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Feb 11 2013

Philip Brown’s Review Of Do More Faster

Guest Post By Philip BrownYellow Flag – (Founder) 

Do More Faster“Do More Faster: Lessons to accelerate your startup” is a book of advice and learnings that have derived from the technology accelerator program, TechStars. Do More Faster is written by TechStars founders David Cohen and Brad Feld and includes contributions from many of the mentors and past participants of the program.

TechStars in a mentorship accelerator program that started in Boulder, Colorado, but now has classes in Boston, New York and Seattle. Successful applicants take part in an intensive 3 month accelerator program where they get access to mentors in order to create successful companies. At the end of the program, the startups have the opportunity to pitch their company to Angel Investors and Venture Capitalists.

Do More Faster is based upon 7 themes of what it takes to start a successful company. Each theme contains lessons that mentors and previous TechStars participants have learned through their entrepreneurship endeavours.

The 7 themes of Do More Faster are:

  1. Idea and Vision
  2. People
  3. Execution
  4. Product
  5. Fundraising
  6. Legal and Structure
  7. Work-Life Balance

Idea and Vision

Part of the application process of TechStars is submitting an idea that the team will work on. This can either be a currently operational company, or merely just a vision for what is hoped to be achieved. In either case, TechStars accepts applicants based on the merits of the team, and not the idea.

It is this freedom to change ideas that allows TechStars participants to pivot into a completely different opportunity should the current assumptions reveal themselves to be wrong. This freedom enables a more iterative approach to finding a really big business opportunity.

A second common theme around ideas in TechStars is that ideas are worthless and execution can’t be copied. New entrepreneurs are often scared to share their idea in fear that someone copies them. The mentors of TechStars encourage participants to share their ideas with everyone in order to gain feedback and test their assumptions. Execution is really the most important aspect of creating a successful company. Even if someone else is working on the same idea, the execution of that idea will usually be quite different.

TechStars encourages applicants to get their ideas and products out into the open as quickly as possible, talk to customers and focus on the one thing that they can really do well to solve an important problem. All of these things can seem inherently difficult to first time entrepreneurs. By exposing an idea to the world, you gain feedback on it’s value and you are able to progress the opportunity quicker.

People

The second theme of Do More Faster is People and how it is the people that are involved in a company that really make the difference. TechStars is a mentorship driven programme and so it values the input of people within the community, mentors and fellow company founders.

The majority of TechStars companies are founded by at least two co-founders. Whilst it is possible to found a company as a single founder, it will require you to take on more work and stress if you choose to go it alone. A co-founder can not only do half the work, but she should also be a sounding board for ideas, advice and a comrade when the going gets tough.

The early employees of a company are really important for creating a good company culture. The culture of a company will usually originate from the actions and attitudes of the founders and early employees, so it is extremely important to choose the right sort of people who you want to work with. Skills and experience can always be taught over time, but a bad attitude will be like a cancer in your company. Many of the TechStars mentors advise to hire for culture and to hire slow and fire fast. If someone is not working out as an co-founder or an early employee you need to do something about it as soon as possible.

Execution

As mentioned in the Ideas and Vision theme, TechStars value a team’s ability to execute their plan. An idea is worthless without execution, and so the TechStars mentors push the participants to continuously and relentlessly execute their vision.

As the title of this book suggests, one of the mantras of TechStars is “Do more faster”. This does not mean reckless execution, but rather, creating a feedback loop to test and prove assumptions as quickly as possible. If a team can prove that an idea will not work, they can more quickly move onto an idea that will work. As a TechStars participant, you are encouraged to make decisions quickly, even when you don’t have all the information. A quick decision is usually better than a delayed decision, especially when the company is young.

Startups have a lot of disadvantages against established incumbents. Startups have no money, no customers, no partners and no leverage. However, Startups have nothing to lose and so they can take risks or focus on one precise opportunity without having to maintain legacy customers. If a Startup can’t take risks and move quickly with little information, they lose the one advantage they have over their established competitors.

During the 3 months of a TechStars program, each team will be getting a lot of different advice from some very experienced and respected mentors. TechStars teaches it’s teams to treat everything as data, and they should use their own synthesis of the various bits of data in order to make a value judgement on the future of their companies. This could mean completely neglecting the advice of a mentor, and instead, doubling down on an insight from a customer or a gut feeling.

Many of the lessons of TechStars can also be found in Steve Blank’s The Four Steps to the Epiphany and The Startup Owner’s Manual, or Eric Ries’ The Lean Startup.

Product

The product is obviously one of the most important aspects of a company because it is the product that becomes synonymous for Customers. Many Entrepreneurs will try to build a product from their vision or an assumption, when really, a product needs to be created for a market opportunity.

As mentioned above, TechStars teaches it’s participants to move quickly. TechStars companies are encouraged to get their product into the market as quickly as possible. Many founders will be scared to put out a product that is not finished, not polished or lacking in features. However, it is this scope creep that will handcuff the company from ever releasing the product. The quicker you get a feedback loop with your customer, the quicker you can achieve product-market fit. As the old saying goes, “If you are not ashamed of your first release of your product, you launched too late”.

Part of launching a product is dealing with either established or new competitors. Every good idea will have competitors in some form, even if they are not directly competing against you. It’s important to find your differentiation and to market yourself as a clear solution to a concrete problem. Going after the entire market is too big for any company, you must find a single customer cohort, and a single opportunity to attack first.

When you are excited about your product and you are starting to gain traction, it can be difficult to stay focused on the current goals of the company. Usually as a startup, you will have an assumption of a market opportunity that you should try to either prove right or wrong as quickly as possible. Along the way you will have business development deals, partnerships, and new possible market opportunities at every turn. It’s important to stay focused on completing the current goal of the company before starting to chase every opportunity. Working with large companies can be great for distribution, but the opportunity cost of neglecting your other goals can be worth even more.

Creating companies on the Internet has a huge advantage over traditional companies in that you have a wealth of data about every possible metric. You can accurately track your marketing and how every penny you spend converts into revenue. You can track how your product is being used, how it is growing, are your customers coming back, or are they getting stuck or confused on a certain aspect. None of this data is available to traditional companies. The wealth of data that is available can be overwhelming. It’s important to only track the things that are important to your product and your opportunity. Tracking the wrong metrics can be worse than doing no tracking at all.

Fundraising

Whilst fundraising is an important aspect in the lives of many of the startups that go through TechStars, each of the participants are encouraged to take a step back and question whether they actually need to raise money at all. Some of the most successful TechStars alumni are actually bootstrapped companies that took no investment at all once the program had concluded.

Raising money might seem like the natural next step, but it is actually not such an easy decision. When you take money from an investor, you are giving away part of your company and you lose at least some control. Investors are looking for a return on their investment and so they plan for a liquidity event at some point in your company’s future.

Bootstrapping a company can mean slower growth, but you retain full control over your company and you are not forced into a liquidity event.

Recently there have been many startups that raise money when they really don’t need to. Some companies are capital intensive, or it will naturally take a long time to get to cash-flow positive. These types of companies need to raise investment or they could never get off the ground. However, it’s highly unlikely that your Software as a Service startup needs to raise money to get started.

If you are looking to raise investment, taking part in a program like TechStars will make the process considerably easier. You will be introduced to the right type of investors through mentorship and you will be immersed in a community of people who you can ask questions and get the right type of advice. Fundraising is a full time job, and so anything you can do to smooth the process will be beneficial to your startup.

Legal and Structure

When you are starting a company, it’s important to remember the legal and structural implications of doing so. During the life of the company, you will be entering contracts, taking on debt, handing out credit and dealing with partners, customers and competitors. It is your responsibility to ensure that the legalities of your company are correct before taking further steps.

You should ensure that your company is recognised as the correct legal entity. Choosing the wrong structure could lead to personal liabilities should your company default or you become involved in a legal battle.

Your relationship with your co-founders should also be drafted in a legal document. Equity agreements, vesting schedule and Intellectual Property rights are important things to get right from the start.

Nobody starts a company with the expectation that something could go wrong, but it is your responsibility to take the correct precautions just in case. When you start a company with a co-founder, you expect to be both committed to the vision of the company. But outside events, or a change in personal circumstances can dramatically change things very quickly.

Despite a lack of money in the early stages of a company, you should invest in a startup lawyer who has a lot of experience of dealing with companies in your situation. General purpose lawyers won’t have the same expertise or guidance that a specific lawyer will have, and so it will mean you will have less problems further down the road when the legal agreements are actually needed.

Work-Life Balance

Starting a company from scratch can seem like a tremendous amount of work in the beginning as the future success of the company is entirely in your hands. Striking the right work-life balance is important because it is likely going to take years to really build a successful companies and so no-one can sustain an all work-lifestyle for that period of time.

It probably goes without saying that you should only start a company in an area that you are passionate about. When you naturally combine your interests with building a company it means you can dedicate more time to not only working on your company, but also acquiring knowledge of your domain.

But even still, it’s important to be able to escape the pressure and work-load that you are putting yourself under so you can continue making the right decisions for the future of your company.

Conclusion

Do More Faster is a fantastic book for anyone who is interested in building a startup. The book is comprised on many very short essays on lessons to learn. This make it very easy to read and to take actionable advice in very small chunks.

TechStars has become a world-renowned model for mentorship-driven entrepreneurship. If you are interested in applying for TechStars, or simply want to take the lessons and advice and apply them to your startup, Do More Faster is definitely worth your investment.

Buy Do More Faster: Lessons to accelerate your startup on Amazon (Affiliate link)

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Aug 21 2012

Why Do Startups Even Need A Board

Lets face it. As founders and entrepreneurs, you have much to do – getting to your minimum viable product, developing customer interaction, hiring team members (when you have no cash) and managing the accounts/books (when you have some cash).  Sooner or later, you have a board of directors, three to five (or even seven) Type A personalities who seek your attention and at times will tell you what to do. What a pain in the rear! Or are they?

A Board of Directors is formed as soon as you raise your first outside round – if its a smaller amount from angels, crowd-funding or F&F (Family and friends, or in some cases fools and friends), you can get away without forming a board. But we strongly recommend establishing an objective outside group that would:

(a)  understand your startup’s milestones

(b)  help you get to your milestones faster

(c)  hold you accountable if you don’t get there.

Prior to funding, this could be a mentor, or a smaller group which acts like your training wheels for a formal board setting. We will get into some of these “corporate governance” nuances in greater detail in the following blogs.

Lets take a step back and understand how humans behave.

1)  We believe our own hubris much too often: As an entrepreneur, you are the one to change the world. But when do you know it’s hubris versus progress? More often, entrepreneurs are strong headed and do not take ‘no’ for an answer. But this very attribute can become a detriment when the markets change, competition becomes stronger, or regulatory forces can kill your startup. An outside individual is  not as vested – they can see the forest and are not caught up in the minutiae. Take the example of a researcher who invented a cool technology – having received rave reviews in business magazines and featured in the “Best of…” columns, this founder felt like there was a billion dollar opportunity here. After two years of playing around and having burned over one million dollars, the researcher still believes there is a billion dollar market. Product development status is stagnant, markets have moved on, competition has invented products that are 10X cheaper and in all practical realms, the opportunity is over. But this is the founder’s baby and he still continue to try and make it work, when every indication says, its done.

A good board member, who is honest and bold will call this out and save the researcher from his own hubris. Families go bankrupt and entrepreneurs lose it all when such paths are unchecked. Consider former entrepreneur and VC Jeffrey Bussgang’s example (quoted in his excellent book, “Mastering the VC Game”). When his sales pipeline did not turn into contracts, one of his board members pulls out a pen in a board meeting and says, “All I want to know is which of these prospects / companies would you have signed contracts with…by the next board meeting” – that push, writes Jeff, focussed the team. “I don’t think I spent a moment over the next 30 days without wondering how the heck I was going to close those contracts we had promised. Fortunately, we closed them all”  writes Jeff. Now, that’s the value of a good board member – he pushes you without being a pain. And you as the CEO gets the spotlight and the glory.

2)  We are not as rational as we think we are: Hiring decisions, go-to-market and other decisions can often be made by the seat-of-our-pants. After all speed matters so why get into a protracted process interviewing or doing personality tests. Your dorm mate and beer buddy are great “Ruby on rails” ninjas – go get them and throw in a bit of stock options as well. But more often than not, such decisions lead to losses and delays in product development / launch. Its even more painful to fire your beer-buddy – you have never done it before. A good board will help with process, ask the right questions, and develop guidelines. They could bring in a rational approach and slow that bullet train down…. just a wee-bit so there are  no proverbial train-wrecks.

3)  We like to stay in our comfort zone: By far, this is the one challenge which affects individuals more than anything else. You might be able to code but may not be people-persons – or have no idea how to manage a team. People have egos, emotions, dreams and aspirations – machines don’t. Its a lot easier to deal with machines.  On the other hand, a people-Pollyanna entrepreneur could be on off-site treks and kumbaya all day without meeting the key milestones. In either case, we do not like to always grow, learn, and get out of our comfort zone. Staying in the warm pool is easier than getting out in the cold. In such a situation, a board can objectively point out that the team needs to be complemented.

4)  We lie too often and then rationalize it: In his classic book, “The Honest Truth About Dishonesty: How We Lie to Everyone—Especially Ourselves author Dan Ariely narrates a number of fascinating studies to show that “locks are put on doors only to keep honest people honest” – it took a while for us for that statement to sink in. And as bizarre as that may sound, consider his research which shows most of us lie every now and then. We need to save face, look smart or keep the peace. We pretend its fine as long as no one is looking. But a good board member is looking with eyes wide open. And when someone is looking we behave differently. Let your board be your guide and “keep you honest.”

Such can be the immense value of a good board – keep you on track, call you out when you flail, help you and in some cases save you from yourself. Such human behavioral challenges are primal – this is not meant to be critical of our behavior but an educational forum where we try to get better.

Do you know of other such challenges when our hubris exceeds our intelligence?

May 3 2021

Startup CXO: About the Authors

This book names Matt Blumberg as its principal author, he wanted to make clear he is not THE author, but AN author. The book has a very large number of contributors and external reviewers and you’ll probably notice a different “voice” for each Part. That’s what you should see with multiple authors, but despite the various perspectives, we’re all focused on providing a playbook for each functional area including the “mistakes” we made, what we would do differently, and what worked really well. Each Part has one or two principal authors who have the experience, credibility, and expertise to share something of value with others in their specific functional disciplines—most of my Bolster co-founders are writing Parts, and the others are being written by former Return Path executive colleagues or members of Bolster’s network. And that is a good lead-in to a few caveats before you embark on the book.

First, although most of the book is being written by former Return Path executives, it is not meant to be the Return Path story. Every author here has 20–30 years of experience working at 

multiple companies of different sizes and at different stages and in different sectors on which he or she is drawing. It’s also not the story of Bolster, the new company that a number of us started 

earlier this year, although Startup CXO is pretty closely related to Bolster’s business of helping assess and place on-demand CXO talent. 

Matt Blumberg. Matt has spent his entire career creating startups, scaling them, and sharing best practices of what works and what doesn’t work for other CEOs and team members in the entrepreneurial community. He is the author of Startup CEO: A Field Guide to Scaling Up Your Business (Wiley, 2020), a highly influential book embraced by entrepreneurs, CEOs, founders, and board of directors in the entrepreneurial ecosystem that was an outgrowth of his blog, OnlyOnce. In 1999 he founded Return Path, an innovative email marketing company, and helped grow it to $100mm in revenues and to a successful exit in a strategic sale to Validity in 2019.  Along with a number of his colleagues from Return Path, Matt started Bolster in 2020, a company focused on helping startups and scaleups grow, develop, and scale their leadership teams and boards. Bolster’s unique combination of heavily curated executive talent, tools, and services provides a new way for CEOs to assess and benchmark their executive teams and boards and provides a new avenue for on-demand executives to work with startups and scaleups. 

Before Return Path, Matt led marketing, product management and the Internet group for MovieFone, Inc. (later acquired by AOL). Prior to that, he served as an associate with private equity firm General Atlantic Partners and was a consultant with Mercer Management Consulting.  He also co-founded and chairs the board of Path Forward, a non-profit created and spun out of Return Path. Path Forward’s mission is to empower people to restart their careers after time spent focused on caregiving by working with companies offering mid-career internships. Path Forward gives women and men a path to a professional career, while giving companies access to a diverse, untapped talent force. Matt earned his A.B. from Princeton University.

Peter M. Birkeland. Pete is a sociologist, author, and collaborative writer. He has spent his career spanning research and business roles, as Research Director at Accenture and research associate to Gary Hamel, to CEO of a steel fabrication company, to Senior Editor at Techstars. Pete is the author of Franchising Dreams: The Lure of Entrepreneurship (University of Chicago Press) and Legal Cannabis: The Great Social Experiment (forthcoming, 2021). As a collaborative writer Pete has worked with a number of leading business and entrepreneurship authors including Matt Blumberg (Startup CEO and Startup CXO), Brad Feld and David Cohen (Do More Faster), Will Herman and Rajat Bhargava (Startup Playbook), Claudia Reuter (Yes, You Can Do This), and others.  Pete received his Master’s and PhD in economic sociology from the University of Chicago, focusing on organizational behavior and quantitative methods. 

Contributors

Cathy Hawley. Cathy is an experienced fractional and full-time Chief People Officer passionate about building highly effective leadership teams and creating inclusive and people-focused workplaces. She has more than 20 years of experience in a variety of industries developing global People and Culture teams. At Return Path she spearheaded the “return to work” program, spun it out to a nonprofit, and is on the Board of Path Forward, a non-profit that helps companies create return-to-work programs for caregivers. Cathy earned a B.S. in business administration from the University of Colorado and a master’s in European HR and Industrial Relations from Keele University.

Dennis Dayman. Dennis has over 25 years of experience in security, privacy, and governance issues. He has worked with startups, scaleups, and global organizations to protect and improve data for consumers and companies. He is actively involved in internet and digital communication regulations, privacy/security policies and anti-spam legislation laws for state and federal governments. Dennis was appointed by the Department of Homeland Security to the Data Privacy and Integrity Advisory Committee (DPIAC) to provide input on policy, operational, technical, and other privacy-related matters. He is a graduate of Stephen F. Austin State University with a degree in criminal justice. 

Jack Sinclair. Jack is an experienced Chief Financial Officer and Chief Operating Officer with over twenty years in startups and scaleups including Return Path, Stack Overflow, and Bolster. Jack began his career at Stern Stewart as an analyst but quickly figured out he enjoyed startups and scaleups and has since co-founded Return Path and Bolster. Jack earned a B.S. in finance from the Wharton School. 

Ken Takahashi. Ken has spent more than two decades in the B2B SaaS space helping companies and industries grow. His career has taken him from product management to pre-sales consulting and industry relations and is now squarely centered on business and corporate development. Ken has significant international business experience, launching offices across Europe, Latin America, and Australia. He serves on industry boards and committees and is a mentor and advisor to technology startups around product-market fit, geographic expansion, and exit strategy and execution. He earned his B.S. in business from the Leonard N. Stern School of Business at New York University.

Anita Absey. Anita began her career on Wall Street in equity research, risk arbitrage, and corporate finance with Credit Suisse and Deutsche Bank, but for the past 20 years has had wide-ranging roles in sales. Anita has been in sales leadership positions in startups and scaleups including Abacus Direct, DoubleClick, Return Path, Voxy, and LRN. Anita views her success through the lens of revenue growth and customer satisfaction and her greatest satisfaction comes from watching people on her teams thrive in their careers. She earned a B.A. in economics at Fordham University.

Holly Enneking. Holly is an experienced marketing leader who believes in the power of storytelling and finding innovative ways to communicate a brand’s value through cross-channel experiences. Holly is currently the Vice President of Marketing & Alliances at Lev and thrives on amplifying the Lev brand and helping fellow marketers understand how a consultancy like Lev can help them maximize their investment in Salesforce. Prior to joining Lev, Holly began her career in video and digital production before being a senior leader at Return Path and overseeing brand, digital, customer, and partner marketing. She earned a B.A. in communication from DePauw University.

Shawn Nussbaum. Shawn is a technical leader and consummate problem solver with over 25 years of experience developing software and leading high-performing teams. Shawn spent the last decade at Return Path where he led Product and Engineering and was responsible for setting the vision and culture of the organization, extracting meaning from email data, and applying technology as a force-multiplier to solve interesting and difficult problems for customers. Prior to Return Path, he helped launch two Internet companies and was an advisor and technical director for a consortium of insurance companies. He believes that empathy and usefulness are the keys to remarkable products.

George Bilbrey.  George is an experienced technology executive with over 20 years of experience running Product Management, Analytics, Service, and Customer Success organizations.  Most recently he was co-founder, President and Chief Customer Officer at Return Path and currently is the CEO at Signpost.  George started his career at Mercer Management Consulting (now Oliver Wyman).  George earned an B.A. from Duke University and an M.B.A from the University of North Carolina.

Nick Badgett. Nick is an experienced marketing leader with more than 15 years of experience working in both startup and enterprise environments across the B2B SaaS, Telecom and financial services industries. His approach to marketing has been shaped by experience in a variety of go-to-market roles including sales, sales support, and marketing. Before joining Bolster, Nick held marketing leadership positions with Emplify, Return Path, Salesforce and ExactTarget. Nick holds a bachelor’s degree in marketing and a master’s degree in information & communication sciences, both from Ball State University. 

Jan 19 2013

How Diverse is Your Startup Board?

On MLK day, the subject of diversity comes alive. And while we address diversity in Startup Boards via the axis of gender, it does not minimize racial challenges. The following post applies to diversity without diluting the premise of competence.

As Startup Board’s book cover design was being finalized, Brad nudged for a change of the cover. He didn’t yell, with dramatic flourish, “Stop the Press” ( which I have always wanted to do ;-) ) but quite simply said –  “we need more women on the cover – more than just one.”

Startup Boards Cover

I didn’t even realize that we had a cover with a “male dominated” board. Call it “business as usual” lazy thinking, call it carelessness “whats the big deal anyway” or any other name – I am embarrassed!  And I am glad Brad asked for this change. Because if he didn’t ask for it, the status quo would prevail. That’s unacceptable and we need your help to change that. Here is why:

1) Business as usual will not get us there:  All male dominated startup boards  = business us usual. These boards have worked for the large part but we dont know what we are missing. And what got us here will not get us there! In Startup Life Brad and Amy write about “Lack of Diversity” in startups and believe that in 20 years, the gender ratio would be equal. Thats realistic. But it should also make us wonder – why so long? Why can’t we do better? Do more faster? And what are we missing by accepting the status quo?

2) Our brains become ossified: At least, mine has. Otherwise I would have stopped to ask the same question Brad did? We reached out to a number of women (Startup CEOs and VCs alike) to find out more on this lack of diversity. Cindy Padnos of Illuminate Ventures told us a fascinating story of how, while serving on a startup board, the question of adding a new board member came up. This was a male board + Cindy being the lone woman. Several candidates were proposed. Cindy recommended the name of a woman, who by far, was the most qualified. The rest of the board members readily accepted the recommendation. Cindy pointed out that “It was more of a top-of-the-mind issue – everyone readily agreed to bring her on, but hadn’t thought about her.” The other board members even knew her. But its kinda like the book cover design – till Brad pointed out, I thought the cover was fine.  We see this in society on a number of different levels – its not necessarily by design, but by subconscious patterns of generational behavior.  Do you think a women can play a trombone?

3) The heartbreaking story of Abbie Conant: Abbie Conant applied for the position of a trombonist at the Munich Philharmonic.  Candidates auditioned behind a screen – a blind audition — and she was judged the best amongst 32 men.  When she stepped out from behind the screen, the judges were shocked – a woman? Then begins her ordeal. They suddenly felt she did not have enough physical strength. Or nerves. Or empathy. She could not play because she did not have enough lung capacity. But Abbie Conant was a true fighter. Thirteen years after she entered the orchestra with a blind audition, the German courts ruled that Ms. Conant be placed in the same pay and seniority group as all of her male solo-wind colleagues. Read her heartbreaking story here. And now ask yourself, what if Abbie was your mother? Your wife or daughter? Would this all-male ossified behavior – women cannot play trombones — make you mad? If we dont watch our patterns, we wont progress.

4) The business case for diversity: There is plenty of data for publicly traded companies that show how women make boards better. “Gender Diversity and Performance” – a report released by Credit Suisse (Aug 2012) shows some interesting data.  In an analysis of 2360 companies using over 14,000 data points,  publicly traded companies with more than three women on the board, had a market cap 3X higher than those with no women. What does that say about value of women? Three times smarter ? Return on Equity is 4% higher when you had at least one women on the board. Debt was lower….no matter which index you used, the business case is evident. Granted its with larger / public companies and but its hard to argue that such benefits cannot be seen with startups. Diversity of thought, experience, intellectual horsepower counts. Yet it starts with our ossified thinking – the data is there but we need to break our own patterns. We need to try harder.

5) The Yin and the Yang:  Wendy Lea, CEO of GetSatisfaction says, “Its a sign of an evolved CEO who balances out the yin and the yang. At the end of the day, we are talking about the feminine energy and masculine energy – how these two can help the startup grow and become successful.” Indeed, the emotional side and the analytical side are equally important. But at times, an all male board can become self congratulatory. Lucy Sanders, Founder of National Center for Women in Technology (NCWIT) has been on several boards and reminds that “its about performance at all times yet women can raise some issues quickly.” Lucy pointed out a board situation where in an all-male board cast, the VP of Sales continued to miss his targets. Yet he doled out great punchlines and smooth talk – the board bought it all along till Lucy raised her hand. (She was the solo woman on that board). That VP of Sales was ultimately fired – that action may have saved the company.

In summary, its upon all of us to make a conscious effort to improve the diversity ratio – we need comptent people to help entrepreneurs. No compromises there – but we need to make a direct, thoughtful effort to attract board members of diverse backgrounds. And we need to prove Brad wrong that it will take 20 years to change the ratio. It took Abbie Conant only 13 years, after all, to fight those hardscrabble German philharmonic dudes.

Jan 14 2019

The Rise of Global Startup Investors

Recently, Brad Feld and I have been working hard on The Startup Community Way, a book on how to harness the complexity in the entrepreneurial age. It’s a follow-up to Brad’s, 2012 classic: Startup Communities. We completed a chapter that documents the growth of startup activity globally over the last decade—from startup deals to investors to startup programs—but recently decided to scrap it from the book. But, we wanted to put those data points to use, so I’ll publish some of them here.

(Note: if you want a comprehensive look at trends of venture deals, see Rise of the Global Startup City: The New Map of Entrepreneurship and Venture Capital, a report I published last September with my friend and colleague Richard Florida. It covers a decade of venture capital deals across more than 300 global metropolitan areas that span 60 countries.)

Here, I’ll document the rise of three types of investor groups: venture capital firms (from Seed through later-stage VC), corporate venture capital groups, and a third group for accelerators and incubators. These groups have been pre-populated by PitchBook, my source in this analysis.

I tabulated the active universe of these three investor groups annually between 2002 and 2018, and broke them down as being headquartered in either the United States or the Rest of the World. Active investors are categorized either as “new” (founded that year) or “existing” (founded prior to that year and made at least one investment in the three years prior).

The first three charts here show the active number of firms by year by investor type, activity status (exiting or new), and the new firm share of total.

For all three groups, we see a remarkable rise in the number of active firms, with the sharpest rises coming from corporate venture capital and the broad accelerator and incubator group. Venture capital firms increased in a straight linear fashion, and they are about 2.5 the number of active firms today as in 2002. Corporate venture firms have seen a rise of a similar magnitude, and accelerators and incubators are now at about a factor of 8 compared with the beginning of the period.

The new firm share of global venture capital firms raised from around 6 or 7 percent in the mid-2000s to 10 or 11 percent in the first part of this decade before collapsing after 2015. Accelerators and incubators increased from around 8 percent to as high as 24 percent before tailing off the last few years, and CVCs meanwhile expanded the most—increasing their new firm share from 3 to 4 percent to as high as 15 percent. The stock of existing firms is so much larger for venture capital that it masks the sizable growth in activity over the period, compared with the others.

The sheer collapse of new firms across all three groups is stunning. I have no doubt that there has been a major pullback in the number of these firms being launched in recent years, however I suspect the numbers will increase some with time—venture founding events frequently come with time lags in venture capital databases. But, it won’t change that much—the substantial and continued rise of new venture capital firms, accelerators and incubators, and CVCs is over, or it is at least on hold.

What’s also interesting to me is the resiliency of firms in the sector once launched. Even in spite of the massive growth of new firms, we see that they still make up a small share overall—and even when the growth of new activity slowed, the overall level of active firms (the “stock”) stays more or less the same. This of course varies across the groups (VC firms are the most resilient, accelerators and incubators are the least), and of course, the overall levels will come down some with time.

Next, let’s look at the distribution of new investor formation by geography—comparing firms headquartered in the U.S. versus those in other countries. The charts below show the number of new firms by firm type, broken down by either geographic group, and the share of new firms that are HQ’d in the US.

The charts tell two stories. First, we see that the Rest of the World launched new venture capital firms and corporate venture groups at a similar and at times faster pace than the United States did for much of the period, that changed dramatically after 2012 (VCs) and 2015 (CVCs) when the U.S. headquartered share spikes. This is interesting because, as documented in Rise of the Global Startup City, most of the growth in venture capital deals came from outside of the U.S. the last half decade.

Second, we see that the opposite occurred for accelerators and incubators, which grew more outside of the U.S. than inside of it since about 2008. Unfortunately for this group, we can’t break it down between accelerators and incubators (these are vastly different things, as I wrote about here and here), but this is an interesting and useful data trend no less.

To close, although not shown here, the rise of new firm activity among venture capital firms and corporate venture arms—though significantly elevated in recent years compared with a decade ago—is nowhere near what it was at the height of the dotcom boom. The new firm share of VC firms was 18 percent in 2000 and 28 percent for CVCs in the same year! Accelerators and incubators are really a thing of the recent past, so the results are different. So, in the context of that broader history, we’re at much more subdued levels of new firm entrants.

Sep 20 2018

Hey Non-Entrepreneur Startup Community Leader – Where Are You?

Everyone has some level of motivation, what is yours?

I have argued that there is room for everyone at the proverbial startup community leader table.  Though we believe that you need 8-10 entrepreneur leaders on the team, most communities have a cadre of non-entrepreneurs stirring the pot.  The issue is that non-entrepreneur leaders sometimes fade away after some initial participation.

To that end, what are you going to do once your initial involvement fades away?

Most non-entrepreneur community leaders are motivated first by their job.  Examples include a:

  • city staff who are driven by the notion of job growth in their city,
  • angel investors who yearn for better deal flow,
  • corporate executive who realize that a thriving startup community helps their company,
  • real estate leader who sets up a coworking space,
  • lawyer who holds group meetings and gives away free advice to first time founders,
  • economic development executives who now have an entrepreneur charter,
  • elected officials (at any level) who see a growing role for more entrepreneurship.

Let me be the first to thank you for joining us entrepreneurs to create a better future for our community.  We need you in order to create a more inclusive discussion.  And we need the resources you bring to grow smarter, better and faster.

I recognize that your initial motivation is your job, I also recognize that you bring a level of passion to this community-building effort and even give much of yourself during non-working hours.  Again, thank you for your #givefirst attitude.

But now that you have a new job, or got really busy, or achieved your near-term job goals, what are you going to do now?

My partner Brad Feld reminds us that community-building is a 20-year effort that restarts every day.  He also reminds us that community leaders need to be involved for 10+ of those years.

When you as an important leader in the startup community make your mark at any given stage of the journey and then fade away, we miss your leadership.  You leave a void.  And the community just slips back a little (or a lot).

My ask, don’t fade like a light switch; fade a little over time (like years).  Show up at a few meetings, personally and publicly support others in their projects (which help foster the next generation of leaders), and maybe even join just one more project (instead of the 3 you were involved in previously.)

May 6 2013

Noam Wasserman Reviews Startup Life.

Guest Post By Noam WassermanNoamwasserman.com – (Professor & Author )

Brad-and-Amy

Halfway through Startup Life, married couple Brad Feld and Amy Batchelor suggest that, “Being in a relationship with an entrepreneur is hard, possibly harder than being an entrepreneur” (p. 78). This hard-learned gem of wisdom is richly conveyed throughout their excellent read.

Through their own real-life examples, and those of others, Brad and Amy drive home the message that a founder’s spouse or life partner is the true cofounder, the one without whose support and contributions the startup could be dead or might have never been born to begin with. Startup Life is an invaluable resource not only for showing life partners their likely path ahead, but also for opening the eyes of the founders themselves to the stresses their partners are likely to experience.

I appreciate how the book tackles the full range of the entrepreneurial journey, beginning with the initial decision to leap (e.g., when motivated by “not wanting to risk a life in a cubicle”), and culminating with a successful exit. However, their clear-eyed presentation of these events highlights the unexpected challenges that can accompany even the biggest success. For instance, the authors poignantly describe the aftermath of Brad’s successful exit from one of his startups as “the entrepreneur’s equivalent of post-partum depression.” Far from the jubilation we would expect to see, Amy and Brad’s raw reflection offers a sobering, honest view of the dark underbelly of what many expect to be the glorious Promised Land. Along the way, Brad and Amy impart a wide variety of practical lessons and suggestions, such as keeping a weekly digital “Shabbat” in which they are offline each Saturday.

To ensure they have cast a wide net of experience, Brad and Amy pepper the book with anecdotes and insights from others in the entrepreneurial ecosystem. Almost all of the outside write-ups have at least one important insight, but a couple of them are particularly golden. For instance, Keith Smith, founder-CEO of BigDoor in Seattle, provides very personal reflections on how habits he developed within the startup harm his personal life. Reflecting on that broader pattern, he says: “…the fact [is] that many of the skills that entrepreneurs develop to help us survive and ultimately succeed in a startup are in direct opposition to the skills we need to build a long, happy, and stable relationship. Embrace risk. Fail fast. Move even faster. Solve problems quickly, and without waiting for every fact to reveal itself. Multitask well. Shape the world around you to match your vision. … [As a result] I’ve got screwed-up priorities, a well-developed set of exactly the wrong skills, and I come off as being emotionally unavailable.”

Another golden write-up delves into the experiences of two spouses cofounding together – “couplepreneurs,” if you will. (My data has shown that founding teams comprised of friends and/or family tend to be less stable than other teams, emphasizing how founding with those types of people is “playing with fire.” Such teams should devote a lot of attention to developing “firewalls” to protect themselves.) Krista Marks and Brent Milne describe their own firewalls, such as always using each other’s given names at work and nicknames at home, and going out of their way to prove to the rest of their teams that they do not discuss sensitive work issues at home.

More generally, succeeding at founding a startup while founding a family requires cultivating an awareness that startup rhythms are rarely in sync with the rhythms of personal life, and that there are often strong disconnects between the entrepreneur’s psyche and the spouse’s. Two of those disconnects are highlighted in the book by spouse Alexandra Antonioli: divergent perspectives on money (“A person who has always worked a salaried position from 9 to 5 arguably does not view money in the same way as the entrepreneur”) and time (“entrepreneurs like to overbook. … They will be late.”). She calls the latter “the Entrepreneurial Time Zone.”

In addition to highlighting the potential disconnects between the personal and the professional, Brad and Amy also highlight ways in which startup best practices should be imported into a founder’s personal life. For instance, the entrepreneur’s intense focus on the startup’s cash position: “Make sure as a couple you know where you stand, how much money you actually have, what your monthly burn rate is, and how long you can go before you are out of money.” Another bit of overlap with founding teams: “a couple that ‘never fights,’ it’s almost always a sign of avoiding talking about troubled topics and not the result of complete accordance and unity with each other.”

Along the entrepreneurial journey, we get to know a variety of fun tidbits about Brad and Amy. For instance, Brad’s ringtones include – perhaps a bit too tellingly! – “Money” for his VC partners and “Comfortably Numb” for CEOs. Brad’s “14-year-old inner self” has a strong aversion to babies. Even though Brad stresses the importance of having regular Life Dinners with Amy, they’ve had to develop “our fail 12.5 percent of the time rule”: that Amy allows Brad to miss it unexpectedly one out of eight times. And even though Brad had significant assets to protect when they got married, they don’t have a formal prenup. Instead, if the relationship fails, Brad says that Amy gets everything and Brad will start over from scratch.

We’re left with a richer picture of the authors, but also a richer picture of the ways in which the founding journey will challenge the most cherished of our relationships, insights that will hopefully enable us to preserve the professional without imperiling the personal.

This is a re-post from Noam’s blog at noamwasserman.com


Noam Wasserman

Noam Wasserman is a professor at Harvard Business School. For more than a decade, his research has focused on founders’ early decisions that can make or break the startup and its team. At HBS, he developed and teaches an MBA elective, “Founders’ Dilemmas,” for which he was awarded the HBS Faculty Teaching Award and the Academy of Management’s 2010 Innovation in Pedagogy Award. In 2011, the course was also named one of the top entrepreneurship courses in the country by Inc. magazine.

Mar 27 2013

Part II of Enjoying the Ride: Staying Mentally Fresh

Guest Post By Marc Barros – One Entrepreneur’s Perspective – (Blogger) 

Staying Mentally Fresh is the second post in a five part series called “Enjoying the Ride.” Comparing a start-up to surfing, this is a simple guide to turn your grueling start-up battle into a more soul fulfilling experience by helping you battle the sets and pick the right waves so you can enjoy the ride.

todos-santos-surf-photography

“There’s the most extreme consequences in big wave surfing. The idea that you could go out there and possibly drown and die…It’s tragic when it happens, but it’s also sign you were living and taking those chances in life. That’s the greatest feeling in the world.” ~ Greg Long (Big Wave Surfer)

Being an entrepreneur is a choice. Going to work everyday is a conscious decision.  No different than choosing to surf the world’s largest waves you are choosing to navigate a group of people through extreme conditions with the hope of making the world a better place.

So if I’m choosing to do this, why am I so mentally exhausted, stressed out all the time, and deeply afraid that I’ll let everyone down?

Because learning to manage your own psychology is the hardest part of running a company. Constantly overcoming the fear of failure is incredibly hard, especially with mounting expectations from your employees, investors, and customers. The more you succeed, the harder your job becomes. Rand Fishkin touched on this recently in a blog post about the expectation to give 100% of yourself and why it is so hard to run a growing business.

No one wants to fail and if you aren’t mentally prepared for the battle ahead it can crush you into the ground like a gigantic wave.

In running Contour, the only way I survived was by brute force. I didn’t give up. But it doesn’t mean I didn’t almost drive myself or the company off the cliff on several occasions. Not having preconceived notions became my saving grace and finding an outlet other than Contour was the only thing that kept me sane.

Being on the sideline for the first time in a decade is allowing me the opportunity to think about the mental transitions I was going through. They were gigantic, especially for a twenty-something-year-old trying to figure out life while pretending he had everything figured out as a leader. It is true that you will experience things you can’t predict, but I have come to believe that you can prepare yourself mentally to handle the ups and downs so you can actually enjoy the ride.

The following is a guide of how you can be better prepared on a daily basis.

Admit You Have No Idea

“There are a lot of variables of the ocean you can’t control.” – Greg Long

The very nature of a start-up is that it’s built on a series of assumptions and predictions about the future. Assumptions that can be so interconnected that if one thing changes, it has the potential to disrupt everything you have built. This can turn team momentum into disappointment, looking as if you would lie to them about the predictions of the future.

The minute you admit “you have no idea what is going to happen,” is the moment a huge weight gets lifted off of your shoulders. Instead of feeling you have to have all the answers you can galvanize a whole organization into helping you think about solving the problems the company faces. Instead of becoming plans of stone, they become plans that adjust to the actual conditions at hand. And instead of everyone feeling like you let them down, they can pivot to think about how to solve the new problems.

No doubt “change” in a start-up adds an incredible amount of stress on the organization and the individuals involved. But no different than surfing, the only thing you can count on is that the ocean constantly changes. Admitting you have no idea which way it will change, not only lifts the collective stress off the organizations, but shifts everyone’s mentality to helping understand the changing tides.

Turn Off the Distractions
You know that anxious feeling you get when you can’t stop touching your phone in anticipation of the next tweet, email, text, Skype, Facebook, or phone call? The small rush of excitement you get in anticipation of figuring out who reached out and why?

It’s called not being present.

Quote - Marc Barros -2And when you aren’t, you miss the ride, your work suffers, and people don’t want to be around you. Your significant other probably calls you out the most, but being present is one of your most important jobs. Yes, communicating is an important part of your job and there are times when checking email, twitter, etc are part of your day. BUT, you already have an incredible amount of inputs coming in on a minute-by-minute basis so turning off your twitter feed, closing your email, and putting your phone on silent will enable you to be present. If you have issues you can’t stop thinking about then write them down and leave them there until you have time to come back and deal with them.

Especially two hours before going to bed, turning off all the electronic distractions in your day will help you sleep so you can be fresh to tackle the day ahead.

Find Someone to Talk to
Figuring out who you can and can’t talk to is a painful process to go through. Even more painful is to learn that if you talk too much people start losing confidence in your ability to lead.  Especially if you don’t have any other outlet than the people involved with your business.

It was 2008. My mom had just passed away from 15 years of fighting breast cancer, I recently broke up with my girlfriend of three years, and the economy was tanking. I was a train wreck ready to hit the wall at a hundred miles per hour. I had no idea I even needed help and instead I bottled everything up and pushed the train even faster. Putting in more hours and taking on more responsibility than ever. And then I got lucky. Into my life walked someone who taught me how to open up. She became someone I could talk to about everything I was going through. Someone who didn’t judge me or try to answer my questions. She just listened.

Every entrepreneur needs someone they can talk to. It doesn’t have to be a significant other or even a friend. It can be a professional, but most importantly find someone you trust, who listens well, and understands how to deal with complex relationships. Brad Feld talks openly about professional help for entrepreneurs in his recent book, “Startup Life – Surviving and Thriving in a Relationship with an Entrepreneur.” Brad has worked with a lot of start-ups and is a strong believer that entrepreneurs need someone to talk to, especially a professional who is focused 100% on helping them talk through the challenges they face both with the company and their personal life.

Bottling everything up only compounds the pressure you are under.

There Is Life Outside of Work
Running a company is incredibly lonely, but it doesn’t mean the rest of your life has to be. My family would find it ironic I’m not admitting this, but there are people who care about your well being outside of work. People who aren’t looking for you to constantly be on or lead them. People who just like being around you and care a lot about you.

Spend time with your friends, family, and significant others. You let them in your life at one point because you enjoy them, so go enjoy them.

When we start a company one of the things we believe is it will give us an incredible amount of flexibility to work where we want, when we want. Instead we replace that dream with working everywhere, all the time. Part of unlocking your own creative energy is enjoying life’s pleasures. It is okay to go ride on a powder day. It is okay to go surfing in the afternoon. It is okay to take Friday off to hang out with your family. Taking time off to make life less predictable is one of the best ways I have found to stay fresh.

I wish I hadn’t spent my twenties behind a laptop.

P.S. There is a great interview of Greg Long, infamous Big Wave Surfer, talking about fear and how he overcomes it to surf the largest waves in the world. It is 20 minutes, but it’s not only inspiring, but very related to the challenges of building a company. (http://vimeo.com/channels/surfprevention/51117940)

Image Credit: Nathan Gibbs  via Creative Commons

marcBarros

My Purpose
I am an entrepreneur. A creator. A builder. I want to build companies that make the world a better place, one product at a time. I have come to believe that if you let life unfold itself, you will experience it like never before.

Contour
My first start-up and therefore my first love. I co-founded Contour in a garage almost ten years ago and was fortunate enough to have lead the company from inception to a multi-million dollar business with hundreds of thousands of customers around the world. I am most proud of the award winning products we create, which are thoughtfully designed and incredibly easy to use. Contour.com

Contact Me
[email protected]
@marcbarros

Mar 12 2013

Enjoying The Ride

Guest Post By Marc BarrosOne Entrepreneur’s Perspective – (Blogger) 

mavericks

Running a start-up is incredibly exhilarating. Especially when things are going well, the momentum the entire organization feels is amazing. And as an entrepreneur you’re taught to believe that your success is all about how fast you go. The more you get done, the better you feel. The more you accomplish in a quarter, the better your board meeting goes. The faster your numbers grow, the more valuable your company is.

It’s true, speed is important.

But that doesn’t mean you have to miss the entire experience because you are overworked, under-slept, and under-appreciative.

Even as you read this article you’re probably cramming it in between meetings, or while eating lunch, or into some other small window of time.

I used to do this when I was running Contour. I thought the faster I went, the better. The more I checked off the list, the better I was doing. The more hours I put in, the higher the probability the company would succeed. Nine years later, I realize there is a lot that I missed. A lot went by that I can hardly remember now, because if I had tried to fit one more thing into my head it would have exploded.

I’ve recently learned to surf, and found so many lessons in surfing that also apply to running a company. You spend most of your time paddling against the break (learning to navigate the currents of the business world and pushing through at all odds), some of your time waiting for the right wave (thinking about the business), and less than 8% of your time surfing (enjoying the ride).  This ratio is even worse when you are learning because you spend most of your physical energy paddling against a current you haven’t studied well, you are hardly patient enough to wait for the right wave, and your riding sessions last a matter of seconds before you get tossed back into the water. To make matters worse, you spend most of your mental energy trying not to give up.  The actual wave riding (the whole premise for surfing) becomes secondary to just surviving the onslaught of the waves in front of you.

Contrast this to the experience of seasoned surfers who understand that navigating the break is part of the process to get you to those few seconds of bliss. They have trained their bodies to handle the pounding waves, they have spent hours studying which waves to take, and when they ride one they can feel it deep in their soul, even if it only lasts a few seconds.

Running a company can be a soul-fulfilling journey, especially if you learn how to navigate the sets, pick the right waves, and enjoy the ride. While I was at Contour I kept telling myself the onslaught of waves would subside, at which point I would have time to think about the business and enjoy the ride. But the waves never stopped, they only got bigger. And my time to think and ride diminished.

From what I’ve learned I put together a five-part series called “Enjoying the Ride,” a simple guide to a more soul fulfilling experience.

Part 1 – Be Physically Preparred
Before you can even enter the water you have to be physically in shape. Sure, you’ll get stronger as you battle the waves, but if you don’t take care of your body you’ll never get to ride the wave.

Part 2- Staying Mentally Fresh
Getting past your fears is only part of what you need to stay mentally sane. Learning how to keep yourself mentally fresh and emotionally stable is critical for long term success.

Post 3 – Do Less
If you break down your day you will find there are only a few hours you can apply your most creative energy to doing great work. No different than surfing, you can’t ride waves for 16 hours a day, seven days a week.

Post 4 – Appreciate the Relationships
If you strip away the business the only thing you really have are the relationships around you. Learning to appreciate and enjoy the people makes the ride so much sweeter.

Post 5 – Celebrate the Small Things
It’s easy to recognize the big wins, but how can you understand, appreciate, and enjoy the small things? Being a great surfer or an entrepreneur can take a lifetime, so if you wait until you win you will miss all the progress you are making.

*Note: If you are looking for some inspiration there is a movie called Chasing Mavericks, which is based on the life of surfer Jay Moriarity. It chronicles his quest as a teenager to surf Mavericks in Northern California, and Frosty Hesson, the local legend who takes him under his wing in order to train him to survive it. My surfing buddies tell me the film was criticized by core surfers as a dramatic hollywood rendition of surfing, but nonetheless I found the film inspiring.

Image Credit: By 2010_mavericks_competition.jpg: Shalom Jacobovitz derivative work: Brocken Inaglory via Wikimedia Commons

Dec 26 2012

World Startup Report – Join The Journey!

 Guest Post By: Bowei GaiWorld Startup Report– (Founder)

The world is flattening before our very eyes.

Now more so than ever, we’re seeing innovation come from every corner of the globe. The number of startup incubators, funds and activities are all growing at a pace faster than anyone can keep up with. Naturally, this begs the question,

“What’s going on in the global startup community?”


The answer to this question is our mission.

World Startup Report is a social mission intended to document and connect the global startup community. Championed by world-class startup organizations and individuals, World Startup Report aims to cover every startup ecosystem’s culture, market, players, challenges and innovations. Furthermore, World Startup Report plans to create a network of resident volunteer ambassadors who will help others – locally and globally, further understand and integrate with local startup ecosystems.

Over the next 9 months, World Startup Report will be traveling to 29 countries and 36 cities in 6 continents. Here’s our plan and itinerary:


“This is a great opportunity for the world startup community to learn about each other beyond just numbers and names. What makes each community unique and how can we help one another? If we can bring accessible and actionable information to the relevant entrepreneurs, investors and policy makers, it could one day become the foundation for a better global startup community tomorrow,” says Bowei Gai, Founder & Chief Ambassador of the World Startup Report.

If our journey sounds interesting to you and you want to learn more, subscribe to our startup reports here. For real time updates on our location and activities, follow us on Twitter.

Major thanks goes out to 500Startups, StartupWeekend, StartupDigest, LinkedIn, Boingo, XComGlobal, AngelHack, FlightFox, Brad Feld, Dave McClure and hundreds more that are volunteering their time, energy and enthusiasm to make World Startup Report a reality. The trip wouldn’t be possible without all of your help!

Join our 9-Months, 29-Countries and 36-Cities Journey to Meet the Global Startup Community.  The Journey Begins on 1/1/2013.

Join us.

Let’s go change the world!

– The World Startup Report Team
([email protected])

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