Investor Connect Podcast (general)

Belief Bias

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

The belief bias is a bias defined by Wikipedia as an effect where someone's evaluation of the logical strength of an argument is biased by the believability of the conclusion

Similar to the confirmation bias, investors bring their experience to the startup pitch and make judgments on the proposed pitch while underway.

Investors will believe more strongly in a startup pitch if they agree with the proposed fundraising plan and exit strategy.

Startups that propose outsized forecasts and out-of-the-norm exit valuations will find it harder to gain the support of the investor.

To overcome the belief bias, investors should consider the market sector, the strength of the technology and product, and the skills of the team before estimating the outcome.

Startups should make clear the facts behind the proposed valuation and exit plan using comparables and other factors that impact the outcome.

The startup continues to grow and change so it’s important to stay up to date with the latest valuations and fundraising plans. 

 

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: Belief_Bias.mp3
Category:general -- posted at: 5:00am CST

Ben Franklin Effect

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

The Ben Franklin effect is defined by Wikipedia as a person who has performed a favor for someone is more likely to do another favor for that person than they would be if they had received a favor from that person.

This effect comes from a statement by Ben Franklin:

“He that has once done you a Kindness will be more ready to do you another, than he whom you yourself have obliged.”

Those who help you do so because they like you and not because you have done a favor for them. 

They will want to remain consistent in their beliefs and will continue to help you.

Startups should ping potential investors for advice and support.

Once an investor or mentor provides support for your startup they will most likely continue to do so. 

To make use of this effect keep track of those who help you.

Return to them for more support.

Avoid asking too much and instead spread out the requests over time.

 

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/ 
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Direct download: Ben_Franklin_Effect.mp3
Category:general -- posted at: 5:00am CST

Shared Information Bias

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

The shared information bias is a cognitive bias defined by Wikipedia as the tendency for group members to spend more time and energy discussing information that all members are already familiar with and less time and energy discussing information that only some members are aware of.

Investors focus on information their investor group already knows and talks about but spend less time on information that is not well known.

In diligence, investors focus on the areas they already know and give less attention to the areas that are unknown.

To overcome shared information bias, consider the following:

Create a checklist of key topics to discuss and move the group forward through the list.

Give weight to the voices discussing diverse opinions.

Look for those who have experience with the topics and highlight their opinions.

Expand your group to include others who have more diverse experiences.

Capture the dialog into written form for follow-up review.

It’s easy to talk about the things you know and more difficult to discuss that which is new.

 

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/ 
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Direct download: Shared_Information_Bias.mp3
Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes Hayden Blackburn, executive director of TechFW and director of Cowtown Angels.

Based in Fort Worth, TX, Cowtown Angels is an angel network that connects entrepreneurs seeking early-stage funding with local investors in an environment that accelerates growth and rewards strategic risk-taking. Cowtown Angels is a program of TechFW, and is a member of the Angel Capital Association and the Alliance of Texas Angel Networks.

TechFW is a 501(c)(3) non-profit organization that has been helping entrepreneurs launch and grow emerging technology companies since 1998. TechFW identifies entrepreneurs and startup companies with technologies that have a high potential for success in the marketplace.

Hayden has centered his career around social entrepreneurship and economic development. He is passionate about helping people realize their dreams and creating a positive impact in the world. Hayden coaches entrepreneurs commercializing innovative technologies, facilitates connections between entrepreneurs and angel investors, partners with universities to commercialize technologies, and is a leader in the development of an entrepreneurial culture and mindset across the Dallas-Fort Worth region. 

Hayden has helped organize multiple community staples for entrepreneurs, including Startup Weekend and 1 Million Cups Fort Worth. Hayden serves on the boards of organizations working in economic development and education, including Near Southside Inc., the Fort Worth Public Library Foundation, and the International Business Innovation Association.

Hayden dives deep into the role of investors and founders, the importance of learning, and the future of Angel groups. 

Visit Cowtown Angels at www.cowtownangels.org, www.linkedin.com/company/cowtown-angels-investor-network. And, TechFW at www.techfortworth.org/, https://www.linkedin.com/company/techfw-incubator-accelerator/. 

Reach out to Hayden at hayden@techfortworth.org, and www.linkedin.com/in/haydenblackburn.

_______________________________________________________

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: Hayden_Blackburn.mp3
Category:general -- posted at: 5:00am CST

Picture Superiority Effect

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

The picture superiority effect is a phenomenon defined by Wikipedia whereby the notion that concepts that are learned by viewing pictures are more easily and frequently recalled than are concepts that are learned by viewing their written word form counterparts.

Investors identify and remember more from images than words.

Startups should use pictures rather than words wherever possible in the pitch presentation.

Use pictures that are relevant to the content and clarify the message.

When this is not possible then the startup should use distinctive words.

These are words that are descriptive and create an image in the listener’s mind.

Startups should capture what they do and how they do it into mantras and taglines. 

Mantras and taglines create mental images that help the investor remember what you do.

Startups can also use video, animation, charts, and graphs as well.

 

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/ 
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Category:general -- posted at: 5:00am CST

Modality Effect

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

The modality effect is a phenomenon defined by Wikipedia whereby memory recall is higher for the last items of a list when the list items were received via speech than when they were received through writing.

In a startup pitch, the last slides are the ones that the investors will remember most.

These are not necessarily the most important slides to consider.

Investors should be aware of the modality effect to mitigate it.

To overcome the modality effect, consider the following points:

Investors should take notes during the pitch and capture the most important aspects of the deal.

Identify the key risks that must be overcome.

Also, take note of the key value propositions in the deal.

In diligence consider these factors.

Raise questions on the key risks and value propositions in the deal to understand it better. 

Investors should consider what are the most salient features of the deal and explore those before investing.

 

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/ 
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Direct download: Modality_Effect.mp3
Category:general -- posted at: 5:00am CST

Levels of Processing Effect

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

The level of processing effect is a phenomenon defined by Wikipedia whereby different methods of encoding information into memory have different levels of effectiveness.

Different forms of communication and listener processing will affect the investor’s ability to remember.

Shallow learning results in short-term knowledge retention.

Deep learning results in long-term knowledge retention.

It’s important to understand one's learning style.

To overcome the levels of processing effect, consider the following:

Focus on the core message and internalize it.

Apply critical thinking to the process and ask questions throughout the pitch.

Review the key points to see what you can remember and what you missed.

Consider the palace method in which you build a mental picture of a room and fill it with objects that remind you of the key points of the pitch.

It’s important to develop listening and learning skills when analyzing startup deals.

 

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/ 
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Direct download: Levels_of_Processing_Effect.mp3
Category:general -- posted at: 5:00am CST

Lag Effect

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

The lag effect is a phenomenon defined by Wikipedia whereby learning is greater when studying is spread out over time, as opposed to studying the same amount of time in a single session. 

Investors learn more about the startup if the information is spread out over time.

It helps to understand the startup if you have multiple interactions rather than one long session.

To overcome the lag effect, consider the following:

Set up a series of meetings and calls in which to engage the startup to learn more.

Spread out the meetings over a period of time so you can track their progress.

In addition to the founder, talk to the other team members to gain multiple perspectives on the startup and their status.

Track the startups’ progression with sales, the team, product development and their fundraise.

This process will help you understand the startup better and retain more information about them.

 

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/ 
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Category:general -- posted at: 5:00am CST

Semmelweis Reflex

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

Semmelweis reflex is a cognitive bias defined by Wikipedia as the tendency to reject new evidence that contradicts a paradigm.

Some investors reject startups if it goes against conventional wisdom.

In the startup world, there are always new technologies, markets, and business models to support them.  

It takes some effort to learn about these new areas and so can be easily dismissed as not important. 

To overcome the Semmelweis reflex, investors should bring some level of curiosity to the process.

The investor should set aside some time to learn about new markets and technologies.  

Confronted with a new market or business model, the investor should learn more about it before making a decision.

Startups presenting new ideas must make it real to the investor with concrete examples and facts.

Startups must bring evidence of how a new business model can work to show validation. 

The startup world is filled with new technologies and markets so it’s important to remain open-minded in startup investing.

 

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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On this episode of Investor Connect, Hall welcomes Archil Cheishvili, CEO, President & Director at GenesisAI.

Located in Boston, Massachusetts, USA, GenesisAI is a Machine Learning protocol. On top of this protocol, they are building a marketplace for AI (Artificial Intelligence) products and services - Amazon for AI. The marketplace connects companies in need of AI services, data, and models with companies interested to monetize their AI tech.

Archil is a serial entrepreneur who graduated from Harvard University. He worked at Bridgewater Associates and went on to co-found The Bears, which he later sold and made a 6x return on. He went on to become the VP of Artificial Intelligence at venture capital firm IDFEC. He is recognized by media outlets including the New York Post, Forbes, and Yahoo Finance.

Archie advises entrepreneurs in the AI sector. He shares how he sees the industry evolving and discusses the biggest challenge they face.

Archil talks about the present and future of AI, the groundbreaking potential of ChatGPT, practical AI applications, and his Genesis AI project.

Visit GenesisAI at www.genesisai.io/, www.linkedin.com/company/genesisai, and on twitter.com/OfficialGenAI.

Reach out to Archil at archil@genesisai.io, and at www.linkedin.com/in/archie-archil-cheishvili-854aa792/.

_______________________________________________________

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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Stereotyping

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

Stereotyping is a cognitive bias defined by Wikipedia as expecting a member of a group to have certain characteristics without having actual information about that individual.

Investors can stereotype startups based on their previous experience.

This can be a bias against a sector of business, a leadership style, or another.

To overcome stereotyping, investors should set aside preconceived notions and examine the facts available.

Investors should look at the deal, the team, and the market as a growth opportunity.

Investors should also look at similar investments by other investors to learn more about the deal.

Investors need to generate self-awareness to understand biases that come into their decision-making.

With awareness, it becomes easier for investors to change their thought processes.

The startup world is constantly changing and old methods are being replaced by new ones.

 

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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Halo Effect

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

The halo effect is a cognitive bias defined by Wikipedia as the tendency for a person's positive or negative traits to "spill over" from one personality area to another in others' perceptions of them. 

Investors often presume those who are good at pitching and are passionate are also good at running the business. 

This often leads to investments in startups that are missing key success factors.

To overcome the halo effect, investors should be aware of it and look for evidence that the founder can run the business.

Investors should have specific criteria for making an investment and should assess the startup for that criteria.

Investors need to have an accurate understanding of the startup's strengths and weaknesses as the investor may need to step in and help fill any gaps.

Keeping in mind the cognitive bias will help investors overcome it and focus on the core aspects of the 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 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Ingroup Bias

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

The Ingroup bias is a cognitive bias defined by Wikipedia as the tendency for people to give preferential treatment to others they perceive to be members of their own groups.

Investors give preference to those in their network over those outside their network.

This can be a challenge as startup investing is often based on network referrals and personal recommendations.

Investors prioritize those in their network over those outside their network.

To overcome ingroup bias, build relationships with other groups and formally syndicate deal-flow. 

Develop formal criteria for deal-flow and apply them rigorously to deals coming from your own network.

Poor investments often come from personal recommendations that are well-known but don’t meet the investors criteria.

For each deal both within your network and from outside, apply your screening criteria.

Every group has some number of quality deals so consider deals from other groups in your deal-flow process.

 

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/ 
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Self-Serving Bias

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

The self-serving bias is a cognitive bias defined by Wikipedia as the tendency to claim more responsibility for successes than failures.

Investors use successful investments as proxies for their skill but attribute the failures to other causes.

Investors are naturally optimistic.

When things go wrong it’s easy to blame external factors.

To overcome the self-serving bias, consider the following:

Maintain awareness about the self-serving bias.  

Check yourself when giving yourself the credit and give credit to other factors for the success.

For failures, take some time to review it so you understand it well. 

Make yourself accountable for any failures on your part. 

And look for ways to improve your skills and process.

 

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/ 
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Selective Perception

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

Selective perception is a cognitive bias defined by Wikipedia as the tendency for expectations to affect perception.

Investors tend to see what they want to see in a startup deal.

Investors choose those elements in the pitch that match their experience and expectations.

Selective perception comes from previous experiences with startups both good and bad.

To overcome selective perception, perform active listening.

Take in what is being said without judgment or interpretation.

Ask confirming questions to make sure you are hearing what is being said.

Try to understand the startup completely before making a decision.

Check with other investors for their perception to see how it matches and differs from your own.

It’s easy to focus on parts of the deal that matches your understanding and ignore those elements that don’t fit. 

 

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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On this episode of Investor Connect, Hall welcomes Kristina Chapple, Director at 11 Tribes Ventures.

Located in Chicago, IL, USA, 11 Tribes Ventures is an early-stage venture fund that proactively invests in the well-being of entrepreneurs. The fund is radical in its allocation of resources to fund founder well-being, putting real dollars toward their mental, emotional, and spiritual health. Thesis-wise, 11 Tribes invests in purpose-driven entrepreneurs disrupting legacy industries. The company provides innovative, founder-focused venture capital investment to early-stage technology companies in non-traditional technology hubs across the county. 

11 Tribes Ventures is disrupting the business model of venture capital. The traditional “growth at all costs” mentality produces founder burnout, unsettling ethics, and failed investments. By rejecting this status quo of dollars-driven, people-indifferent investing in lieu of an approach that centers around building businesses that are profitable and sustainable, they’re changing the narrative from burnout to flourishing by redefining the ecosystem of support around each founder.

Kristina is a Director at 11 Tribes Ventures. Originally, she joined the firm as employee #1 to be the point person for all things pipeline: sourcing, screening, and diligence. In 6 months, alongside the growth of 11 Tribes, Kristina’s responsibilities have expanded to encompass fundraising and operations. She serves as 11 Tribes’ boots on the ground in the Chicago Tech & Venture ecosystem.

With interests in the disciplines of City Planning and Entrepreneurship, Kristina has a track record of taking ownership in building initiatives that unleash measurable, constructive impact on her communities. Throughout her life, she has been fiercely attentive to gaps in human connection and has creatively responded: she launched a school-wide movement to combat social isolation by equipping students to engage in better conversations. Today, the “Whisper” Movement has now scaled to 18 schools across Atlanta.

Kristina talks about her background, how to invest in early-stage venture funds, and the best practices for running venture funds.

Visit 11 Tribes Ventures at 11tribes.vc, www.linkedin.com/company/11-tribes, and on twitter.com/11tribesvc

Reach out to Kristina at kristina@11tribes.vc, www.linkedin.com/in/kristina-chapple-48052717a, and on twitter.com/KristinaChapp.

_______________________________________________________

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

Present Bias

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

Present bias is a cognitive bias defined by Wikipedia as the tendency of people to give stronger weight to payoffs that are closer to the present time when considering trade-offs between two future moments

Early exits weigh stronger on investors than further-out exits even if substantially larger.

Under present bias, investors forgo longer-term gains for immediate gratification.

To overcome present bias, consider yourself in the future compared to today.

Ask what your future self wants rather than your present-day self.

If holding the investment longer will make your future self happier, then that can outweigh what your present self wants. 

Another way to overcome present bias is to set goals and criteria for buying and selling and use those for determining when to buy and sell. 

Finally, there’s the time value of money which measures how much future returns are worth based on the time to return.  

By using these calculations you can see the quantitative difference between the two investment choices. 

 

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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Outcome Bias

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

Outcome bias is a cognitive bias defined by Wikipedia as the tendency to judge a decision by its eventual outcome instead of based on the quality of the decision at the time it was made.

Investors judge an investment based on the outcome alone and often disregard the circumstances under which it was made.

Results can come from factors other than the original decision.

To overcome the outcome bias, an investor should take notes about the information available and the decision process at the time of investment.  

The investor can later review the information available to determine the quality of the investment decision.

By separating the decision-making process from the results one can distinguish between good or bad decisions from good or bad results.

There are many exogenous factors in startup investing. 

Investors should gather relevant information and make careful decisions about each investment. 

 

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.

_______________________________________________________

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Not Invented Here

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

Not invented here is a cognitive bias defined by Wikipedia as the aversion to contact with or use of products, research, standards, or knowledge developed outside a group. 

Investors can be biased toward startups that have developed the idea and strategy with the investor's input. 

This leads to investments into startups that are substandard.

Investors should be aware of the bias and recognize it in their decision-making process.

To overcome this bias, the investor should develop a criteria for investment and check to see how the startup does or does not meet that criteria.

On the other hand, investors may overlook a good startup because they had no part in developing the idea.

To overcome the bias, the investor should become familiar with the business and assess it for what has been done.  

The investor should look for first principles such as the strength of the team and how much traction has been generated.

The investor should be open to new ideas and types of startups as the startup world is constantly changing.

 

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.

_______________________________________________________

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Neglect of Probability

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

Neglect of probability is a cognitive bias defined by Wikipedia as the tendency to completely disregard probability when making a decision under uncertainty.

Investors can be biased by their previous experiences and ignore the probability of success or failure in potential startup investments.

Those who lost money on previous investments may be slow to invest while those who made money are more likely to invest.

The probability of success or failure is the same for both.

Recognize the probability bias in making decisions. 

Intuition, while helpful, can be tricky to use in startup investing. 

To overcome the bias, determine an amount to invest and a criteria.

Invest according to the criteria till the funds are deployed.  

By making the decisions based on specific criteria and for a predetermined amount of money, the probability factor is taken out of the process.

 

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.

_______________________________________________________

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Law of the Instrument

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

The Law of the instrument is a cognitive bias defined by Wikipedia as the over-reliance on a familiar tool or method, ignoring or under-valuing alternative approaches. 

"If all you have is a hammer, everything looks like a nail."

Investors use the deal flow and screening process they are most familiar with.  These tools can favor some deals over others.  

Deal flow channels provide a certain type of deal flow which may or may not be the best available.

Explore other deal flow channels to find better deals.

Also, the investor’s screening process focuses on specific aspects of the startup such as team, traction, or market size.

Consider other screening criteria to find better deals.

From these efforts consider updating your deal flow and screening process overall.

As startup markets change and evolve, new business models and market conditions prevail.  

New models and markets often need new deal flow and screening processes.

Explore how other investors find and screen startups and compare them to 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.

_______________________________________________________

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On this episode of Investor Connect, Hall welcomes Brett Calhoun, Managing Director and Partner at Scale VC.

Located in Columbia, Missouri, USA, Scale VC is an accelerator fund and venture studio investing monetary and social capital in early-stage tech founders who are strengthened by struggle. 

Scale brings a team of dedicated operators who have the insights & support from building billion-dollar companies to remove unnecessary barriers, so founders can focus on the hard stuff that matters.

Brett, is the Managing Director and Partner at Scale, building and investing in startups at the earliest stages. He is the Co-Founder of lending startup CharlieMike and a founding team member of tax software startup CapGains. Prior, he had investing experience at The LegalTech Fund and was an early employee at VC-backed Paytient.

Brett shares the challenges of starting a venture capital business, the opportunities, and the right "venture capital lifestyle".  

Visit Scale VC at www.scale-vc.com, and on www.linkedin.com/company/scale-incubator.

Reach out to Brett at brett@scale-vc.com, www.linkedin.com/in/brettcalhoun393 , and on twitter.com/brettcalhounn.

_______________________________________________________

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Loss Aversion

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

Loss aversion is a cognitive bias defined by Wikipedia as the disutility of giving up an object is greater than the utility associated with acquiring it.

Investors will continue to hold a position in losing startups because of hating to lose and clinging hopefully to a potential turnaround.

To overcome loss aversion startup investors should consider these points:

When making an investment consider the funds lost from day one.  Any returns will be a pleasant upside. 

Consider the fundamentals of the business and not just the current status.

Treat the investment as a financial transaction and not a personal win or loss.

Diversify your investments so one loss is relatively small.

Keep in mind the overall position of investments rather than each specific deal.

Develop a plan for each investment including follow on funding, early exit options, and tax write-offs if it all goes to zero. 

 

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.

_______________________________________________________

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IKEA effect

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

The IKEA effect is a cognitive bias defined by Wikipedia as the tendency for people to place a disproportionately high value on objects that they partially assembled themselves, such as furniture from IKEA, regardless of the quality of the end product.

Investors will have more affinity for a startup if they’ve had a hand in helping build it.

This leads to bad investment decisions as the investor is supporting the work they put into the startup even though the startup doesn’t meet their criteria for funding. 

To overcome the IKEA effect the investor should separate their personal contribution from the investment decision.

Compare the startup to others on each aspect of the business such as team, traction, and market.

Review the data to see what it says about the startup.

Seek out independent analysis and perspective about the startup.

Check to see how it compares against your investment thesis and criteria.

The IKEA effect is subtle and can distort one’s perceptions.

 

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.

_______________________________________________________

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Groupthink

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

Groupthink is a cognitive bias defined by Wikipedia as the psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. 

Since many investors invest as a group and use social proof as part of their decision process, it’s easy to fall into the trap of groupthink.

In pitch sessions, investors often follow the lead of other investors so as to fit in even if they don’t necessarily find the startup to be attractive. 

To overcome groupthink, build diversity into your group with different skills and investment strategies.

Maintain a neutral position throughout the process. 

Encourage discussion among the members to surface counterarguments and questions.

Schedule time for independent research to find out more about the deal from other sources.

Dedicate someone as the devil’s advocate to vocalize counter opinions.

Look for the naysayers and encourage a healthy debate with alternative points of view about the deal.

 

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.

_______________________________________________________

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Mere Exposure Effect

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

Mere exposure effect is a cognitive bias defined by Wikipedia as the tendency to express undue liking for things merely because of familiarity with them.

Angel investors are much more likely to invest in deals in which they have more exposure to it. 

This can lead to investments in substandard startups.

To avoid the mere exposure effect, the investor should first recognize it as a bias and keep it in mind when reviewing startups for funding.

The investor should ask the question, "why invest in this startup?" and check for the answer.

If it’s because the startup is familiar but the team, product, or market is not outstanding, then it should be a pass.

While familiarity may give the investor more information about the startup it should not stand in for proper diligence.

The investor should have a set of criteria by which to judge startups and should use that criteria in testing them for funding.

 

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.

_______________________________________________________

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Gambler's fallacy

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

The gambler’s fallacy is a cognitive bias defined by Wikipedia as the tendency to think that future probabilities are altered by past events when in reality they are unchanged. 

Investors bet on startups that follow what other recent successful startups have done even though the potential of the startup is no better than before.

For example, after a startup proves successful in a sector, investors rush to that sector to fund similar startups.

While the market may be ripe for startup success there are many other factors that come into play to achieve a successful exit.

To overcome the gambler's fallacy, the investor should focus on the data describing the future. 

Past events don’t predict future success.

Each startup is unique and success is driven by many factors.

Investors should be aware of the gambler's fallacy and judge each startup on its merits.

 

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.

_______________________________________________________

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On this episode of Investor Connect, Hall welcomes Christian Kameir, Managing Partner at Sustany Capital.

Located in Newport Beach, CA/USA, Sustany Capital is a deeply thesis-driven investment firm, applying a first principles approach and scientific rigor to investments in technologies positioned to reshape global economic activity. Having invested in network technologies for more than twenty years, Sustany’s managing partners started researching investment opportunities in the blockchain and Web3 space in 2013.

The combined innovation power of these technological paradigms opens the door for moving more than one-third of global GDP away from incumbent middlemen to new solutions providers. After four years of thesis development and successful principal investments, Sustany’s first fund was formally established in January 2018. 

Christian, a managing partner at Sustany Capital, has been a successful tech entrepreneur since the internet dial-up days and led the merger of the leading internet service providers in Europe during the Web1 area. In 2000 he moved to California to co-found his first technology venture fund. 

Christian studied linguistics, and natural language programming, and is a graduate of Muenster's School of Law. He serves as a board member at the data standards organization Open Travel, chairs the Banking and Financial Services Interest Group at the Decentralized Identity Foundation, and is a financial fiduciary board member at a human rights foundation. 

Christian shares his background and discusses Web3, blockchain, and much more.

Visit Sustany Capital at www.sustany.co, and on www.linkedin.com/company/sustany-capital.

Reach out to Christian at chris@sustany.co, www.linkedin.com/in/kameir, and on twitter.com/kameir.

 

_______________________________________________________

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Frequency Illusion

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

Frequency illusion is a cognitive bias defined by Wikipedia as the illusion in which a word, a name, or other things that have recently come to one's attention suddenly seems to appear with improbable frequency shortly afterward.

This comes from the mind's selective attention kicking in when hearing something new. 

The mind then starts to look for that pattern elsewhere.

After an investor learns of a startup solving a new problem the investor seems to hear about that problem more often even when there’s no true frequency.

This gives the investor the impression the startup’s application is more prevalent than it really is.

To overcome the frequency illusion, an investor just knowing it as an effect can realize the startup’s focus is no more prominent than other startups' focus.

The investor should research the application area to fully understand the magnitude of the problem and its prevalence.

Quantitative analysis will clarify the market size providing a better understanding of the startup’s potential.

 

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.

_______________________________________________________

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Dunning-Kruger Effect

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

The Dunning-Kruger effect is a cognitive bias defined by Wikipedia as the tendency for unskilled individuals to overestimate their own ability and the tendency for experts to underestimate their own ability.

Investors reviewing deals in an unfamiliar sector often consider their skills to be greater than they are.

Investors who are familiar with a sector often don’t realize how strong their perceptions are.

To overcome the Dunning-Kruger effect, an investor should slow down and take time to analyze the deal more carefully. 

Write out the assumptions about the deal and test each one to see if it holds true.

Investors often impute their own industry practices on the startup’s industry which does not always hold true.

Mentally assume you know less than you think you do.

Reach out to others who know the industry better to understand it.

 

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.

_______________________________________________________

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Disposition Effect

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

Disposition effect is a cognitive bias defined by Wikipedia as the tendency to sell an asset that has accumulated in value and resist selling an asset that has declined in value.

Investors find it difficult to sell startup investments since they are no longer growing but hold the promise of “coming back.”

Investors fund many startups most of which will not return the original value.

Many investors hold onto the investment with the hope that they eventually will achieve success.  

Investors should review their portfolio of investments to determine which ones have a strong enough case to continue.

For those startups that don’t have a case, the investor should explore selling out of the deal.

In follow-on fundraises, the investor could look for someone to take their place and buy them out. 

Another path is to write redemption clauses into the investment documents so the investor has a choice about leaving the deal.

 

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.

_______________________________________________________

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Decoy Effect

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

Decoy effect is a cognitive bias defined by Wikipedia as a situation in which preferences for either option A or B change in favor of option B when option C is presented, which is completely dominated by option B (inferior in all respects) and partially dominated by option A

Investors will find a deal more attractive when additional deals of lesser quality are presented at the same time.

During pitch sessions, investors change their preferences based on the quality of deals shown as the session proceeds.

An inferior deal will make a previous pitch look more attractive.

Investors subconsciously compare each deal to the others in the lineup and choose the best one among them.

As an investor, it’s important to maintain an absolute criteria rather than a relative one.

Criteria such as revenue levels, team experience, and target growth rates will help you avoid selecting the best deal in a group as that deal may fall below the investor's standards.

 

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.

_______________________________________________________

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Continued Influence Effect

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

Some investors will hold onto their preconceived notions even when presented with corrected information.

For example, a startup positions their company as providing a service but they don’t mention they have recurring revenue.

Recurring revenue shows scalability while service businesses typically do not.

Even after the investor learns about the recurring revenue, they will continue to view it as a service business lacking scalability.

The startup may correct its misinformation which is often an omission. But the investor may not consider the startup as valuable as if they had started with the correct information.

To correct the misinformation, having the CEO make the clarification as an authority can help overcome the bias.

Show the reason why the misinformation occurred so it’s clear it came from faulty or outdated information.

Have a third party confirm the corrected information as it brings a neutral perspective which can often sway investors.

It’s best to avoid misinformation to begin with as it can take a great deal of time and work to overcome it.

 

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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On this episode of Investor Connect, Hall welcomes Alicia Cramer, host of The Mind of Business Success Podcast and Business Mindset Mentor at AC Intl LLC. 

Located in Tucson, Arizona, USA, AC Intl LLC helps business owners retrain their minds to create a life and business they love. Her clients have referred to her as their "secret weapon" for achieving massive gains in life and business. Alicia can spot limiting beliefs and bad mindset habits, and help you shift them fast. 

The Mind of Business Success Podcast is the place for high-growth business owners to fill their minds with game-changing strategies and principles for success in life and business. Host Alicia Cramer is an Inner Game Strategist who works with business owners to accelerate to multiple 7-figures by learning the esoteric and scientific art of reconditioning their subconscious mind for massive success.

Alicia, is an internationally recognized business mindset expert, a best-selling author, coach, consultant, and a serial entrepreneur. Having worked with hundreds of private clients for well over a decade - from startups to owners of multimillion-dollar companies, Alicia has an intimate understanding of the mindset pitfalls that affect entrepreneurs. Her clients include successful business professionals, executives, and entrepreneurs who are driven to take their personal and professional success to the next level. 

She is the Author of: 

Hypnosis For Success;

The "Outside the Box" Entrepreneur; 

Co-Author of the International Best-Seller: Uncensored. Untamed. Unleashed. 

Alicia shares her journey into entrepreneurship, how she became a Business Mindset Mentor, and much more. 

Visit AC Intl LLC at aliciacramer.com , and reach out to Alicia at aliciacramer@outlook.com, www.linkedin.com/in/aliciacramer , and on twitter.com/aliciacramer.

 

_______________________________________________________

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

Courtesy Bias

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

Courtesy bias is a cognitive bias defined by Wikipedia as the tendency to give an opinion that is more socially correct than one's true opinion, so as to avoid offending anyone.

Courtesy bias arises when an investor tells the startup what they think the startup wants to hear rather than what the investor actually thinks.

The investor spares the feelings of the startup but in the process withholds feedback the startup needs to hear. 

Feedback should be candid and honest even if it’s not all positive.

If the feedback is all positive and nothing negative, it may be a sign that the investor is under courtesy bias.

Consider giving a more balanced view of the startup with both positive and negative feedback so the startup will learn from the experience and have something to work on.

Another form of courtesy bias is investors who hide their social, political, or other leanings.

For example, some investors believe that only those from their social or political circle are reliable investments but they call out some other facet of the startup for passing.

To overcome the courtesy bias, investors should take note of the deals they fund and identify factors swaying their decision.

 

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.

_______________________________________________________

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

Base Rate Fallacy

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

The base rate fallacy is a cognitive bias defined by Wikipedia as the tendency to ignore base rate information (generic, general information) and focus on specific information (information only pertaining to a certain case).

One-off sales to specific companies while helpful do not define the startup's growth forecast. 

Investors should look at the core systems of a startup to understand their acquisition, conversion, and revenue.

Consulting work and other non-recurring revenue models make it difficult to predict revenue.

Recurring revenue becomes a strong indicator of future revenue growth.

To overcome the base rate fallacy look for metrics across a broader range of customers and not select ones. 

The presence of metrics is a good sign.  

The absence of metrics is a bad sign.

Focus on recurring revenue metrics to understand the acquisition, activation, and retention rates.

Hockey stick projections should be avoided as it assumes something will occur outside the normal operations of the business to take the company’s revenue higher.

 

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.

_______________________________________________________

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

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.

_______________________________________________________

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

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.

_______________________________________________________

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

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.

_______________________________________________________

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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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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.

_______________________________________________________

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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.

_______________________________________________________

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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.

_______________________________________________________

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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.

_______________________________________________________

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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.

_______________________________________________________

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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.

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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.

_______________________________________________________

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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.

_______________________________________________________

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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.

_______________________________________________________

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

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.

_______________________________________________________

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Category:general -- posted at: 5:10am CST

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.

_______________________________________________________

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

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.

_______________________________________________________

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

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.

 

_______________________________________________________

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

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.

_______________________________________________________

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

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.

_______________________________________________________

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

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.

_______________________________________________________

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

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.

_______________________________________________________

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

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.

_______________________________________________________

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

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.

 

_______________________________________________________

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

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.

_______________________________________________________

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

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.

_______________________________________________________

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

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.

_______________________________________________________

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

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.

_______________________________________________________

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

Jobs To Be Done

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

Jobs to be done is a mental model in which you look at the customer's workflow to determine what they might need to complete their jobs.

This concept came from Clayton Christensen and provides insight into what product your startup should build.

It provides a framework for understanding customer needs.

As Henry Ford once said, if I had asked the customer what they wanted, they would have said "a faster horse".

To implement jobs to be done in your startup consider the following:

Start with the needs of the customer and what result they want.

Look at how they currently solve the problem including the unnamed competitor ‘do nothing.’

Look at competitors in other industries for potential solutions.

Determine the buying criteria of your customer and create a short list of the three most important points.

Consider the challenges in customer adoption for your proposed solution.

Estimate the value of your solution by asking how much time or money would your solution save the customer.

Consider viewing your customers and competitors through the jobs-to-be-done lens.

 

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.

_______________________________________________________

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

On this episode of Investor Connect, Hall welcomes Rob Matzkin, President and CEO at Rob Matzkin Entrepreneurship Group.

Located in New York, New York, USA, Rob Matzkin Entrepreneurship Group is specialized in coaching entrepreneurs to grow their businesses through innovation while generating power and momentum by finding true life balance and fulfillment. The 1-1 coaching sessions aim to create a clear vision, gain confidence, and change perspectives. 

Rob, is a Performance and Leadership Coach and a Ten-time Startup Founder with multiple successful exits, an angel investor, and a public speaker. Rob focuses on the mental, tactical, and strategic aspects of leading and growing a company. 

Rob has built a vast international network of partners, clients, companies & high-net-worth colleagues & continues to work diligently to create opportunity, & success through passionate service. 

Rob helps entrepreneurs exceed their businesses' goals while also living their dream life! 

Visit Rob Matzkin Entrepreneurship Group at www.robmatzkin.com, www.linkedin.com/company/entrepreneurship-coach.

Reach out to Rob at robmatzkin@gmail.com and ww.linkedin.com/in/rob-matzkin-06027634. 

_______________________________________________________

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

Circle of Competence

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

Circle of competence is the area in which one has a skill or expertise.

Tom Watson the founder of IBM once said, “I’m no genius.  I’m smart in spots and I stay around those spots.”

You don’t have to be an expert in everything to be successful.

You do need to know a specific area and where the limits are.

The founder needs to know their circle of competence and operate within it.

Those who move to a new industry may find it challenging as their expertise no longer matches the domain.

The more narrow the circle of competence, the deeper one can go into it.

Founders and investors should assess their skills, experience, and what gives them an edge.

Is the founder moving outside that area?  Will they have the same edge in the new domain?

Some of the best deals to fund are those where the team’s circle of competence covers the startup’s domain completely.

Investors reviewing a startup for investment should estimate the circle of competence of the founder. 

 

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 CST

Eisenhower Matrix

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

The Eisenhower Matrix is a mental model for prioritizing your time and tasks.

It puts the most important things ahead of what is often considered urgent.

Dwight D. Eisenhower was the Supreme Commander of the Allied Forces in Europe during WWII.

He was known for his ability to manage his time and the work to be done.

He noted that the most urgent decisions were rarely the most important ones to get done.

He mapped out decisions into the following matrix of urgent vs important.

Urgent and important -- items should be done immediately.

Important and not urgent -- require a plan for when they should be done.

Urgent but not important -- tasks should be delegated to someone else.

Not important and not urgent -- tasks that should be set for action later.

Startup founders should focus on the important things to get done as there is a great deal of work to be done in a startup.

You’ll need planning tools to manage all the tasks both those that need to be done now and those for later. 

Apply the Eisenhower matrix to your daily schedule to see how it improves your startup's progress.

 

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.

_______________________________________________________

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

Schlep Blindness

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

Schlep is a tedious or difficult journey.

Schlep's blindness is overlooking the obvious startup ideas as everyone is used to working in a current manner.

Most founders can’t see many ideas because of schlep blindness -- they know how hard it is so they don’t consider it. 

Look for ideas you want to be solved and then set out to solve them. 

It’s best to just start and work your way through it before common sense stops you.

The easy ideas are pursued by many and come with a great deal of competition.

The hard ones are pursued by fewer and have less competition.

A startup must undertake many schleps to succeed.

It’s the boring details that must be done.

Novice founders often take on these challenges because they don’t know what they are getting into.

Experienced founders avoid these ideas because they know the challenges ahead.

Startups should look for hairy, audacious goals to solve as those are more valuable.

 

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 CST

Power Law

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

The power law is a key mental model for venture investing. 

The power law states that the majority of the returns will come from just a few of the investments.

Similar to the Pareto principle, 20% of the deals will account for 80% of the returns.

In venture capital, the power law requires that each investment have the ability to pay back the entire fund as only a few will have outsized returns.

The returns from those winning investments will cover the losses from all the rest.

This is different from other investment classes which produce returns based on the normal distribution.

As an investor in the venture space, you must be willing to suffer many losses for only a few wins.

It can be hard to select upfront which ones will have outsized returns. 

Some use an index strategy to place investments trying to include as many deals as possible.

Once invested, it’s best to support all the companies in your investment portfolio.

 

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.

_______________________________________________________

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Direct download: Power_Law_.mp3
Category:general -- posted at: 5:00am CST

Total Addressable Market

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

The total addressable market is the size of the market that represents the total potential revenue for a product.  

This is the market that could ever buy the startup’s product.

In the startup world, there’s truly no limit to how big a company can grow.

Investors look for business opportunities with large upside potential.

Startups focus on large markets as it provides the most potential and the best chances for success.

Large markets provide many opportunities for entering the market and positioning within the market relative to competitors.

The larger the market the better chance of the startup finding product/market fit.

Within the total addressable market, there is the serviceable market which is the size of the market you can reach.

This does not mean the startup must actually reach the full market to be successful but rather it shows the opportunity.

Within the serviceable market, there is the beachhead market which is the first set of customers to pursue.

This gives the startup an area to focus on in entering the market.

The total addressable market is a mental model startups and investors use to assess business opportunities.

In raising funding, it’s important to know the size of the market and the segments before pursuing it.

 

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 CST

On this episode of Investor Connect, Hall welcomes Anshuman Gwal, managing partner at Brightside Partners.

Located in Toronto, Ontario - Canada, Brightside Partners is an early-stage VC fund investing in startups that improve the way consumers meet their day-to-day needs (retail, healthcare, education, etc. aka foundational Industries). They are launching a venture capital fund to invest in "Day-to-day Tech” (D2D tech - technologies that disrupt incumbents in foundational industries and improve the day-to-day life of an average North American). 

Their focus on Foundational industries is complementary to their established core competencies, network with industry-leading incumbents, and deal flow. They have already started sourcing and accelerating startups that are relevant to their thesis (from pre-Seed through Series A investments). They are planning to launch a fund of around $17M with this mandate in early 2023.

Ansh, is a strategic leader with over $200M in sales with fortune 500 companies and has managed relationships with large multinationals in Data and AI space. He is highly passionate about connecting with relevant accelerators, startups, and investors to capture their interests and focus areas. 

Ansh has managed large technology partnerships and teams across the globe with a strong network in emerging tech hubs such as India that startups value heavily to execute the ideas. He is also very active in influencing startups as a member of the Founders Institute and with various startup accelerator programs.

Ansh advises investors and fundraisers and provides seed funding for startups.

Visit Brightside Partners at www.thebrightsidepartners.com, www.linkedin.com/company/brightsidepartners, AND ON www.twitter.com/BrightsideViews

Reach out to Ansh at anshuman.gwal@thebrightsidepartners.com, or www.linkedin.com/in/agwal.

 

_______________________________________________________

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Direct download: Anshuman_Gwal_of_Brightside_Partners.mp3
Category:general -- posted at: 5:00am CST

Flywheel Effect

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

The flywheel concept comes from the industrial world in which a large mechanical flywheel gains momentum from small steps and eventually creates enough momentum to generate its own motion.

In the startup world, the flywheel effect refers to an alternative to the sales funnel by building a growth machine by connecting strategy with incremental steps in building customer loyalty.

Growth comes from satisfied customers who continue to use the product and tell others about it.

The flywheel effect generates exponential growth.

To create the flywheel effect, the startup should seek ideal customers and not just any customer. 

For startup founders choose your customers carefully and leverage them to find more.  

Set up a strategy for acquiring customers, keeping customers, optimizing your profit, and generating new customers from your existing ones.

Use the hedgehog principle which states a company should understand what it can be great at and not just set a goal for it.

Companies achieving greatness most often have a flywheel effect in place. 

 

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: Flywheel_effect.mp3
Category:general -- posted at: 5:00am CST

Agile Development

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

Agile development takes an iterative approach to building software.

Instead of one monolithic development, agile proposes incremental changes.

Agile is a useful mental model in the startup world as it fits well with the startup dynamic.

Startups use agile development as they are still learning about customer requirements.

As the customer base expands the startup finds new requirements to build.

The startup is always reviewing the customer requirements and implementing them on a step-by-step basis.

This approach also allows for developers to learn new ways of building the software and improving the process as they go.

The development team using agile is organized with cross-functional groups and re-organizes continually throughout the project.

Instead of focusing on a fixed set of requirements to be met, the agile team focuses on the customer base through user stories and personas.

User stories show how the startup's product fits into the user's workflow.

Personas show how different types of customers use the product in different ways.

Projects are planned in stages and tracked using milestones.

Agile is the primary mental model for product development in the startup world. 

 

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: Agile_development.mp3
Category:general -- posted at: 5:00am CST

First and Last Mover Advantage

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

In startup markets, there are advantages to being the first mover and advantages to being the last mover.

Here are some advantages of being a first mover:

The first mover in a market can gain market share due to the lack of competitors.

The first mover can gain branding and mindshare with the customer base.

The first mover has more time to build out their product and reduce their costs.

The first mover has an advantage over other companies who will be seen as “me-too” competitors.

Here are some advantages of being the last mover:

The last mover may have an advantage by adopting the latest technology and business models.

The early entrants often lock into older technologies and must spend substantial resources educating the market.

The last mover reduces their costs by copying product concepts and business models rather than inventing them from scratch.

Consider your startup's approach to an emerging market and choose your entry point based on your company strategy.

 

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_and_Last_Mover_Advantage.mp3
Category:general -- posted at: 5:00am CST

AARRR

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

AARRR stands for Acquisition, Activation, Retention, Referral, and Revenue

It’s the mental model for the customer lifecycle.

In growing sales this model breaks down the process into stages and steps which the startup can metric as follows:

Acquisition --  find users through multiple channels

Activation --  excite customers with your product 

Retention --  bring the customers back to your site several times

Referral --  generate word of mouth buzz to bring others to the site

Revenue -- monetize some of the users

Acquisition can be through social media, email, content marketing, or other.

Activation can be a user coming to a landing page on the website.

Retention can be engagement through email or interactions with a blog.

Referrals can be others coming to the website based on word of mouth.

Revenue comes from advertising, monetizing data, or subscription services.

This is the standard playbook for tech startups.

 

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: AARRR.mp3
Category:general -- posted at: 5:00am CST

Inversion Mental Model

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

The inversion mental model generates new startup ideas by inverting the problem.

By looking at the problem in reverse you can ideate new product solutions and business models.

This technique tests the assumptions and gives us a new way of thinking.

For example, instead of asking "how can we build the best product". 

Invert the question and ask "how can we build the worst product".

Then ideate on what would make the product the worst.

With a list of ‘worst product’ ideas invert back to the original question on how to make the best product.

Inversion also works in identifying new business models.  

For example, instead of a vendor selling a product online by listing a price. 

Invert the model and have the buyers bid on the product.

This turns the transaction into an auction model.

You then test the model with customers to see if it resonates with them.

Inversion is a powerful mental model for startups to ideate new products and business models. 

 

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 CST

On this episode of Investor Connect, Hall welcomes Christian Napier, Founder / CEO at Rakonto Inc.

Located in Sandy, Utah, Rakonto Inc. provides a platform that allows organizations to harvest contextual or tacit knowledge, through simply talking. They remove the friction inherent in the process of requesting, recording, receiving, transcribing, transforming, curating, and sharing tacit knowledge, experiences, and stories.

Ultimately, the human family is built on relationships, and they help build bonds by enabling people to connect through stories - recorded on video and automatically transcribed - shared on the platform.

Christian, is the Founder and CEO of Rakonto. He has more than 28 years of experience in technology, knowledge, and learning, with more than two decades working in Olympic Games and major sports events.

Since 2015, Christian has served as the International Olympic Committee's knowledge management advisor. In this capacity he has interviewed more than 1,500 people responsible for organizing the Olympic and Paralympic Games in Rio de Janeiro, PyeongChang, Tokyo, Beijing, Paris, Milan, and Los Angeles, compiling what may be considered the largest oral history of the Games.

Christian helps people and organizations build community, connection, and understanding through simply talking.

Visit Rakonto Inc. at rakonto.io, www.linkedin.com/company/rakonto, and on twitter.com/Rakonto_io.   

Reach out to Christian at christian@rakonto.io, and on LinkedIn at www.linkedin.com/in/christiannapier

_______________________________________________________

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Direct download: Christian_Napier_of_Rakonto_Inc.mp3
Category:general -- posted at: 5:00am CST

Earned Secret

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

The earned secret mental model postulates that you should have some information that most others don’t before launching a startup.

The earned secret gives you an edge over other startups through a key insight into the customer or industry.

Those outside an industry have little or no insight into it.

Insight comes to those who work in the industry and test the assumptions and boundaries.

Here are some key points to consider about your earned secret:

Think through your view of an industry and think about what insight you may have.

What do you know that others don’t know?

For any insights consider how many others may know it.

Is it counterintuitive? Is it non-obvious?  

Has the market changed over time and it is now the norm?

How did you find this earned secret? 

Were you working in a niche in the industry? 

Will the earned secret apply to the rest of the industry or even outside the industry?

Test your earned secret to see if it can be monetized.

Most successful startups have some angle into the market that comes with a unique perspective.

 

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: Earned_secret.mp3
Category:general -- posted at: 5:00am CST

Minimum Viable Product Mental Model

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

The minimum viable product called MVP tests the market before building the final product.

The MVP is designed to gain customer feedback and show market validation to the investor.

It tests the riskiest assumptions with small experimental products.

The MVP is not an early version of your go-to market product but can take many forms.

There can be more than one MVP as the startup should always be testing the market and customer reactions.

While asking customers what they want is a useful step, giving the customer a product to use elicits much deeper feedback.

Most MVPs start as mockups of the application proposed to prospective customers.

If the feedback is positive a small version of the product is built and tested with prospective customers to see if and how they would use it.

A key test of an MVP is will the customer pay for it.

It’s important to charge for one of the MVP products to test a customer’s willingness to pay.

MVPs can be landing pages, one-function mobile applications, a crowdfunding campaign, or others.

Each one is designed to test the interest of the customer and how to engage them.

The MVP is an ongoing process and not a one-time test.

 

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: Minimum_viable_product_mental_model.mp3
Category:general -- posted at: 5:00am CST

Product Market Fit Mental Model

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

Product market fit is a mental model that demonstrates your product meets the market's requirements.  

It’s a key milestone in the journey of the startup as it’s the point of inflection for growth and later scale.

Without product market fit the startup will most likely fail.

A startup has achieved product market fit when demand outweighs the supply. 

In other words, customers demand your product faster than you can provide it and you know why they want it.

When you achieve product-market fit customers are spreading the word about your company.

If you stop providing your product your customers have a real problem.

When you don’t yet have product market fit you can change the product, the market, the team, or the value proposition.

Scaling before achieving product market leads to failure as you’re increasing your costs before you have your revenue growth machine in place.

Achieving product market fit is the primary goal of the early-stage 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: Product-market_fit_mental_model.mp3
Category:general -- posted at: 5:00am CST

The Idea Maze

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

The idea maze is a mental model for how a founder sorts through the plethora of ideas to find the right one on which to build a startup.

There are many choices including the problem to solve, product to build, and how to monetize.

In navigating the idea maze for your startup consider these points:

Know the industry well enough to know what ideas have worked and what did not.

One learns more from the failures than the successes.

Borrow from other industries to apply to the sector you are pursuing.

There are more good models to draw from outside your target sector.

Work in the industry to learn more about the current structure.

There you will find experts that can give you feedback on your ideas.

Identify the core challenge to solve.

Make the core problem your central focus then walk through the various ideas to test them.

Watch for disruptions in the industry from the market, technology, or other.

Disruptions provide a new set of ideas to apply.

Map out the idea maze for your next startup to see how many possible solutions exist.

 

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: The_idea_maze.mp3
Category:general -- posted at: 5:00am CST

The Babe Ruth Effect

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

The Babe Ruth effect mental model comes from Babe Ruth who once said:

I swing big, with everything I’ve got. I hit big or I miss big.”

The mental model postulates that it’s better to take big risks than to avoid failure.

Eventually, the big risks will pay off and will outweigh the failures.

In investing, venture capitalists follow the Babe Ruth effect by betting big and then ignoring the ones that didn’t make it.

To pursue the Babe Ruth effect as an investor consider the following:

Find sources of quality deal flow.

There’s no shortage of deals, but there is a finite number of quality deals.

Setup a process for diligence and deal negotiations.

It’s a process that you will repeat many times so set it up for efficiency.

Startup success rates tell us only one in ten will be a home run. 

Prepare yourself mentally to lose on seven to nine deals out of every ten.

Invest with others to share the deal flow and diligence.

It takes substantial work to fund and then support a deal so don’t go it alone. 

The Babe Ruth effect tells you to focus on maximizing the upside and not just mitigating the downside.

 

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: The_Babe_Ruth_effect.mp3
Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes Justin Izzo, Lead Data and Trends Analyst at Dropbox DocSend.

Located in San Francisco, California, Dropbox DocSend enables companies to share business-critical documents with ease and get real-time actionable feedback. With DocSend's security and control, startup founders, investors, executives, and business development professionals can build business partnerships that have a lasting impact. Over 30,000 customers of all sizes use DocSend today.

Dropbox is the one place to keep life organized and keep work moving. With more than 700 million registered users across 180 countries, they are on a mission to design a more enlightened way of working. 

Justin is a trusted insight professional with 15 years of research and leadership experience. He is a passionate data-driven researcher who uses deep analysis, persuasive writing, and interdisciplinary skills to find new opportunities, discover unexpected connections and tackle organizational challenges.

Justin conducts research experience, including applied research, for example: Focus groups, participant observation, structured and semi-structured interviews, ethnography, narrative strategies, cultural studies, and content analysis. He attended Duke University and holds a Ph.D. in Literature and a MA in Cultural Anthropology. Justin also attended New York University for his Bachelor of Arts in French Language and Literature.

Justin helps folks how to prepare pitch decks and fundraise, using fundraising surveys and pitch deck data. 

Visit Dropbox DocSend at www.docsend.com and on Twitter at twitter.com/docsend.

Reach out to Justin at justinizzo@dropbox.com, and on LinkedIn at  www.linkedin.com/in/justin-izzo.

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

Regret Minimization

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

The regret minimization mental model helps you make difficult decisions by projecting yourself into the future and looking back on the decision to be made.

Jeff Bezos once said, 

“I knew that when I was 80 I was not going to regret having tried this.”

Today you are your present self.

Tomorrow you are going to be your future self.  

The key to practicing regret minimization is to project into your future self.

This helps you make difficult decisions by placing yourself into that future situation.

For example, if you have a challenging task to do today, you can ask your present self what you want to do.

Your present self will say do it tomorrow.

If you ask your future self what you want to do, then you’ll say, do it today.

Consider how your future self will make a decision in addition to your present self. 

 

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.

_______________________________________________________

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

Disruptive Innovation

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

The disruptive innovation mental model describes a simple innovation starting at the bottom of a market and then moves up the curve to overcome the industry incumbents.

This mental model was first defined by Clayton Christensen in his book The Innovator's Dilemma.

Industries with expensive products are overtaken by companies operating in overlooked sectors but through innovation overtake the industry.

The personal computer is an example of disruptive innovation.

It started out as a basic machine that provided only simple solutions.  

The more expensive mini computers and mainframes were too expensive for non-business applications.

It was used for gaming when there were no business software applications available.

Over time, the personal computer grew in performance and took on business use cases.

It was lower cost and more available to the average person and small business. 

Disruptive innovations make products more affordable and available to a wider range of users.

Consider using disruptive innovation to launch your product or service.

 

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.

_______________________________________________________

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

The Why Now

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

"The why now" mental model builds the case that now is the right time to launch and raise funding for a startup.

Timing is key to a successful startup launch.

Launch too soon and the market won’t be there.

Launch too late and the competition will be too far out in front of you.

Here are some key steps to use the "why now" in your fundraising pitch.

Point out key metrics from legitimate sources about changes in the market.

Confirm those trends are happening now with your personal observations.

Cite quotes from others verifying the trends.

Show how your startup will take advantage of those changes.

Articulate three reasons why your startup is best positioned to win.

Call out the opportunity to be achieved and use numbers to quantify it.

The 'why now’ mental model shows now is the best time to start a business.

It gives immediacy to the fundraising pitch.

 

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.

_______________________________________________________

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

Introduction to Mental Models

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

A mental model according to Wikipedia is “an explanation of someone’s thought process about how something works in the real world".  

It is a representation of the surrounding world, the relationships between its various parts, and a person’s intuitive perception about their own acts and their consequences.”

Mental models help solve problems and simplify complex situations.

An extensive list of mental models gives one an edge in competing in the startup world. 

Mental models provide additional tools for understanding startup challenges such as raising funding, developing products, managing the team, and closing customers.

Many mental models help frame the problem in a way that makes the answer clear.

The startup world brings many mental models for founders and investors to consider.

The more mental models you have, the stronger your management skills.

Mental models are not included in formal education programs.

You find them in the writings of experienced founders and investors.

These founders and investors developed mental models after solving the same problem over and again.

The more you can learn these mental models, the fewer mistakes you’ll make. 

 

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.

_______________________________________________________

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

Product Roadmaps

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

The product roadmap is a shared resource that outlines the vision, priorities, and direction of a product over time.

It aligns the goals of the company to deliver the product and sets the expectations of the customer.

The first product is the minimum viable product and sets the starting point for the product roadmap.

Each version thereafter builds on what came before.

Each version of the product should have a primary theme.

This could be solving a product for a type of buyer. 

This could be adding a major new capability that all customers can use.

Product roadmaps are driven by revenue generation priorities.

Which feature set will generate the most revenue.

Product roadmaps are also used as a competitive advantage by providing features that others do not have.

Each themed version of the product will come with a series of features and benefits.

This provides a technical list of features to implement.

Many customers don’t buy the product for the current version but rather for the product roadmap it brings.

This can become a selling point to larger customers if they have visibility into the roadmap.

Use product roadmaps not only as a tool to organize your development teams but also as a tool to close customers. 

 

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.

_______________________________________________________

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

This is the Investor Connect Hot Topics program.

I am Hall Martin, the host of the show in which we dive into current topics and how it impacts the startup space.

I hope you enjoy this episode.

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Thank you for joining us for the TEN Capital  Hot Topics Program where we dive into current topics and how it impacts the startup space.

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Pre-seed Product Work

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

The minimum viable product is one of the more challenging products to design.

There are many choices and limited resources available.

In designing your MVP consider the following:

Scope into your core technology in building out the first version.

Eliminate as much of the surrounding building as possible.

Take a specific use case and focus on solving that alone.

Focus on learning the customer’s problem.

Consider as many implementation options as possible.

Don’t set your heart on a particular implementation of the product.  

In general, the MVP will not be your first product but will lead you to it.

Set a deadline for finalizing the design and then set a deadline for building it.

The deadline should be in weeks and months and not quarters or years.

Try and sell it before you build it.

Build it without raising funding and save the fundraise for the final product.

In addition to building the MVP, build an ideal customer profile for the first version of the product.

Think minimum utility, not maximum capability.

 

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.

_______________________________________________________

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

Product Reporting

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

It’s important to track the key metrics for your product.

Here’s a list of numbers to capture:

Customer acquisition cost -- the cost to acquire a customer.

Customer lifetime value -- the total revenue received from each customer on average.

Churn rate -- the percentage of customers dropping out each month.

Conversion rate -- the percent of customers that convert from a lead each month.

Unit sales per month - the number of total units sold each month and tracked over a six-month period.

Active users -- the number of daily and monthly active users per product.

Cost to build -- the cost to build and deliver each product.  

Gross margin per product -- the percentage of revenue after subtracting the cost to build.

Cohort analysis -- the performance of the product after making specific changes.  This is often used in A/B testing.

Cost to develop -- the cost and time it takes to create a new product.

It’s important to track this for each product to understand the contribution of the product to profitability.

It also helps in budgeting and forecasting new product development. 

 

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.

_______________________________________________________

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

Product Usage Metrics

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

Metrics are a key tool in product management.

In managing a product track these metrics:

Customer acquisition -- track the performance of the product in acquiring new customers.

This is often done broadly across all products but should be done by each product as well.

Customer adoption -- track the performance of the product during the customer onboarding process.

This is the conversion rate and demonstrates how well the product was designed for customer usage.

Customer engagement -- track the performance of the product in how often the customer uses it.

This could be daily, weekly, or monthly.

Customer satisfaction -- track the performance of the product in generating happy customers.

This tracks retention and churn rates and highlights areas for improvement.

Revenue and profitability -- track the financial performance of the product.

This includes both how much revenue it generates for the company as well as the profitability.

 

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.

_______________________________________________________

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

Product Development Process

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

There are many approaches to product development.

Here are some approaches companies use:

Defines the ideal process. This lets the process work out from project to project. 

Systematizes development activities. The core systems are made available to the team to use as they like.

Focus on the customer and their needs. They align their systems to customer requirements.

Outlines the team’s duties and responsibilities.  This provides a functional overview of how each team member works.

These approaches are built into well-known models such as the Scorecard-Markov model which assigns a score to new ideas and prioritizes development accordingly.

The IDEO process emphasizes the customer's needs and focuses on form, fit, and function.

The BAH model provides a set of steps for product development as follows: strategy, idea generation, screening, analysis, development, testing, and commercialization.

The Stage-Gate model funnels product development through a series of phases as follows:  generating ideas, screening, testing the concept, business case analysis, product development, market testing, commercialization, and launch.

There are a variety of approaches to setting up product development and executing it.

 

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.

_______________________________________________________

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Direct download: Product_Development_Process.mp3
Category:general -- posted at: 5:00am CST

Gamification of the Product

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

In designing your product consider adding gamification to it.

Here are some key elements to consider:

Include goals for the user to accomplish with the product.

This makes it engaging for the customer.

It also provides a benchmark on how much the customer uses the product.

Provide control over the product so that the customer can customize it.

This generates more ownership as the customer can configure their own workspace.

Design the product so the work flows easily from one step to the next.

This generates flow which provides a more engaging environment for the customer.

Consider adding avatars that customers can use to personalize the product.

By generating unique identities the product fosters community among the users.

Setup levels in the product so novice users can find it easy to work with while experienced users can find more capabilities.

This customizes the product for the experience level of the user. 

Finally, try and make the product fun to use as the customer will look forward to working with it. 

Consider adding these elements into your product design.

 

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.

_______________________________________________________

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

User Experience Design

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

The user experience of the product must be designed into the product from the beginning.

Here are some key points in researching the user experience:

Understand the user’s goal and what they are trying to achieve.

The user may be trying to generate a report or store key information, or analyze data.

Identify the user’s challenge in accomplishing the goal.

The user may be trying to use multiple tools to solve a problem of which you’re one tool.

Understand what part of the problem they are trying to solve with your solution.

The user may have many steps to complete the process.

Understand how your solution fits into the user's workflow and what comes before and after your step.

The user must move from one tool to the next to solve the problem so your tool needs to fit into the workflow.

Understand the user's constraints.

The user may not have all the information they need to solve the problem fully but can solve it if they have key information.

Understand the user's preferences.

The user may prefer one method over the other so you can design the product in that direction.

Design the product with these issues in mind to provide the best solution possible.

 

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.

_______________________________________________________

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

Product Data

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

Product data is the information about the product used for product management purposes.

Here are some key data points to capture and maintain:

Customer tests for new product features.

Capture A/B test data into a central repository as the answers may be useful for building future features.

Key metrics such as customer engagement and satisfaction rates.

Keep a running list of KPIs about your product for product decisions and business strategy.

Feature usage measures how customers use the product.

Track which features customers use most often and least often.

Customer sign-ups track who joins to use the product.

Keep track of client signups to understand what they expect to gain from the product.

The churn rate tracks those who stop using the product.

Keep track of client departures to understand why they left to build an ideal customer profile.

Cost to build the product.

By tracking the cost to build you can make future product development decisions easier to forecast and budget.

Capture all product data into a central location for future product planning and strategy sessions.

 

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.

_______________________________________________________

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

Product Development Priorities

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

There are many features to add to a product and never enough resources to do all of them.

Consider these points in prioritizing your product development:

Look for lost sales to find high-priority features to work on.

Focus product development on customer requests.

Look at how the customer is solving their problem now with your product for potential features that would be helpful.

Test the customer’s desire for a feature by charging for it and then see who actually pays for it.

Investigate customer complaints about a missing feature before committing resources to it. 

Not every new feature will turn into a big jump in revenue, but collectively they can give the startup a competitive edge.

Avoid copying competitors and stay focused on your customer audience.

Don’t bet the entire startup on a single product launch.

Instead, roll out the features serially and test the customer’s response. 

In product development start with small steps and build out the product incrementally.

It’s best to underpromise and overdeliver. 

 

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.

_______________________________________________________

Thank you for joining your host Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

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

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

On this episode of Investor Connect, Hall welcomes Yao Huang, Managing Partner at Division One Capital.

Located in Seattle, Washington, Division One Capital is a fund that provides capital to minority-owned businesses so they can grow and realize their potential. They exist to help minority communities, their people, and businesses prosper.

Every business, company, or brand needs capital in order to grow steadily and have a shot at reaching their highest ambitions, but the discriminatory system has created a gap of disadvantage for minorities. Division One Capital’s fund aims to fill that gap through non-discriminatory funding.

Yao is an investor and tech veteran with two decades of experience in technology, partnerships, and investing. She has founded companies, helped corporations launch new innovation initiatives, and venture partner in 2 funds. She leads a 16-year network of 10,000 women across 30 cities touching every corporation. She believes in minorities' and women’s access to capital in fairways and works to increase those funds in different ways.

Yao was named by Forbes as one of eleven women at the center of New York’s digital scene, by Beta Beat as one of 25 Women Driving New York’s Tech Scene, and TechWeek’s 100 most influential people in tech. She was part of the U.S. State Department Global Entrepreneurship Program Delegations in bringing entrepreneurship and initiatives to strategic countries.

Yao is a sought-after speaker in areas of building internet companies, technology, big data, innovation, and entrepreneurship. Yao and her efforts have been featured in Fortune, INC Magazine, Reuters, Daily News, Red Herring, Crains, American Venture, and TED. She is on the board of Carbon Optimum, a carbon sequestering company removing carbon and methane from polluting cement, oil, and gas plants. She has a particular passion for climate solutions to save the planet as well as helping entrepreneurs, women, and social causes with projects in place to build global communities, and push more women into executive positions. 

Yao shares what excites her now, advises startups and investors, and discusses some of the challenges associated with putting together the fund.

Visit Division One Capital at www.divisiononecapital.com; www.linkedin.com/company/division-one-capital/

Visit Yao at yao@divisiononepartner.com, yao@hatcheryny.com, and on LinkedIn at www.linkedin.com/in/yaohui;

_______________________________________________________

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

MVP Mistakes

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

In developing a minimal viable product avoid these mistakes:

Trying to create your vision fully in the MVP.

The MVP will be a greatly reduced version of the envisioned product.

Taking customer feedback literally.

Customers will provide feedback and ask for specific features.  

In building a product you must look at the bigger picture to see what problems you solve and what problems you don’t solve.

Overbuilding the MVP.

The MVP should be simple to install and use and should not require extensive support to engage users.

Using the MVP as the basis for the final product.

The MVP provides feedback from which you rethink the entire product including the form factor, features, and even what problem you solve.

Building just one MVP.

The more MVPs you can build and test the more you will find the right mix of features, pricing, and form factor.

Avoid these mistakes in building your minimum viable 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 

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

Product Features

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

The features of your product will determine your competitive position in the market. 

For any market, there is a baseline set of features that customers will expect.

To enter the market your product must provide these basic services.

To beat the competition your product must have differentiation features.

Differentiation features distinguish your product from the competition.

This gives the customer a reason to choose your product over competitors.

Customers will demand the basic features and their performance.

It is up to the founder to drive the development of the differentiation features.

Your sales team will push for basic features and their performance to close current customers.

Your current customer will drive the basic feature set for their own needs.

You must drive the differentiation feature set for new markets.

 

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.

Music courtesy of Bensound.

Direct download: Product_features.mp3
Category:general -- posted at: 5:00am CST