Feel the Boot

Watch the video: https://ftb.bz/impostor-videoRead the blog: https://ftb.bz/impostor-blogThe topics for these blogs come from the things I discuss most often with founders. Once they have started to trust me, they almost always talk about how they feel like frauds who will soon be caught and exposed. Even the most talented and successful feel this way. That is when I tell my favorite anecdote from author Neil Gaiman. http://journal.neilgaiman.com/2017/05/the-neil-story-with-additional-footnote.htmlSome years ago, I was lucky enough invited to a gathering of great and good people: artists and scientists, writers and discoverers of things. And I felt that at any moment they would realize that I didn’t qualify to be there, among these people who had really done things.On my second or third night there, I was standing at the back of the hall, while a musical entertainment happened, and I started talking to a very nice, polite, elderly gentleman about several things, including our shared first name*. And then he pointed to the hall of people, and said words to the effect of, “I just look at all these people, and I think, what the heck am I doing here? They’ve made amazing things. I just went where I was sent.”And I said, “Yes. But you were the first man on the moon. I think that counts for something.”And I felt a bit better. Because if Neil Armstrong felt like an imposter, maybe everyone did. Maybe there weren’t any grown-ups, only people who had worked hard and also got lucky and were slightly out of their depth, all of us doing the best job we could, which is all we can really hope for.Impostor SyndromePeople with impostor syndrome engage in a psychological pattern of doubting their competence and accomplishments. In short, they feel like frauds. They attribute any successes or recognition to either luck or deception. A UK study https://www.thehubevents.com/resources/impostor-syndrome-survey-results-116/ shows just how common this is, with 85% of people admitting to feeling inadequate or incompetent at work. Most of those people suffer in silence because they think they are alone in this. Only 25% are aware of the existence of impostor syndrome. Entrepreneurs with these feelings are often paralyzed with self-doubt, harming their businesses and chances for success.I experience impostor syndrome all the time, despite any objective evidence to the contrary. For example: I studied astrophysics in graduate school. I founded a company and brought it to a successful exit. I have been invited to speak at conferences around the world. I have dozens of published articles. I am regularly sought out as an authority on multiple subjects.Yet, I had a hard time writing that paragraph or believing those statements. In particular, I feel impostor syndrome every time I write or record for Feel the Boot.I suspect that impostor syndrome is even more common among entrepreneurs than in the general population. We are high achieving people with high expectations. Our role models tend to be the most successful founders and CEOs in the world, people like Steve Jobs, Elon Musk, or Jeff Bezos. If they are our reference for what we should be as founders, it is no wonder we feel that we fall short. We also tend to surround ourselves with amazing people, far above the average, which skews our perspective on our qualities.Anti-Impostor SyndromeThere is a mirror image to impostor syndrome in a set of people with no doubt about their worth or ability. Interestingly, where people with impostor syndrome underestimate their competence, this other group generally overestimates it.The Dunning-Kruger effect describes this odd relationship where self-assessed competence is often inversely proportional to actual competence. High performing entrepreneurs tend to assume that everyone around them is at or above their level.I think that part of this has to do with knowing what we don’t know. The greater your knowledge of a subject, the more you understand the vast extent of your ignorance. With each increase in knowledge or skill, we simultaneously discover an even larger set of new things about which we are ignorant. In my experience, true experts are humble in the face of the ocean of unknowns they can see.Conversely, people who only know a little often think that is everything there is to know.A Vaccine Against Impostor Syndrome.Just recognizing the existence, and near ubiquity, of impostor syndrome among founders can go a long way to reducing its impact. Thinking of Neil Armstrong’s self-doubt gets me through many crises of confidence.Knowing that we tend to undervalue our true areas of expertise, try to take a hard and realistic look at your abilities. Recognize where you are strong, and hire or otherwise compensate for the areas where you are objectively weaker.One path to recognizing our strengths is to start taking compliments seriously. If you regularly hear positive and specific statements about yourself or your work, believe them!Many of us suffer needlessly with this problem because we think we are alone. Entrepreneurs are constantly selling and pitching, and one of their key products are themselves. We often try to create an image of the perfect confident leader and visionary. It would be healthier for all of us if we could, even just in private with each other, admit and share these feelings. It goes a long way to reducing the burden. The community of entrepreneurs is powerful. We need to leverage our networks for mutual support far more than we do.

When I talk to startup founders or angel investors, one topic has started to dominate the conversations: the lack of A round financing.Video: https://ftb.bz/a-round-videoBlog: https://ftb.bz/a-round-blogPodcast: https://ftb.bz/podcastMany founders and seed stage investors have a story for how a startup will grow. Initially friends and family will fund early prototypes. About six months later, once there is some traction and market interest, angel investors will fund the work required to demonstrate product market fit. Six months to a year after that the company will close a $5 million series-A round that will fund explosive growth.But in reality, it is taking much longer to reach that A round investment, often a number of years. So the CEO needs to find other ways of funding the business until it happens, or skip further funding entirely.I am working with several companies right now that: have working products, that customers like, are growing, and generating revenue. Yet, after multiple years of effort, they still can’t close that A-Round.The problem with A rounds is structural. Funds are getting bigger which leads to larger investments. Investments of any size require a similar amount of work from the VC firm. With a larger amount of cash to deploy and a roughly constant amount of labor available, the rounds need to be larger. Rather than investing $5m, I am hearing that many investors won’t invest less than $15m.Of course, with that larger investment comes higher expectations. Reaching those higher hurdles takes longer and consumes more cash. The entrepreneur typically needs to to back to angel and seed round investors multiple times before they clear them.At Anonymizer, we raised a total of $2.5 million over about 7 years, all from angel investors. The slow growth in the consumer space never got us to a place where we could bring in VC with their larger investments, even in the more permissive late 1990’s environment. As it turned out, that saved us when the market crashed in 2000 because we were small and lean, unlike some well funded competitors who had high burn rates but no prospect for additional money.Other than in the medical space, which seems to have its own set of industry specific hurdles, I am seeing three paths to A-round funding.The first is to be growing exponentially. While 30% year over year growth is respectable, the VC are looking for 30% month over month, doubling every quarter. In addition to that, they are looking for strong fundamentals and unit economics. Finally, they want to see a clear path to continued growth at that pace. With all that in place, the investment decision is fairly easy.Another path is to have the right history or some unfair advantage. If you have multiple massive prior exits investors are much more likely to take a chance on this next venture. Similarly, if you have a rockstar team of people with track records of amazing execution, they will have more confidence that they can do so again. Finally, investors tend to move as a herd. If you have extremely impressive investors in your seed round, they will know the general partners at the VC firms and be able to leverage their reputations to secure the investment.The final path is to create enough track record to remove the risk. If the company has been executing for several years showing reasonable growth and reliable results, it will be in a position where a $15 million investment is warranted and relatively safe.Anonymizer never did raise an A round. Once we did our big pivot towards the national security community we started generating revenue faster than we could effectively spend it. While the VC might have been interested in us, we no longer needed them.Like Anonymizer, you might choose take many small investments until the company is self sustaining. Alternatively, you might be able to bootstrap the business with little or no funding at all.Sometimes the problem with growth is timing. The market forces and conditions are not yet right for your business. If that is the case, and you are confident they will be aligned soon, then just surviving till then can be the right strategy.Finally, it might be a sign that your business model is just not going to work. You either need to pivot to something that will generate the growth you need, or you should wind things down and look for a new opportunity entirely.Fortunately, two companies I have helped recently scored A-Round funding. One through the medical device exception, and the other through the long track record of reliable growth approach.The key is to build your business in a way that it can succeed even if the A round funding take much longer than expected or never happens at all. Model your finances without that investment to make sure the company has a viable plan B for survival and success. In this new reality, angel and seed investors need to see that kind of robust business model.

Almost all successful companies share one thing in common: a pivot. When your startup hits a wall, the best path may be to change direction to go around it, rather than trying to bash your way through. Learning and adapting can be the best path to growth and success.Video: https://ftb.bz/Pivot-videoBlog: https://ftb.bz/Pivot-blog

Entrepreneurs are always enthusiastic about their next business idea. They often avoid asking the hard questions that could undermine their plans. In this episode, I explore the importance of testing your assumptions and how to actually do it. Early experiments will reduce your risk and impress potential investors.Video: https://youtu.be/MLJQMRIIm7QBlog: https://FeelTheBoot.com/blog/test-driving-your-business

Everyone has been told to follow their passion. What they don’t learn is how to identify and leverage that passion. That energy is the unfair advantage of the best entrepreneurs. This episode shows how to connect your business to your passion with examples from my own path to startup success.Video: https://youtu.be/_4NvC0SEU3QBlog: https://FeelTheBoot.com/blog/powerofpassion

When you are raising funds for your startup, one of the biggest questions is, How much should I ask for? Don’t let concerns about dilution tempt you into raising too little money in your investment rounds.Video: https://youtu.be/20NbJ9LxTagBlog: https://FeelTheBoot/blog/raising-enough-capital

One of the most frightening moments as an entrepreneur is when you finally quit your day job. Fortunately you can risk reduce that transition and improve your chances for angel funding at the same time.https://youtu.be/jUY-Vjz83lohttps://FeelTheBoot.com/blog/quityourdayjob

I lose interest in most of the pitches I see within the first thirty seconds. After that, it is incredibly difficult to get me back on board. This is a common experience with most investors. I am going to share with you what goes wrong and how to nail the opening of your pitch.Video: https://youtu.be/88FOE093LsQBlog: https://www.feeltheboot.com/blog/hook-investors

Most growing startups quickly reach a point where they are choked by the founder’s limited time. As humans, we simply don’t scale well. There is only so much that efficient work and forgone sleep can squeeze out of a day. The problem is that the entrepreneurs need to delegate more of their responsibilities. This is not an intuitive process for most of us. The typical career path is all about accumulation responsibility and power. Rising through the ranks and building ever larger fiefdoms. As a founder, you go through the opposite process. Founders start off doing literally everything. They are CEO, accountant, customer support, and janitor. Between there and running a large successful company, they need to delegate almost all of that.Video: https://youtu.be/S_KTNIM5UMsBlog: https://www.feeltheboot.com/blog/delegation

I recorded the video for this episode in a hotel room while evacuated from my home because of the Kincade fire in Northern California. I wondered if I should just skip this episode because I was feeling very stressed and distracted. I decided that it might be interesting to do a short episode about how sometimes life makes you look at where your true priorities lie. Video: http://bit.ly/2pCGfWa Blog: http://bit.ly/32a7qVtVideo: http://bit.ly/2pCGfWaBlog: http://bit.ly/32a7qVt