Investor Connect Podcast

Clustering Illusion

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Clustering illusion is a cognitive bias defined by Wikipedia as the tendency to overestimate the importance of small runs, streaks, or clusters in large samples of random data (that is, seeing phantom patterns).

Investors will see a few deals in a space exit and consider it a hot spot for success when in the big picture the sector is no better than any other.

Sectors rotate in and out of favor based on investors' interest in funding that sector.

When a few startups in a sector raise funding, investors often consider the sector a good area to invest in.

After only a handful of deals receive investing interest other investors will flock to the sector to find more deals to invest in.

In analyzing the field of startups, it’s often the case that that sector is no better than any other sector for investment.  

They’re looking for patterns where none exist.

To overcome the clustering illusion, use data analysis to statistically analyze the data.

This will tell you if there’s a real pattern or only the appearance of one.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Direct download: Clustering_illusion.mp3
Category:general -- posted at: 5:00am CDT

Bias Blind Spot

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The bias blind spot is a cognitive bias defined by Wikipedia as the tendency to see oneself as less biased than other people or to be able to identify more cognitive biases in others than in oneself.

All investors have blind spots and biases.

Investing in experiences causes one to be biased unconsciously.

To overcome biases, focus on self-awareness.

Learn more about the common types of bias such as anchoring and confirmation bias.

Watch how you react and respond to different pitches.

Question your judgment to see if it’s based on fact.

Identify what type of deals and founder types make you uncomfortable.

Question your judgment process to see where it may be flawed.

Are you biased against certain types of people because of past experiences?

If certain types of startups and founders make you uncomfortable then spend more time with them.

Becoming familiar with them will make you more aware of potential biases you may have.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
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Direct download: Bias_blind_spot.mp3
Category:general -- posted at: 5:00am CDT

On this episode of Investor Connect, Hall welcomes Derren Burrell, Founder & Managing Partner at Veteran Ventures Capital.

Located in Knoxville, TN, USA, Veteran Ventures Capital (VVC) is a veteran-owned growth-equity investment fund & firm focused on veteran businesses. VVC interacts exclusively with companies that have military veteran leadership, recognizing the value of military experience, training, and character in business operations.

VVC’s team is comprised of distinguished former military officers and seasoned financial experts from across the country. Their value proposition lies in their granular understanding of the military culture, significant connections within the federal government & defense industry, and working knowledge of the government procurement process.

Derren is a retired Lieutenant Colonel with over 28 years as a professional financial manager in both the public and private sectors. He is the Founder & President of Veteran Ventures Capital, an investment and consulting firm focused on scaling veteran-owned businesses. In this capacity, he oversees all aspects of the company operations and fund management of the Veteran Fund, which invests in early stage/growth companies.

He is a graduate of the Citadel and past recipient of several awards including the Defense Meritorious Service Medal, Air Force Commendation Medals, Joint Service Achievement Medal, Air Force Budget Officer of the Year twice, Air Force Financial Management Officer of the Year, Comptroller of the Year, and USAFE James E. Short Award for Outstanding Contribution to Mentorship and Career Development.

Derren shares his experiences working both in the public and private sectors and his passion for helping veteran-owned businesses.

Visit Veteran Ventures Capital at www.veteranventures.us/, www.linkedin.com/company/veteran-ventures-capital-llc/, and on twitter.com/VenturesVeteran

Reach out to Derren at derren@veteranventures.us, www.linkedin.com/in/derrenburrell/, and on twitter.com/dp_burrell

_______________________________________________________

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Direct download: Derren_Burrell_of_Veteran_Ventures.mp3
Category:general -- posted at: 5:00am CDT

Confirmation Bias

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Confirmation bias is a cognitive bias defined by Wikipedia as the tendency to search for, interpret, focus on and remember information in a way that confirms one's preconceptions.

Investors bring their recent investment experiences to fund new startups.

If the investor recently lost their investment in a deal in a certain sector, then the investor will most likely look unfavorably at other deals in that sector.

On the other hand, if the investor found success in investing in a particular type of company, then most likely the investor will look for similar companies.

It’s important to understand these forces when setting up an investment thesis and criteria for funding startups.  

To overcome confirmation bias consider the following:

Try to view the deal from other angles than you traditionally use.

Ask other investors for their views on it and note the ones with strong objections.

Discuss your thought process with other investors to see where you might be off the mark.

Expand your connections to include people with other experiences and viewpoints.

Give prominence in your thinking to views divergent from your own. 

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Direct download: Confirmation_bias.mp3
Category:general -- posted at: 5:00am CDT

Availability Heuristic

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The availability heuristic is a cognitive bias defined by Wikipedia as a mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision. 

The availability heuristic operates on the notion that if something can be recalled, it must be important, or at least more important than alternative solutions which are not as readily recalled. 

Subsequently, under the availability heuristic, people tend to heavily weigh their judgments toward more recent information, making new opinions biased toward the latest news.

In the startup world, investors bring their recent memories about a startup into the diligence process for investing.

That which they recall is given more weight than that which must be researched.

This puts the investor at a disadvantage in working with incomplete information.

Investors should take good notes on the startup during pitch sessions and use those notes in the diligence phase. 

This will reduce the prominence of easily remembered items and bring important ones to the surface.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Direct download: Availability_heuristic.mp3
Category:general -- posted at: 5:00am CDT

Availability Cascade

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The availability cascade is a cognitive bias defined by Wikipedia as a self-reinforcing cycle that explains the development of certain kinds of collective beliefs. 

Investors who repeat a belief among themselves will reinforce that belief even if it’s not true.

One investor will state his recollection as a fact to a group of investors.

Another investor repeats the statement as a fact.

As this continues around the group the initial recollected memory becomes a fact that every investor believes.

To overcome the availability cascade presume nothing is true until proven. 

For example, if the startup doesn’t state revenue numbers, then assume they have no revenue.

In the diligence process write out the assumptions you have and then test each one by going through the dataroom to verify or debunk the assumptions.

This applies to the team, the product, the revenue, and the fundraising details in particular.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Direct download: Availability_cascade.mp3
Category:general -- posted at: 5:00am CDT

Bandwagon Effect

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The bandwagon effect is a cognitive bias defined by Wikipedia as the tendency to do (or believe) things because many other people do (or believe) the same.

Investors follow the lead of others. The more investors following a deal, the more investors are willing to join.

Investors look for lead investors who will negotiate the terms and diligence it.

To avoid the bandwagon effect in funding a startup, look for experienced investors to follow 

Review carefully the diligence report to see if it matches your expectations.

Verify stated information with other sources.

Challenge the assumptions to understand the deal in more detail. 

For example, if the startup indicates they have revenue, investigate further the quality of that revenue.  

Is it recurring revenue?  Is it concentrated revenue?

Avoid situations where the investors are excited about the deal but no one is actually leading the deal and no one is reviewing the diligence. 

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Direct download: Bandwagon_effect.mp3
Category:general -- posted at: 5:00am CDT

Anchoring

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Anchoring is a cognitive bias defined by Wikipedia as the tendency to rely too heavily, or "anchor", on one trait or piece of information when making decisions (usually the first piece of information acquired on that subject)

Investors tend to attach to the first thing startup pitches and stick with it.

If the startup positions its deal as a service such as providing education technology, investors will view it as an ed-tech service.

On the other hand, if the startup positions their deal as a software as a service business, investors will home in on recurring revenue streams and will look for metrics in that category.

How you position your business at the beginning of the pitch is how most investors will look at it throughout the pitch.

Consider positioning your deal upfront for the investor audience you have.

Position it as an ed-tech service for investors focused on education.

Position it as a software-as-a-service deal for investors focused on recurring revenue.

Position it as a social impact deal for investors focused on impact investments.

Don’t fight the anchoring effect by mispositioning your deal for the investors you are pitching. 

Use anchoring to connect your deal with the investor.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
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Direct download: Anchoring.mp3
Category:general -- posted at: 5:00am CDT

On this episode of Investor Connect, Hall welcomes Kurt Wilkin, CEO of HireBetter, Managing Partner of Bee Cave Capital, and Author of the book  “Who’s Your Mike?”.

For over 25 years, Kurt has advised high-growth, middle-market companies. Through his roles as CEO of HireBetter and a Managing Partner of Bee Cave Capital, he had the opportunity to work with hundreds of entrepreneurs and CEOs—challenging and inspiring them to take their companies to that much-hyped “next-level.”

But before Kurt got to where he is now, he worked in some challenging roles. His goal in writing is to pull back the curtain on the business world and take the reader on the real entrepreneurial journey—bumps and all. No one gets to the top overnight without falling and making mistakes. He hopes to inspire and help others on their path by telling his stories.

Kurt is a  firm believer that business success is all about having the right people. During his career, he has been fortunate to work with hundreds of interesting companies. He hopes his book will inspire, challenge, and entertain you as you chart your course, wherever it may take you.

Kurt shares a bit of everything he had encountered in his business life, the inspiration behind his book, and much more. 

You can visit Kurt at www.beecavecapital.com, hirebetter.com via LinkedIn at www.linkedin.com/in/kurt-wilkin/, www.linkedin.com/company/hirebetter/ via Twitter at www.twitter.com/KurtWilkin, www.twitter.com/hirebetter and via email at kurt.wilkin@hirebetter.com.  

You can purchase his book from his website or from Amazon, at www.amazon.com/Whos-Your-Mike-No-Bullshit-Entrepreneurial/dp/1954020244.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org  

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Direct download: Kurt_Wilkin_of_HireBetter_and_Bee_Cave_Capital_Book_Review.mp3
Category:general -- posted at: 5:00am CDT

Build a Moat

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Warren Buffet once said, “I look for economic castles protected by unbreachable moats.”

In the startup world, investors look for a competitive advantage that can build a moat around the business.

"Me too" businesses are difficult to fund because anyone can start one and compete.

To build a moat around your business consider the following:

Build switching costs into your product to make it more sticky.

Create a brand that attracts others and is different from the competition.

Scale quickly to leave the majority of competitors behind.

Size can provide a decent moat once you have some scale.

Distribution can be a moat to provide more products and more revenue.

Network effects can provide a moat as the network generates additional revenue and decreases costs.

Technology can provide an advantage if the user finds value in it. 

The moat should not be easily duplicated because over time other startups will do so.

Moats should be considered from the getgo as it will increase as the startup grows and scales.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
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Direct download: Build_a_moat.mp3
Category:general -- posted at: 5:00am CDT

Repeatable Systems

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Repeatable systems are a key element in growing and scaling a business.

Once the business is up and running, the founder should start to build repeatable systems.

Anything you do more than once should be documented.

The key steps should be written down and followed each time you do it.

This saves time and improves quality.

It also generates efficiency and consistency.

In a startup, you are not trying to do a thousand things.

Rather, you are trying to do ten things, one thousand times.

The sales process is a good example of using repeatable systems.

Consider this for your sales process:

Define your lead criteria.

Break the sales process down into stages for execution and forecasting.

Continue the process with customers to turn them into repeat customers.

Analyze the process continually to improve it.

By using repeatable processes you can grow your business more efficiently.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
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Direct download: Repeatable_systems.mp3
Category:general -- posted at: 5:00am CDT

Start With Why

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

A key concept in aligning people’s motives is to start with the Why.

The Why represents the motives behind people’s actions and their purpose.

The How represents the methods or steps to get there.

The What represents the results or outcome to achieve.

To align the team in your startup, start with the Why -- why are we doing this?

The Why gives the team a common purpose and motivation behind it.

The Why helps you recruit new employees.

The Why helps you make decisions along the way.

It keeps you focused on your business and avoids distractions from competitors.

Great companies focus on the why first and then go into the what and how.

In raising funding show the investors your why and then go into the how and the what.

If you don’t have a Why statement, then set aside time to figure it out and then share it with others.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Category:general -- posted at: 5:00am CDT

Social Proof

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Social proof is the idea that people look at others to see what they did and then copy their actions.  

The need for social proof can be found throughout the startup world.

Customers will look to see if others have bought the product before they buy it.

Investors will look to see if other investors have invested before they jump in.

It’s one of the key points of influence. 

In fact, the term "social proof" was coined by Robert Cialdini in his book "Influence: The Psychology of Persuasion."

There are several types of social proof one can use.

Experts:  Look for those who have expertise in a specific field.

Display testimonials from experts on your website.

Users:  Those who are already familiar with the product or the company.

Show testimonials on social media from your current customers.

Certification:  Those who have achieved certification status.

Display the certification such as FDA compliance on your pitch slides to investors.

Close contacts:  Those you know well who have some opinion.

Foster word of mouth with your fundraising to influence others to consider investing in your business.

No investor wants to be the first investor and will look for social proof from others. 

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Direct download: Social_proof.mp3
Category:general -- posted at: 5:00am CDT

Gamification

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Gamification applies game-design techniques to applications outside of gaming.

Game techniques can make the application more engaging and productive.

Here are some gamification techniques to include in your application:

Establish flow in the software which is a combination of challenging and workable.

Break large tasks down into smaller ones that give the user a sense of accomplishment.

Create different levels with varying degrees of difficulty.

Let the user customize their workspace.

Provide rewards for accomplishing tasks.

Set up competitions so users can challenge themselves and each other.

Foster collaboration by setting up teams.

Use the story format where appropriate.

Unlock resources based on achievement or purchases.

Using these tools can generate more engagement and productivity by the user. 

Consider applying gamification to your software application.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Direct download: Gamification_01.mp3
Category:general -- posted at: 5:10am CDT

Gamification

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Gamification applies game-design techniques to applications outside of gaming.

Game techniques can make the application more engaging and productive.

Here are some gamification techniques to include in your application:

Establish flow in the software which is a combination of challenging and workable.

Break large tasks down into smaller ones that give the user a sense of accomplishment.

Create different levels with varying degrees of difficulty.

Let the user customize their workspace.

Provide rewards for accomplishing tasks.

Set up competitions so users can challenge themselves and each other.

Foster collaboration by setting up teams.

Use the story format where appropriate.

Unlock resources based on achievement or purchases.

Using these tools can generate more engagement and productivity by the user. 

Consider applying gamification to your software application.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https://tencapital.group/education/ 
For upcoming Events, check out https://tencapital.group/events/  

For Feedback please contact info@tencapital.group   

Please follow, share, and leave a review.

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Direct download: Gamification.mp3
Category:general -- posted at: 5:00am CDT

On this episode of Investor Connect, Hall welcomes Jason Jacobsohn, Founder and Managing Partner at Propellant Ventures.

Located in Chicago, IL, USA, Propellant Ventures is a Seed stage venture capital fund that invests in the growth of Chicago and the greater Midwest across a broad range of powerful, diverse, and leading-edge B2B industries such as healthcare, future of work, supply chain, fintech, and edtech.

Propellant Ventures recognizes that it can be a challenge for early-stage entrepreneurs to raise venture capital. That's why they see that as a tremendous opportunity to be that capital partner at the initial stages of growth.

Jason is well known in the Chicago area as a “connector” and go-to person for entrepreneurs who want to grow and maintain their success. Prior to launching Propellant Ventures, he was a Principal at Bascom Ventures, which is a venture capital fund that invests in seed, growth, and later-stage companies with a Wisconsin alumni connection. 

In addition, Jason launched and currently runs the Chicago chapter of Founder Institute, which is the world’s largest pre-seed startup accelerator, with chapters across 220+ cities around the world. Jason received his MBA from DePaul University and his BBA from the University of Wisconsin-Madison.

Jason helps early-stage entrepreneurs in the Midwest region, find their way to success.  

Visit Propellant Ventures at www.propellant.vc , and on www.linkedin.com/company/68292696/admin

Reach out to Jason at jason@propellant.vc, www.linkedin.com/in/jasonjacobsohn, and on @jasonjacobsohn.

 

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org  

Check out our other podcasts here: https://investorconnect.org/ 
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Direct download: Jason_Jacobson_of_Propellant_Ventures.mp3
Category:general -- posted at: 5:00am CDT

Open Platform vs. Closed Platform

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Open platform vs. closed platform is a key concept in the startup ecosystem.

It defines how the startup will interact with customers, partners, and others.

A closed platform is one in which the startup restricts access in order to monetize its content.

It’s often called a “walled garden” which one must pay to enter.

An open platform is one in which anyone can access the content.  

Open platforms often allow connectivity to other software tools to provide additional functionality.

The user can access the site and create their own content from it.

Open platforms work best when the customer needs to use the content within their own application.

A closed platform offers the content as is and does not provide connectivity to outside applications.

The benefit of a closed platform is a higher level of security and quality of content.

Closed platforms work best for customers who need only the content as provided and don’t need to integrate it with other content.

Monetization in closed platforms occurs at the access points.

Monetization in open platforms occurs elsewhere such as providing premium services.

Consider both options for your startup.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Direct download: Open_platform_vs._close_platform.mp3
Category:general -- posted at: 5:00am CDT

Freemium

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Freemium is a key business model in the startup world.

It’s a pricing strategy that provides a product or service for free in order to attract more users.  

After the user is engaged with the product, the company can upsell the user for paid services. 

The freemium strategy is highly scalable as it can capture new users without the use of a direct sales force.  

The strategy works well with software products because the incremental cost of adding another user is near zero.

The key to a freemium model is the ability to upsell the user into a paid product.

Therefore, the premium features must be compelling. 

One can create a freemium product by taking the company’s main product and limiting its usage, reducing the features available, or limiting the support the user receives.

There are many ways to monetize a group of users.

Consider the following:

Premium services provide additional functionality but at a price.

The content, data, and identity of the users can be monetized.

Companies that sell to the same user base would pay to access those users through advertising or direct marketing.

It’s important to have premium features to upsell to.

Finally, the product must be ‘sticky’ by capturing key information from the user so it’s harder to switch to a competitor product. 

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Category:general -- posted at: 5:00am CDT

Technology Adoption Lifecycle

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Technology adoption lifecycle in the startup world shows how new technologies and products are adopted first by lead users and technologists. 

Following this group are early and late-stage majority users.

The laggards are the last group to accept the new technology. 

This concept comes from Geoffrey Moore in his book entitled, “Crossing the Chasm”.

The technology adoption lifecycle guides the startup on how to build and market products throughout the cycle.

In the early days, the startup will sell to the technologists who need the functionality of the product but don’t care about the ease of use or the price.

Once the product "crosses the chasm" and is now accepted by the majority of users, the game changes.

The early majority will pay a higher price but it must be easier to use.

The late majority won’t pay a higher price and it must be even easier to use than before.

The volume of users will rise greatly giving the term “s-curve” to the shape of the growth.

The S-curve shows the market taking off and the number of users increasing dramatically.

A startup must be able to grow and scale their systems to take advantage of this growth.

Finally, the laggards are the last to adopt the product which must be low-cost and very easy to use. 

In pursuing a market consider where it is on the technology adoption lifecycle curve and adjust your product and pricing accordingly.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Category:general -- posted at: 5:00am CDT

Forcing Function

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Forcing function is an activity or event that forces one to take action and produce a result.

Forcing function is a mental model for how to set up a startup so it produces a result. 

Here are some examples:

Precommitment -- in selling your product use monthly or annual contracts that prescribe follow-on payments.

Stages and checkpoints -- in managing employees set up levels and stages that employees work through and use checkpoints to graduate employees to higher salaries.

Constraints -- limit the resources the team has to work with to force cost-cutting and encourage creative problem-solving approaches.

Meetings -- only call meetings when you have a decision to make or a deliverable to complete.

This reduces unnecessary meetings and forces the team to be more productive.

Online calls -- schedule calls with prospects to be only 15 minutes long. This forces the prospect and the salesperson to make the most of their time. 

Forcing functions can be applied throughout the startup organization.

By applying artificial constraints one can generate greater productivity and reduce unnecessary costs.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Category:general -- posted at: 5:00am CDT

Technical Debt

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Technical debt is a concept in software development that accounts for additional work to recode a program that was developed quickly rather than properly.

It’s the result of prioritizing the speed of development over the quality of code.

To manage technical debt in your business consider the following:

Define the technical debt currently in the business.

Review code segments that have undergone many updates and are no longer clean, structured code segments.

Consider the overall design of the system upfront and try and future-proof it.

Use a modular architecture so quality code can be reused.

Avoid adding more people or processes to the software development process.

Instead, apply fixes to the current processes.

Technical debt like financial debt comes with interest payments that come in the form of the technical team doing additional work to compensate for the shortcuts taken earlier.

Most startups have some technical debt in their product. 

If there’s too much technical debt this will cost the startup later by having to rework existing code.

Focus on what the business needs and compare it to what it currently has to determine how to manage technical debt.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Category:general -- posted at: 5:00am CDT

On this episode of Investor Connect, Hall welcomes Chelsea Toler, President of The Keep Families Giving Foundation.

Located in Austin, Texas, USA, The Keep Families Giving Foundation educates and cultivates the next generation of philanthropists while creating a collaborative community across generations and sectors for social good.

They envision a world where the next generation of philanthropists are provided with the education, mentorship, community, leadership opportunities, and tools needed to carry on their family legacy and champion their own social good causes. 

Chelsea graduated from The University of Texas with a bachelor’s degree in Liberal Arts Honors, Plan 1, and Humanities Honors. Chelsea received her Master of Liberal Arts with a focus on Grant Writing and Nonprofit Leadership from St. Edward's University in 2017 and is currently pursuing her Ph.D. in Professional Adult and Community Education with a research focus on intergenerational education in the Philanthropy sector at Texas State University as the cohort's only Doctoral Merit Fellow.

Chelsea is passionate about intergenerational education, inspiring the next generation of philanthropists, and serves as a member of Nexus, Nexus' partnership brain trust with the United Nations (UNFPA), the Association of Fundraising Professionals, the Young Professionals Network of Austin, Southwestern Angel Network, Art Crowd, and the Grant Writing Association.

Chelsea educates the next generations in impact and philanthropy in alignment with United Nations Sustainable Development Goals. 

 

About World Logic Day

Logictry’s World Logic Day Forum will highlight the importance of Logic across sectors around the world in alignment with the United Nations Sustainable Development Goals.

Participate in intergenerational, cross-sector panels and sessions to help share more about the why behind various UN SDG-related initiatives and promote collaboration for world peace. Logictry will lead this initiative in partnership with the NOVA Impact and the UN SDSN Leadership teams.

Register for World Logic Day 2023 here:  

www.eventbrite.com/e/world-logic-day-2023-tickets-432497239887 

Visit The Keep Families Giving Foundation at www.keepfamiliesgiving.org, and www.linkedin.com/company/keep-families-giving.

Reach out to Chelsea at chelsea@logictry.com, and www.linkedin.com/in/catoler92.

 

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org  

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Direct download: Chelsea_Toler_of_The_Keep_Families_Giving_Foundation.mp3
Category:general -- posted at: 5:00am CDT

Thought Experiments for Startups

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

A thought experiment is a hypothesis laid out for thinking through its consequences.

Many great thinkers have used this technique to solve problems.

Galileo used it to prove his idea that mass does not influence acceleration when he dropped both a heavy and light ball from the Tower of Pisa to demonstrate that both objects landed at the same time.

Startups can use thought experiments to test their startup hypothesis.

Here are some example experiments:

If an investor gave you $1M today how would you deploy it?

If you don’t know exactly what you would do with the funding, then you are not ready for it.

If you were an investor looking at your company what would you want to know?

Review your pitch deck to see if it includes all the points that come to mind.

If you can imagine why an investor would pass on your deal, then what risks do you see in the deal?

Determine how you can mitigate those risks and show the company will succeed.

If you asked two or three competitors what they think about your business, what would they say?

Consider fixing those issues in your business.

By using thought experiments the founder can test their startup's main hypothesis and each aspect of the business.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Direct download: Thought_experiments_for_startups.mp3
Category:general -- posted at: 5:00am CDT

First Principles

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

First principles are basic truths that cannot be deduced from any other proposition or assumption.

Founders should base their startups and products on first principles.

First principles research requires direct contact with customers to uncover the core problem.

By going back to first principles the startup founder can approach the problem from a new perspective.

This generates new products and business models not previously considered.

To use the first principle start with the customer’s problem to be solved. 

What is the problem the customer faces and is it challenging enough that they will pay money to solve it?

Once you have identified the problem you must test it to see if the market is big enough.

If you have a big enough market you can ideate on a solution that is compelling enough to launch a business.

The alternative to first principles is reasoning by analogy in which one makes superficial connections between the customer's problem and a solution.

This leads to solving the wrong problem or solving a problem that doesn’t exist.

Startup founders should talk with customers directly and use first principles to find the heart of the problem to be solved.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Direct download: First_principles.mp3
Category:general -- posted at: 5:00am CDT

Second-Order Thinking

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

First-order thinking looks at solving the immediate problem.

Second-order thinking looks at the consequences of solving the problem.

To practice second-order thinking, ask the question, “and then what?”

Most people look at the world through first-order thinking such as

“That product is on sale, I should buy it.”

Second-order thinking asks the question, "then what?"

“If I buy the product then I’ll need to use it.  I really don’t have a use for it, therefore, I shouldn’t buy it.”

In ideating on a startup problem, move beyond first-order thinking to second-order thinking.

Given a customer problem, what are the implications of solving it in a few days, a few months, and a few years?

How will the market respond to the problem?

What will competitors do?

How important is this problem to the customer?

How else will the customer respond to the problem?

First-order thinking is simple and straightforward.

Second-order thinking is complex and complicated.

Consider applying second-order thinking to the customer problem your company solves.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Direct download: Second-order_thinking.mp3
Category:general -- posted at: 5:00am CDT

Probabilistic Thinking

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Probabilistic thinking is making an estimate using math or logic to determine the likelihood that an outcome is going to happen.

This often involves statistics and historical data.

If the revenue in a company has grown by 10% for each of the past five years, then probabilistic thinking will point to a growth rate of 10% for the coming year.

Founders can use probabilistic thinking also for uncertain situations where there is little historical data. 

In our example, for estimating the revenue in the first year of a company without the benefit of a track record, we can use probabilistic reasoning.

In this case, we can use logic to estimate the revenue.

For example, we could look at similar companies to see what revenue they generated in their first year. 

In applying probabilistic thinking, consider all the options.  

Expand your focus on what is probable to include what is possible.

Gather additional information to tune the probabilistic estimation.  

This is called Bayes Theorem which incorporates new and relevant information into the decision-making process.

Apply probabilistic thinking to your startup decisions.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Direct download: Probabilistic_thinking.mp3
Category:general -- posted at: 5:00am CDT

Economies of Scale

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Economies of scale is an economic principle in which the costs of delivering a product go down as the volume goes up.

Over the life of a product, the cost per unit should decrease.

For startups, this means the cost to build your product should go down as you ramp up sales.

Economies of scale can come from a reduced cost of materials as the startup purchases higher volumes. 

It can also come from deploying technology tools and spreading that cost over more units or customers.

There are also financial benefits.  As the startup grows larger it can raise funding or take on loans at a lower rate.

Economies of scale can help the company grow to a larger size.

It can also help increase profits. 

Customers should see lower prices and better products.

Employees should see higher wages.

It’s important to plan for economies of scale and build it into the business model. 

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Direct download: Economies_of_scale.mp3
Category:general -- posted at: 5:00am CDT

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