compliance reasons, representatives of other investment groups & funds who wish to attend need simply request an invitation. Members of the local entrepreneurship ecosystem who wish to observe may also request an invitation.
Value Proposition for Startups
If you want to raise money now or in the near future, Western MA Demo Day puts you in a room full of people with money, who actively invest in companies like you, and who are keen to be helpful. And... there is no fee to apply or participate!
Learn more & apply at: www.westernmademoday.com
By Eric Ashman
I’ve spent my career helping CEOs and founders build great businesses. My focus has always been on the business of entrepreneurship: how to operationalize a founder’s vision and create the operational and financial infrastructure for a company’s rapid growth.
It’s hard to condense all that goes into building a startup into a single blog post and I’m certainly not going to try to do that. So here are my thoughts on the basics of operationalizing entrepreneurship. I have written longer posts on some of these topics, so follow the links if you want to read more.
Managing Cash Flow
Don’t Raise Too Much Money Too Soon
Raising money = dilution for you and your team. You don’t want your valuation getting too far ahead of your business metrics, or the path to the next round gets much harder. Too much cash tends to hide fatal flaws in achieving product/market fit, and when the cash dries up, you might find you’re Wile E. Coyote running 50 yards beyond the edge of the cliff.
EBITDA Positive Doesn’t Mean Cash Flow Positive
Cash is king, and way too many founders don’t understand the cash flow of their business, which means they are driving 100 mph in the dark with their headlights off.
Don’t Run Out of Cash
Once you understand your cash flow, you need to make an honest assessment of your runway (how much time before you run out of cash). Now cut that time frame in half, because nothing ever goes as planned. Then make sure you have a plan for funding your business beyond that runway.
Are you consistently and predictably generating cash? Have you achieved product/market fit? And you’re profitable? No? Then avoid the trap of the awesome office space. It’s a fixed cost that will limit your flexibility, and right now you need to stay nimble.
Investing in Growth
I’ve seen a lot of high value, high cash-burn businesses flame out spectacularly over the years. They raise millions on hype and bogus metrics they’ve spent a pile of money to achieve, only to realize at the end that once they stop spending, the customers dry up, the revenue shrinks and there is no path to profitability. Run lean and mean until you hit product/market fit.
Set Short Term Milestones
You’ll be surprised at how fast time goes by when your head is down building your business. You need to set guideposts so that you can pick up your head and see if you are on track, or if you need to make adjustments.
Build a Great Team For Where Your Business Is Today
Don’t over-hire for your needs today, or you’ll often end up with people on board that are too senior for the level of work that’s required to get you to the next set of milestones. Reevaluate your team regularly and be prepared to level up your org as your business progresses. Hire hungry, humble and smart.
Pay Attention to Company Culture and Diversity From Day One
Follow the no assholes rule. Build a team of diverse employees that you want to work with, that you will want to spend a lot of time with. Build a culture of respect, inclusion, and acceptance of learning through mistakes and failure. Focus on this early, or you’ll end up with problems down the road that are very hard to unwind.
Fundraising, Board Management, and the Path to An Exit
Your Investors and Your Network Really Matter
Your investors and your board should bring with them a large network of relationships. And you should be developing your own network: other investors, strategic partners, future senior talent. The path to a successful outcome is built on the strength of your network. Don’t ignore it.
You’ve Raised Venture Capital. What’s Your Plan For Making Them Money?
Venture Capital is not built on altruism. It’s a highly competitive business built on a VC’s ability to produce outsized returns for their limited partners. Once you take venture capital, their success is tied to your success. Don’t ignore this dynamic, and don’t lose sight of their expectations. This can get complicated very fast.
Take Care of Yourself
Do something You are Passionate about
Are you prepared to commit the next decade of your life to building this business? Is this a challenge that you are deeply committed to? So many businesses fail after an incredible amount of effort. It can be soul crushing. If you aren’t at least focused on a problem you truly care about, the journey can be excruciating.
Besides being a Launch413 advisor, Eric is the former President and COO of Group Nine Media, one of the world’s largest digital-first media companies, and the former CFO of the Huffington Post. With over 20 years of COO/CFO experience building great companies, Eric helps founders get through critical inflection points in their journey. Eric has a passion for building companies, putting together great teams, and partnering with founders to help them realize their vision. More about Eric here: ericashman.com
What follows is an article by Launch413 advisor, Kate Putnum
What are SMART Goals and Why Should You Use Them?
Goal setting and planning are exercises that once completed are too often put on a shelf to be forgotten. In order to make planning and goal setting relevant, companies should constantly set SMART Goals.
Companies should begin by defining their mission, vision and values. Once these are determined, they will give context and guidance to setting relevant goals and explaining the why and how these goals will be met.
So let’s define relevant goals using the SMART acronym:
Specific: target a specific area for improvement
Measurable: quantify or define an indicator of success
Achievable: set a goal that can be met by a person or group to whom it is assigned
Relevant: determine the results that can be expected given available resources
Time-bound: establish a timeline of the expected progress towards accomplishing the goal, reinforced with feedback along the way
Other people use other words to define relevant goals such as strategic, motivating, assignable, action-oriented, ambitious, aligned with overarching goal, agreed-upon, realistic, resourced, reasonable, trackable, time based, time/cost limited, testable. All of these are designed to encompass the intent of the goal toward a vision, the ability to tell if progress is being made, and the timeline for doing that.
Usually SMART goals are based on one overarching long term goal. Generally, long term goals should not be planned out more than 3 years, and often, plans should be more immediate. As an example, a short term goal might be to make the most of a six month learning program, with SMART goals to help you do that. An overarching goal might be to profitably triple revenue in three years. This overarching goal is generic, but sets the stage for more specific short-term SMART goals that will help achieve your long term goal. These short term goals might include product development, HR and staffing, marketing, sales administration, accounting, etc.
All companies set goals to move forward, but effective companies set SMART Goals. Let’s look at the difference:
Attracting more customers is a common goal for most companies.
A SMART Goal would be to attract X number of customers who will buy Y by reaching out to 3X prospects through weekly social media updates, 50 weekly phone solicitations, 4 customer referral requests per week, etc. You can measure that SMART goal and change it when needed.
Another common goal would be to hire staff to sell more.
A SMART Goal would be to hire one incremental customer -facing staff per year, who is or will be trained to sell Y.
A subset of that goal might include creating a training manual, documenting and updating an effective sales process by X date, learning to interview to find the skills you are looking for by Y date.
SMART Goals work by breaking a big task down into achievable tasks and by looking strategically at all aspects of the business that are needed to support the overarching goal. Having monthly and weekly goals and measuring your progress will also tell you if you are making progress or need to change what you are doing.
Another way to approach the creation of SMART goals is to visualize what three years from now looks like for you. Sometimes your personal goals inform your business goals. If you are a sole proprietor looking to be able to take a 6-week European vacation in three years, then you already have a clear profitability goal to meet that challenge, a staffing goal to allow you to be away for that long. Conversely, your business goals might read like an encyclopedia but your personal goals include family time. In that case, you have to decide how to reconcile your personal priorities with your business priorities.
So can you each think about your overarching 3 year goal and one detailed goal that will help you make progress on the 3 year goal?
About Kate Putnam
Besides advising clients of Launch413, Kate is a recovering CEO, mentor, investor, and consultant who works with startups and small businesses. She has taught entrepreneurs and small business owners and worked with them to develop their plans and measure their progress. She recognizes that accountability plays a big part in moving a company forward. Her expertise lies in B2B but she has also worked with companies in the B2C space. She lives and moves around a lot in Massachusetts. You can learn more at http://kateputnam.com or https://www.linkedin.com/in/katherineputnam/
Will Bangs is working with Launch413 to scale his company, Music Box Licensing. This article was previously published in Adpulp.
Sonic Branding and The Sound of Newly Minted Money
February 18, 2019 by Will Bangs
Sonic branding is catching on. Just last week, Mastercard unveiled its new sonic identity not long after its move to a new wordless logo.
Mastercard, unlike so many other companies, recognizes the power of sound to help distinguish itself in a crowded marketplace. Furthermore, with the explosion of smart speaker devices on the horizon, the time is right for brands to figure out their sonic brand.
For brands or agencies taking the plunge into this emerging field, there are a few lessons I believe we can take away from Mastercard’s innovative campaign.
1. Sonic branding goes beyond mnemonics. Mastercard is smart to zero in on one core melody, and use it as a springboard for all other kinds of assets across consumer touch points.
The Mastercard melody is the foundation of the company’s sound architecture and the melody will extend to many assets, from musical scores, sound logos and ringtones, hold music, and point-of-sale acceptance sounds.
I predict that with enough time and consistency, this strategic approach to music will boost Mastercard’s brand equity.
2. The sound of a brand needs to be flexible to fit different markets and messaging. The core melody is adapted to connect with different cultural aesthetics. Listen to the change in style and instrumentation for Dubai and Bogota for example.
Thankfully, it’s not a one-size-fits-all situation. There’s nuance in tempo, harmony and instrumentation to fit different moods/tones for campaigns. The track Playful is great, of course, for more lighthearted and upbeat spots, whereas Soundscapes is perfect for a more serious, emotive spot.
3. A sonic identity should help consumers feel the brand’s values. Mastercard’s CMO, Raja Rajamannar, said that Mastercard should convey “safety and security.” The creative choices of the composer, Mike Shindoa of Linkin Park fame, makes sense on a gut level but the music translates to the brand values on an analytical level as well. The melody is in a major key — the sound associated with good feelings as opposed to a minor key, which is sad. The melody rises and resolves back to the root note — the musical home of the key and a reflection of the card’s functionality sliding up and down at checkout.
Have Sonic Backdrop? Will Play
Mastercard has the ingredients in place. Now it just needs to be consistent and patient to let that little earworm work its way into our collective memories, while serving as a sonic backdrop to the values of the brand. To Fast Company’s ears, “The company’s sonic logo is something akin to a folksy Coldplay cover.” A brand could do worse.
Sonic branding is not new, but the time is ripe for more businesses to develop their own. According to Techcrunch, voice shopping is set to hit $40 billion by 2022. “Audio identities not only connect brands with consumers on a new dimension, they help consumers to shop, live, and pay in an increasingly digital and mobile world.”
“With the explosion of podcasts, music streaming, and smart speakers, an audio strategy is no longer a “nice-to-have” for brands — it’s a necessity. A sonic identity — the audio calling card for a brand — is now just as important as a brand’s visual identity,” says Gimlet’s co-founder Matt Lieber. Gimlet, the podcasting behemoth, was just acquired by Spotify for hundreds of millions of dollars. It was also started by one of the pillars of This American Life, Alex Bloomberg. Needless to say, they know their audio.
Will Bangs is the founder & CEO of Music Box Licensing, a creative agency that brings brands to life through music. Will is a lifelong musician and an accomplished composer. He has written music for several award-winning independent films. Prior to founding Music BoxLicensing, Will was a public school teacher who was honored for his work by the Harold Grinspoon Foundation. He is an alumnus of Valley Venture Mentors, a startup accelerator, and holds a Bachelor of Arts from Hampshire College and a Master of Education from Smith College. Will lives with his wife and daughter in western Massachusetts.
An Interview with Steve Rubin, Launch413 Venture Advisor
Why should any enterprise have a strategy and goals?
Creating a base strategy provides an organization with purpose and direction. It informs the constituents about the purpose of the business: what the business is attempting to accomplish, in what time frame, and, if successful, what benefits will accrue to its customers. Goals are the objective milestones that allow a business to assess how well the business is performing against its strategy. Having a clear strategy and goals that can be shared across the enterprise will guide the enterprise’s core actions, resource allocation, and the prioritization of decisions.
Is setting strategy and goals more important for an early-stage business or a mature business?
It is equally important for both early-stage and mature businesses to have a strategy and goals. Sometimes the exercise of developing a strategic plan is seen as time-consuming and difficult, but it can be a simple process. For some, a first-pass plan can be developed with just a couple of hours' effort. Whether you've just launched a new venture or lead a larger, more mature business, having a simple but clear direction and small set of goals that guide actions is critical.
Have you worked with companies that didn't set a strategy (or didn't do it well)?
I've worked as a line manager at some companies and consulted for many others where the businesses either didn't set strategy and annual operating plans, or did it poorly. It's really about the readiness of a business to embrace a simple process of visioning, planning, and aligning resource allocation. Again, setting strategy shouldn't be complicated or cumbersome. The key is to match the effort to the culture and capability of the organization. The strategy doesn't have to be perfect; what's most important is to get started and iterate from there.
How have you helped companies to set strategy and goals?
Typically the leadership team starts with a quick exercise to define the purpose of the business: what the organization does, for whom, why, and how. Then they set some short and mid-term goals that establish milestones for what needs to be accomplished. Next the leadership team identifies and prioritizes the key cross-business actions required to achieve these goals. Finally, a method is set up to regularly track progress and adjust as needed. Ideally, tracking happens naturally as part of an existing process such as monthly operating reviews, product planning or customer success meetings.
What have you found to be the keys to success?
First, identify a senior sponsor upfront to encourage employees to participate and embrace planning and change efforts. Second, find a compelling reason for change. When companies are forced to deal with a crisis, change feels natural. Without a crisis, companies need to create that sense of urgency to motivate their teams. A third key to success is an honest assessment of the current state, capabilities, and opportunities which will guide the company in the right direction. Finally, successful teams must track progress on a regular basis making sure they accomplish what they intend to achieve.
How long does it take companies to right themselves?
It varies by company and how successfully they embrace the process. Early wins will reinforce the team's efforts and lead to more success. Those that lean in tend to get results quickly, usually within six months. For some companies the change takes longer.
What if companies fail to follow through?
I wish all companies would heed the advice and tools provided, but realistically that's not always the case. Some of my clients have acted slowly or have allowed distractions to interfere. For them, the results have been more muted, or have taken longer to achieve than other companies that have embraced these efforts and acted quickly.
Did any companies that followed your advice still go under?
Strategic change never happens in a fully-controlled environment, and unfortunately, most companies are faced with a number of unforeseen challenges. I've found that companies that have implemented a strategic plan, set corporate goals and aligned resources, and cascaded the plan and results throughout the organization are the companies that are able to persevere through tough times.
When is the right time to work on setting strategy?
Ideally, develop a plan early on or before the beginning of a new year; however, setting a strategy at any time is better than not doing it at all. Once an organization implements a planning process, it's able to start reaping the benefits.
How does an enterprise know when they should be calling you for help - what are the warning signs?
Founders and leaders typically realize they need some help when their organizations are under-performing, or when their teams are spending more time reacting to issues rather than proactively building for the future.
Where did you learn to do this stuff?
I began my career at GE when Jack Welch ran the business and it was known as one of the best run organizations in the world. Most of the tools and practices I still use came from what I learned as an operator and leader at GE, as well as my time as a consultant at Schaffer Consulting, a great change and performance management practice in Stamford, CT. One of the early lessons I learned was that the best strategies and tools are ones that are simple, easy to understand, and even easier to implement. If things are complex to understand and implement, the chance of success drops significantly. I've been an entrepreneur, operations leader, consultant and advisor for 30 years now. I love helping businesses and their leaders become stronger and accomplish their goals.
What follows is an article by Launch413 advisor, Jim Geisman.
Pitch: n. Slang for investor presentation. An event where one party uses their mouth to pry open another party's wallet.
For many entrepreneurs, a high point in a founder’s journey is the investor presentation. Entrepreneurs spend a lot of time trying to distill the essence of their deal down to ten or fifteen slides that can be presented in 15 or 20 minutes. Sometimes an investor presentation is even shorter than that (like at Valley Venture Mentors). Unfortunately, many times the presentations do not do justice to the business concept.
Here are twelve mistakes entrepreneurs make when presenting their projects. Avoid these mistakes so your presentation will be effective and improve your chances of raising money.
Field of Dreams Just because you can build a product does not mean customers will buy it. Focus on building the business not just building the product. Investors care more about building businesses and the value of an asset than they do about building a product (or services).
Technologie Über Alles Many markets, especially online ones, are maturing and attracting more and more customers with less and less technical knowledge. Make sure to focus on how your technology creates benefits that the customers will pay for. Companies win more customers these days with better marketing and customer focus, not by touting their superior technology.
Gold Plated Pistons Automotive engineers and car racers care about the pistons buried inside a car engine. Most folks only care about driving the car. Make your product features meaningful, easy to understand, and obvious. If you have to peel away a lot of layers to get to any meaningful features, you may have a me-too product.
Following the Puck A famous hockey player said his success was knowing where the puck was going — and being there at the right time. Too many entrepreneurs are following today's products and markets. Describe how your product strategy anticipates the future. If you want to lead, be out front with something others will want to follow.
Chinese Glove Fallacy A glove-making entrepreneur once claimed he would build a "big business" by getting a small share of a huge market. Oh really? The devil is in the details. How will your product make its way to your customers through your sales and distribution networks?
The Rising Tide This common mistake is related to the Chinese Glove Fallacy. While it is better to sell into a growing market instead of a shrinking one, growth markets do not guarantee success. Describe how you will differentiate your products, or otherwise create a competitive advantage, so you can grow with the market.
More Is Less All deals consist of a lot of details. Don’t overwhelm or bore investors with irrelevant details. Effective presentations focus on a few details that are important to the deal. Keep it simple. Don't talk faster, instead get rid of excess information.
Put a Face on the Deal Customers and companies are faceless. Everyone, including investors, like stories so talk about people using your products in their activities. Give your product or service character. Turn your company's products or services into a human interest story. Markets don't buy products. People do.
Let Mikey Eat It In a TV ad, some kids wonder if a cereal tastes good so they let Mikey try it. Companies who rely on letting their distributors or other intermediaries do their sales and marketing are doing the same thing. Investors know intermediaries respond to demand and do not create customers. Make sure you can identify and sell your product directly at least a few times. Know the way so you can show the way.
What's the Deal An investor presentation that doesn't describe what you want is a sales presentation that doesn't ask for the order. Forget ROI. Forget valuation. Describe how much money you want and how you will use it. Then ask for it.
The Empty Suit No matter how great your acting skills, acting can't overcome a presentation that lacks substance. Investors look for presentations with substance, based on logic, delivered with conviction. Describe your deal with cold facts not with hot air.
Mouth Open Ears Shut An investor presentation should not be a monologue or a lecture. If an investor asks questions or offers suggestions, listen carefully. Aside from common courtesy, you may learn something. You may also learn that the investor is watching how you react to being challenged or how you consider alternative viewpoints. If you have all the answers, make sure you are answering the right questions.
In addition to being an advisor at Launch413, Jim Geisman is a consultant to entrepreneurs and senior managers at business-to-business (B2B) companies, helping them develop business and revenue models that allow their companies to grow and get funded. He has a unique, detailed understanding of how marketing, sales, business development, finance, and operations work together to achieve success.
Jim consults internationally on issues of software pricing and deal structuring and works to help companies solve some of their toughest pricing problems.
Jim mentors at Valley Venture Mentors. He is also a mentor at the MIT Enterprise Forum of Cambridge, serving on their Board and running their start-up clinic for 10 years where he was exposed to hundreds of companies and their business plans.
Before starting his consulting career in 1982, Jim held marketing management positions at Tektronix and Apollo Computer. He performed the first throughput tests on the forerunner of the Internet when there were only four nodes.
Jim holds Electrical Engineering degrees from Tufts and an MBA from Harvard.