austinpreneur

Listening but not paying attention

I've been presenting a talk titled, "Complainers into Champions" lately that gives examples of why many companies can benefit from using social media to engage with customers and talk about their problems in public. I'm usually pushing companies to engage more, listen more, respond more.

However, I recently had a personal experience where a company was listening to social media, but wasn't really paying attention - and it cost them. A tweet that I sent was taken out of context and a big company spent hundreds, if not thousands of dollars investigating it. Bryan Menell also talked about my experience on the Dachis Group Blog.

It all started with a phone call to my cell phone. This was strange to begin with, because I use Google Voice and I don't give out my cell phone number to anyone. I was immediately suspicious and figured that it was some kind of strange solicitation. Here my best recollection of the conversation:

Caller: "Is this Joshua Baer?"

Me: "Who's calling?"

Caller: "Enrico XXXX"

Me: "Who are you with?"

Caller: "Bose Security"

Me: "What's this regarding?"

Caller: "It's a personal matter."

Me: "You're going to have to give me more information than that."

Caller: "Is this Josh? It's regarding your business selling stolen Bose headphones."

Me: "This is Josh. I'm not sure what you're referring to. What makes you think that?"

Caller: "I'm looking at a Twitter message that says, 'joshuabaer @jotto I've actually got a side business moving hot bose headphones'. Did you send that?"

 

Me: "I didn't say that. It must be some kind of mistake... Oh wait a minute. I think this was part of a joke. I was selling some used headphones on Facebook and my friend said that as a joke. I think if you look at the tweets before and after that it will be pretty obvious that its a joke."

Me: "Look, I'm a big fan of your products and just got the latest version. I was selling two old pair."

Caller: "Do you know where you purchased the two headphones?"

Me: "Not really, it was a long time ago. I probably bought them directly from you, or maybe from Amazon. Come to think of it one of them was my wife's so I have no idea where she purchased it."

Caller: "Are you sure?"

Me: "No, I just told you I'm not really sure because it was a long time ago. I was really just selling my used ones on Facebook."

Caller: "I know, we bought a pair from you."

Me: (laughing) "Are you serious? That's hilarious! So you know it wasn't stolen then."

Caller: "Well we can't verify that. I need to know where you purchased them." 

Me: "Look, I wish you the best and must admit that I'm kind of impressed that you're paying attention to Twitter, but this is a waste of your time."

Caller: "Well we're going to continue to investigate this. Is this the best number to reach you at if I have further questions?"

Then we exchanged contact info.

So basically, Bose Security was watching Twitter and took this one tweet out of context. They spent at least $165 so far (that's how much they paid me when they bought the headphones) and have spent many hours researching it, tracking down my number, calling me, etc.

If they had looked at my Twitter page and just seen the tweets sent around the same time, I think they should have been able to tell it was a joke.

 

How much did this cost Bose? At least $165. Assuming that they spend a few hours researching it, we're probably looking at hundreds of dollars if not more! 

Here is the original Facebook post in the marketplace:

 

Mission: Austinpreneur on assignment in Puerto Rico

    

Earlier this month I was fortunate and flattered to be invited to keynote the Puerto Rico Venture Forum in San Juan, Puerto Rico. This was my first trip to Puerto Rico but it definitely won't be my last. My wife Amy came along for the trip and we got to spend a day exploring through the forts of Old San Juan. It was such an easy trip - no passport, everyone speaks English, and they use dollars for money. Gowalla was already there too - most of the places I visited were already listed and one of the old forts even has a custom stamp! On our next trip we want to explore the bio-illuminescent algae, caves, mountains, beaches.

 

I want to thank Grupo Guayacan and all of the great people we met - everyone was so welcoming! Special thanks to Francisco, Bob, Eva, Joanna, Paul many others. And of course thank you to Manuel Rosso for introducing me!

The Puerto Rico Venture Forum is the culmination of the EnterPRize competition - a business plan competition that on its face looks very similar to Capital Factory. They have a longer process that starts with a business plan competition and extends over the course of a year or more. There are five finalists each year and the top 3 receive $25k, $15k, and $10k in addition to other free services and mentorship.

I was very impressed with the Puerto Rico startup scene. The community is highly educated, with expertise in biotech, aerospace, manufacturing, and more. I met a dozen young entrepreneurs and many of the elders of the community as well. The energy and enthusiasm was infectious!

The five finalists that presented were:

• Adiestrate.com - Online Learning Classes
• Edunarium - Online Learning Store
• EMM - Simulations for Unmanned Aerial Vehicles
• NanoEssentials - Nanoparticle production
• Sonar Sending Technologies - Medical device for improving catheters

Unfortunately, none of the five really got my juices flowing. All of them had interesting ideas and viable businesses, they just weren't in my areas of expertise or interest. I wish there had been an email marketing company! Still i was impressed by what I saw and wish all of the companies the best in their entrepreneurial journey.

 

 

Angel Investor Panel moderated by Frank Peters

Frank Peters of the Tech Coast Angels led a fun and informative panel of angel investors with Mic Williams of the Boston Harbor Angels and Christian Meade from a Mexican angel investor group. Here are some of the best quotes from Twitter: 

"Don't tell me what the rate of return will be, tell me who your potential acquirers are" - Frank Peters

"Investors want NO risk, high return" - Mic Williams

"Investors want to give you money once you don't need the investment anymore." - Frank Peters

"New angel investors should 'just watch' for 6 months before investing. At the start, every deal looks good!" - Frank Peters

I definitely plan on checking out the Frank Peters Show podcast about startups and angel investing.

Corporate Venture Capital with Blake Modersitski

Next we heard Blake Modersitski speak about corporate venture capital. For a while he ran the venture capital group at Novell (reporting to Eric Schmidt, who is now CEO of Google) and now he's with UV Partners. 

Blake warned to "be careful about taking a high valuation early on [from a strategic investor who might be less valuation focused], it can make it harder to raise more money later." 

He also cautioned that "if you're taking venture capital from a company, cut your business deal first because it can be harder to do it after." 

 

From Bootstrapping to Venture Capital with Brian Halligan

My favorite talk of the day was probably Brian Halligan from Hubspot. He had great content but also a fun and engaging delivery. Many of his points resonated well with the Startup Lessons portion of my keynote that followed. 

Brian presented an interesting equation to illustrate just how hard it is to get funded by a VC. Most VC's require up to 8 meetings to a termsheet, and at each step of the way it just takes one "No" to eject you out of the process. He gave most people a 50/50 shot at each step, which leads to the following formula:

    F(VC) = 1/2 x 1/2 x 1/2 x 1/2 x 1/2 x 1/2 x 1/2 x 1/2 
    F(VC) = about 1 in 200 = 1/2 of one percent

I don't think he was trying to be exact, but more just to show how the process works and how easy it is to get a "No" somewhere along the way.

Some of my favorite quotes from Brian's talk:

• "Syndication is bad for founders - it's better to make the VC's compete"
• "Build it or sell it: you only need 2 founders for your startup"
• "Series A is about founders, Series B is about market, Series C is about business model"
• "don't bootstrap by just writing checks from your bank account, instead you should invest with a convertible note" 

Keynote - Mission: Austinpreneur by Joshua Baer

My keynote was the conclusion of the event and I presented over lunch in a beautiful room overlooking the sea. I talked about my passion for entrepreneurship and the companies that I've started, described Capital Factory 2009, and shared some Startup Lessons I've learned along the way. I wasn't able to record the whole thing but I have 20 minutes that tell my story from my first dorm-room dotcom in 1999 to the founding of Capital Factory.

I'm hoping to be invited back next year. I would love to come early and help the companies to prepare their pitches.

Keep your eye on Puerto Rico

Some of the entrepreurs that I talked to said that they often are discouraged from pursuing entrepreneurship - they are told that it would be better to get a safe government job. I think they just need some success stories to point at. And with them, more successful entrepreneurs as mentors. Fortunately there seems to be a strong sense of loyalty to the homeland - many of the people I met were born in Puerto Rico, went to school or a job in the US, and then came back to Puerto Rico. And I could see that they are bringing back more and more of the entrepreneurial spirit.

Overall I was very impressed with the entrepreneurial community in Puerto Rico. It's small but passionate. It's just going to get easier and easier for startups in Puerto Rico. The same forces that made "$500,000 the new $5,000,000" will soon make $5,000 the new $500,000. As the cost of starting new companies drops capital will no longer be a limiting factor.

Here are the complete slides from my keynote:

It's evolution - physical signatures need to evolve or die

 

In general I think that physical signatures are archaic and not that meaningful. It's not impossible to forge a physical signature by hand and its even easier with computers. More and more documents are made into PDF's so you end up with digital copies of your signature being sent around in insecure emails. 

This is about evolution and survival of the fittest. Physical signatures are slow, stupid and ugly and they should get eaten by the digital signatures. 

 Here are some things to consider:

• Have you ever sent signature pages for a contract without the rest of the pages?
• Do you regularly compare (using "Find Differences" in Microsoft Word) the "final version" of a contract against the redline version to make sure its correct?
• Do you regularly initial every page of a contract, in addition to signing the signature page?
• Do you have a scanned copy of your signature that you just cut and paste onto digital contracts? 
• Do you use a convenient service like Zosh to save time executing PDF agreements by email?
• Do you always get back the countersigned document with BOTH signatures on it?

How hard would it be for someone to take your signature off of one document and cut and paste it onto another one? How hard would it be for someone to take a 10 page contract with your signature on it and swap out one of the pages in the middle with different terms.

Even worse, many people these days just sign the signature pages and send them separately from the rest of the pages. At that point, the other party can attach whatever they want to the beginning of it.

And it doesn't have to be a malicous act. What if someone just sends you the wrong final contract to sign. Would you notice? What if they send an old version by accident?

I know what you're thinking... I'm being paranoid. No one does stuff like this right? I must admit that no one has ever done anything like this to me before. However, if you put any faith in physically signing a document to begin with, I think these are all reasonable concerns. 

So here is how I sign contracts:

1. Compare the final version to the last redline that I approved to make sure I'm signing the same document I think I am.
2. Initial the bottom of every page of the document (except the signature page). If a page has blank space, initial at the end of the text not at the bottom of the page.
3. Always send the entire document, never just the signature pages. At least this way I have record of the fax or email with all of the pages together in one place so I can prove what I signed.
4. When I send my signed contract, I create a reminder to make sure I receive my countersigned copy.

EXCEPTION: If I'm working with two lawfirms (mine and the opposing counsel) and they are handling all of the paperwork then I expect them to be responsible for most of the process I outline above. In those cases I'm comfortable signing only the signature pages and putting them with the lawyers "in escrow" until we agree on the final document.

How long will it take for physical signatures to go away? They really are an archaic legacy of the pre-digital age. A signed document doesn't "prove" much it just makes us feel good. It helps to avoid confusion by making it clear what copy of the document is the final one. There are better ways to handle this today, such as digital signatures and other forms of authentication. However, they are still "geeky" tools that haven't hit the mainstream. 

Companies like EchoSign are paving the way for a more secure and more efficient way to execute documents and its slowly taking on. Recently I signed an NDA with Microsoft using a fully digital signature process and so I'm optimistic that over the next 5 to 10 years we will see most large businesses moving away from physical signatures and towards something like Echosign's model.

How do you sign contracts? Do you take any other precautions besides the ones I list here?