Things I've learned running two startups in the past 12 months

1. If you have an idea that costs time or money, don't do it yet. Think simpler. There is always a simpler solution.
2. Stealth mode is bullshit. Socialize your ideas.
3. Smaller teams move faster.
4. Don't build yet- there is always a way to succeed without an expensive technical build. 
5. The best people cost money. Not always the most money- but never the least.
6. A business is made or sunk by a few key employees. No matter the job- you'll be relying on 20% of your people for 80% of your output. 
7. Take every meeting. The biggest customers for each startup have both come from odd meetings I had little desire to attend.
8. You never know who you'll run into at a cocktail party. And at worst, there are usually cheese platters.
9. Act, don't talk about acting. You'll learn more- and accomplish more- from 5 minutes in the field than 5 hours at the chalk board.
10. The most difficult thing is managing vision with action. One is nothing without the other, but vision relies more on action. So feel comfortable mending vision to action, but keep action directed towards vision.
11. Not everyone's a customer. Not everyone is as excited as you are. Some people suck. Go prove 'em wrong. 

Pivots

Ann Miura-Ko, named by Business Insider as "The Most Powerful Woman in Startups" once said that a pivot isn't a slight change in business model. Its an alteration so big and drastic, so against the months (or in this case) years of work that you've put into a company that it hurts your gut. You've gotta hate to pivot.

Well, here we are. Forced into this by a number of constraints, not the least of which is financial. But time, effort, and other commitments all play a factor as well. We're making another pivot.

Right now, we've spent the last many many months (and Jesus, many many thousands of dollars) working towards becoming the foundational layer of transportation of goods within a community. That was- and remains- an awesome and exciting idea that a passionate, devoted, and well funded team can do a lot of cool stuff with.

Due to a number of changed circumstances is my life, we are none of those things. Well, maybe still passionate. But not the other two. Certainly not the third. Whatever the opposite of the third is- we are that.

So design loves constraints, and these constraints are leading us to a new designs. Instead of going towards our old goal- one that requires a lot of technology, management, sales, resources, planning, money, and onwards...we're transforming into what we know works- a 'temp agency' for delivery drivers. When a restaurant that already has their own drivers is short staffed, we'll help them out and give them someone for the evening.

This will also free up a ton of time to pursue what I think is a really awesome idea- the Driver Benefits Program. We're going to make deals with small businesses in the area and sign them up to provide discounts specifically for delivery drivers. Drivers work out of their cars often, and need repairs, oil changes, and washes often. Businesses that partner with us will get targeted marketing directly towards the customers that would use them the most.

And so, we're pivoting. We'll see where it goes, and where we can take this. I'll keep you updated!

-A

Customers!

Ah, ups and downs and ups (I hope?)

A few days before Valentine's Day, I got an email from someone (we'll name him Willy) who had heard of Morph, but wasn't too sure what we actually did.

"I want to order a few desserts from Sugarland on Franklin to be delivered to Southern Village on Sunday / Valentines Day. Doesn't look like there is anyone they use for delivery. Do you know if there are any delivery free-lance services that will bring anything anywhere?"

Well...yeah. I guess I knew one. Morph! I promised Willy that I would deliver his wife cupcakes no matter what- with or without Sugarland's blessing, Willy's wife would have cupcakes on Valentine's Day. 

An hour after hanging up, I had biked over to Sugarland, pitch prepared. I sought out Katrina Ryan, founder and owner of the bakery, but instead found her loyal steward and husband- Doc. I told him what Morph does, and that I have at least 5 contacts who want to place an order for cupcakes. Sure, it was really only one guy code-named Willy, but the truth doesn't always sound so glamorous in sales.

Doc Ryan enthusiastically agreed to work with Morph. I thought it was the easiest sale I'd ever made. He had the same problems other small business owners do. He is often the one stuck making deliveries because he does not want to hire a driver for the store. Because his time is valuable, he charges $25 per delivery- a price that very few are comfortable paying. So the orders come infrequently, and are a hassle every time.

Doc and I agreed on $5 per delivery as a Valentine's Day special. It wasn't much, especially as tips rarely happen with cupcake delivery, but as I would be the one delivering orders, I didn't mind. The time of an employee is precious- at least $15 an hour. The time of a startup CEO is free. There's no hourly rate I expect, so I'd happily work for peanuts. That's more than I usually get, anyway!

Ecstatic, I leave the store ready to promote. I spend a few hours designing promotional fliers and posting them all across campus. Danny and I walked to every fraternity and sorority on campus, promoting $5 Valentine's Day Sugarland delivery. I Tweeted, Instagramed, Facebooked. I did everything I could to promote their delivery. I was stoked.

Saturday morning, the day before Valentines Day, I decided to order some cupcakes myself, to up that order total and treat my friends. I call, and the girl answering the phone says "of course we deliver!" I smiled. 

"Delivery will be $25. Is that okay?" I frowned. 

A bit of questioning revealed that my friend Doc didn't do a great job spreading the word to his employees. 

That was immensely frustrating. I had worked so hard to promote the deal, and they didn't even tell their own employees about it. I had no idea how many people might have called excited to get cupcakes, and hung up immediately once they heard a price 5X what they were expecting. I had to get it sorted out.

I went straight to Sugarland to talk to Doc. I told him that I would really appreciate if the girls operating the phones knew about the deal, so that our promotion can work well. I was patient, listened a lot, and made my points with minimal pressure and a ready smile. Finally- finally!- I think we were on the same page. $5 delivery. Everyone would be told. They promised.

Sunday went well. I had hoped for 10 deliveries, and we received 8 in total (including one that I placed, but we can't be picky). That's not bad, considering the handicap of no one actually knowing about our deal. The most important part of the day for me was the support that friends gave me. Half the orders were from friends who wanted to support me. Orders were placed as gifts from as far as New York, and it meant a lot.

The next day, I went back to Sugarland to discuss how the previous day went. They were very happy. We saved them a lot of time, provided them with extra orders, and did a good job. A few decisions remain to be finalized, as Katrina (the big boss) needs to sign off on our agreement. I am pretty optimistic that we'll be able to get something done, and bring our customer grand total to- can you believe it- three!

Chugging along

I've Morphed for 40 hours in the past week. That's a full time job just out of delivery driving. Add in the 50 hours of work it took during the day to keep things afloat and moving forward, and that's the work week of an over-achieving investment banker. Maybe even a bit more.

It's been a lot of driving, and all the hours have been a distraction from getting work done that needs to be done. However, it comes with some benefits. I've been getting paid, so I've covered almost two months of rent in the past week's work. I've been listening to some stellar audiobooks (really recommend Chris McDougall's Born to Run. It's epic.) I've made a chart of best parking spaces for every restaurant which I can pretty up and publish for our drivers.

But it's also taught me something: it's time to start hiring. I've driven a few hundred hours this semester, but that should not be my main job. The 5 hour shift can and should be spent on business development, not sustainment. I haven't signed or even pitched a new business in over a month. I haven't made a plan to do so either. Our tech has been stagnant and our business potential is capped at what it was a month ago. I can't blame it all on the amount of driving I've done, but I can attribute a large portion of my complacency there.

We've done our final deliveries for 2015 (unless McAlister's Deli hits us with a few more, which would be great.) 2016 is going to be about growth. It's time to put money into recruitment, and effort into sales. It's time to grow the the point I know we can get to- and time to grow fast.

I am no longer going to be driving unless it's an emergency. I am going to need to get creative about hiring, smart about training, and stay cash-efficient, but not penny-pinch.

Effort, time, cash. I've got those three to spare, and in that order.

Could have been leaner

The concept of 'lean' is learned better through experience than through books. While Eric Ries did a commendable job of putting the concept into 300 pages, there is no teacher better than the real world.

I've sunk a lot of money into Morph. We'll keep it general, but many thousands of dollars have been my own, and no meager amount has come from my faithful family. I've invested financially, committed professionally, and pained emotionally over this company. It's been so fun and worth it all, especially as I learned one major lesson: I could have been leaner.

Our technology works, but is currently sitting and gathering dust. We don't need it, and don't use it. The first 4 months of operation has been more of a business play than anything technological. That right there would have been over $8,000 and a few points of equity saved.

Knowing that I could have been smarter gives me perspective about future actions. This is a lesson in the value of bootstrapping. Having limited resources makes you understand your business model in a way that massive free cash flow cannot. Investment dollars may put a thick green bandage on problems, but never address them fundamentally. Moving forward, I can use this past experience to be leaner, smarter, and faster than before. All of this will serve to put us in an exquisite position once we begin to look for investment.

Every conversation counts

A year ago, when Morph was Morphood and we were still aiming for an A in Chris Mumford's class, I would walk up and down Franklin street, popping into restaurants to interview managers about their delivery. I talked about that a bit in this post.

One restaurant manager I spoke to was Charlie, day manager at McAlister's Deli. The first time I met him, we talked a lot about their current delivery situation, and what it would take to make it better. A few weeks later, I popped in to see Charlie with some more questions. Then some weeks after that, I showed him our wire frames. We'd chat at least once a month for the past year, as I provided him updates on our build-out and he provided insights into managing a restaurant and dealing with delivery.

In one conversation with Charlie, I learned that McAlister's does a lot of catering orders. Customers place their order online or on the phone, and McAlister's delivers it. Seeing as these are pre-scheduled orders, McAlister's can't send them off to a third party delivery service like Takeout Central. They have one of their managers leave the store to deliver it. So the store is left without a manager for 30-60 minutes as he brings the food to his car, delivers, drives back, parks, and returns to the store.

"How much would it be worth if we were to do that for you?" I asked.

"That would be huge," he replied. "I'd give up most of our delivery fee, if it were up to me."

And so, we began that conversation. First with Charlie. Next with JD, the regional manager. Then with the McAlister's corporate office.

And finally, we've got ourselves our second customer, in a way that my white board plans would never have anticipated. The McAlister's manager emails me dates and times for their catering order. I send a driver over (usually Danny or myself) to pick up the food, and deliver it. And the McAlister's manager can stay in the store to manage it, like he's supposed to.

And so far it's been great. It is all within Chapel Hill, so drives are no more than 10 minutes. Since catering orders are often in the hundreds of dollars, the tips have been fantastic. And, most importantly, McAlister's seems to be happy.

So two lessons learned here. One- it's a startups job to solve customer problems, not to stick to a business model. We're accepting orders (and making money) in a different way than our business model demanded of us previously, but it remains as unquestionable growth for Morph. Two- every conversation counts. If I hadn't walked into McAlister's to meet Charlie a year ago to ask his opinion on Morphood, I could never have had the opportunity to work with them today.

Pitch Party Part Deux

A year ago, the Morph team competed with fervor in the Carolina Challenge Pitch Party, a competition uniting startups, usually in the idea and pre-revenue stages, with the chance to earn up to $1,000 in prize money. A year ago, the Morph team came in confidently. A year ago, the Morph team didn't make it into the top 10- we weren't even close.

But this year, we're so much further ahead, and so much more confident than we were even last year. While last year we had an idea (not even a good idea, as it seems), this year we've got proof. We have thousands of dollars in revenue, hundreds of completed deliveries, and some fairly complex technology. I am confident beyond a doubt that we are the furthest along company competing this year. I'm even confident that we're further along than almost all of the companies that finished in the top 10 last year.

It seems, however, that my confidence and the Pitch Party don't mix well. Just like last year, I came in sure of a top 10 finish. Just like last year, I spent time writing and memorizing my 2-minute pitch for the finals, because I assumed, and perhaps with good reason, that I would be on that stage at the end of the night. And just like last year, we fell short.

I could think of excuses. There were only 2 of us (myself and Danny), so our exposure to judges was smaller. We were in the middle, so fewer judges came around than for the teams on the sides. Too many judges knew me and were either uncomfortable giving me votes, or just wanted to hang out and chat.

But none of those really matter. They don't even almost matter. We couldn't move on to the money round because 10 other teams were, in one way or another, better than us.

That hurts quite a bit. It feels bad to be told that you're bad. It feels worse because I've spent well over a year of thought and painful effort, and many thousands of dollars on Morph, while other teams were old if they'd started the idea in September and advanced if they had a PowerPoint slide showing what their app to order beers faster at sports bars might look like.

But, lessons continue to be learned. Don't get overly confident. Don't expect things before you've earned them. Don't underestimate competition. There is always more to do and more to learn, and this Pitch Party, which puts me at a world record 0-2 for the same idea, is proof of that.