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How to Run a Board Meeting: The Slide Deck

A few weeks ago, I blogged about my first board meeting as a CEO of a venture backed company. The response to the blog post was great and I received a few emails asking me to share more details. In that sense, I decided to put together a template of the slide deck I am using during board meetings.

The purpose of the board package slide deck is to provide a clear summary of the current state of the company including the major milestones achieved and challenges faced since the previous board meeting. CEOs should use the slide deck as the main vehicle to drive the discussions during the board meeting and it should be structured in a way that prevents unnecessary discussions that might derail from the main goals of the board meeting. In order to present the current state of the company, CEOs should give clear metrics about the main areas of the business: finances, sales, business development, product, team, marketing, etc.

While preparing for my first board meeting, I looked at different recommendations to structure the slide deck but, at the end, decided to create a specific structure that work for our investors. Even the slide deck template before might result as a good reference, I suggest you do the same and try to find the flow and structure that works for your company.

I hope this helps. Let me know your feedback.

 
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Posted by on March 20, 2014 in Uncategorized

 

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My Competitor Copies My Blog

copycatLast night we had a very bizarre incident as we learned that FeedHenry, one of KidoZen competitors, published a word-by-word copy of one of our blog posts(http://www.kidozen.com/enterprise-mbaas-vs-api-gateways/) under their name. After the initial shock, we documented the incident and proceed to have some fun on Twitter and Linkedin with them. I’ve been receiving emails all night about folks in the mobile industry expressing how shocked they were with the incident.

After a while, FeedHenry removed the blog post but, until now, we haven’t even received an explanation or an apology. The low nature and the lack of class of this move made me reflect about some of the principles that startups should follow while competing aggressively in the marketplace.

Remain Classy

Don’t take me wrong, one of my biggest problems is that I am a fierceless competitor, red the “Art-of-War”, take no prisoners type of guy. However, you quickly realize that you can still be a super aggressive competitor and remain classy with your competitors. Class is important to attract talent and build a great culture within your company. Copying content from a competitor and publishing under your own brand is certainly not a classy move.

Low Does Not Mean Tough

Making low moves to sick an edge does not make you tougher, it just makes you low-class. Tough companies are able to find solutions in difficult situations without sacrificing their brand and culture.

Apologize When You Screw Up

People make mistakes, it happens. When in that situation, acknowledge the mistake and apologize to the affected parties. Not doing so, will just make things worse.

Respect Your Competitors

Finally, always have some respect for your competitors. At the end, having good competitors it’s an important part of making your industry better. If your competitors are any good, they will beat you sometimes on some things. Not acknowledging their strengths will blind you when making strategic decisions. You can still compete fiercely and be respectful of your competitors.

These are just some of my thoughts as we went through our situation last night. In any case, we will keep posting great content on our weblog and I hope FeedHenry learns a thing or two from this.

 
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Posted by on February 21, 2014 in Uncategorized

 

My First Board Meeting as CEO

board-meetingLast week I ran my first board meeting as CEO of a venture backed company. Among other things, that’s the reason why I haven’t been actively blogging in this space as the preparations for the board meeting took a considerable part of my time.

Even though I sit at the board of a few other companies and have a good experience participating in board meetings, I didn’t anticipate the intensity that takes running a board meeting as a startup CEO. In that sense, I think the experience broaden my perspective of the value that a board can play in an early stage startup and, hopefully, that will make me a better board member. In any case, I thought I’d summarize some of the lessons I learned while preparing for this board meeting.

Overprepare

I couldn’t stress this enough. As a CEO, it’s your duty to your board to be super-prepared for the board meeting. In my case, I found myself working the entire weekend putting together the board package and obsessing about every little detail. At the end, I ended putting together more than 200 pages of documentation but I think our board members got a very in-depth view of the KidoZen strategy and they were able o be very productive during the board meeting.

Deliver the Board Package a Few Days in Advance

If you have the opportunity, deliver the board package a few days in advance so that your board members have the time to review it. Even though this is a pain, understand that your board members don’t have your same level of understanding of your strategies and having the time to review of board package in advance will make them more productive during the meeting.

In my case, I didn’t have the opportunity to deliver the package with so many days in advance but, instead, we printed the entire 200 pages of documentations and delivered to each board member so it will make it easily for them to read when they were offline.

Focus on Making the Board Meeting Productive

Most board meeting are a complete waste of time. If you are not well prepared, you can find yourself getting stuck in unproductive discussions that won’t add any value to your company. Additionally, keep in mind that some of your board members can be really disruptive during the meeting. To mitigate that, you need to have a super detailed agenda and be extremely clear about your goals for the board meeting and relentlessly trying to control the agenda even if it means being strong with your board members.

Financials Matter

Presenting an accurate picture of the state of the company is a super important part of the board package. In that sense, presenting detailed information about the financials and other key performance indicators is super important to help your board members get a good understanding of the state of the company and identify the areas on which they can be helpful.

Be Honest, Disclose your Challenges and Failures

No CEO likes talking about their failures and current challenges. However, it’s important to realize that your board members are co-owners of your company and it’s their job to help you and advice with those challenges. In my case, I have a included a “Challenges Slide” in every single section of the presentation such as business development or sales to highlight the areas on which we could use a lot of help.

Have Clear Goals and Resolutions that Need to Be Approved

Resolutions are an important part of the board meeting and one on which you can end up spending way too much time. I believe it’s a good practice to highlight the resolution that will require voting in advance so that your board members can be prepared to have an intelligent discussion about it.

Have your Legal Counsel Present During the Meeting

Not a standard practice, but I find it super helpful to have your legal counsel present in the meeting to draft the minutes and assist with any legal matters. Most top-tier firms will offer you a good rate for those services event more if thy are really invested in your company. In our case, our legal counsel assigned one of his associates to participate full time in the meeting and they were extremely helpful in several discussions.

I hope this helps, I will have a follow up post about the board package soon.

 
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Posted by on January 29, 2014 in Uncategorized

 

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Back To Work: About New Year’s Resolutions

nyeThe entire KidoZen team is back at work this week and I never seen this level of excitement. Obviously, we ended the year with a very good momentum and have super ambitious and really exciting plans for 2014. Like most people, I spent part of my holiday break reflecting about 2013 and setting the goals and plans for 2014.

During that time, I was super happy to discover that I hit over 85% of my 2013 goals, had some pleasant successes in areas I didn’t  plan for and I still manage to do a decent  job on the resolutions I didn’t accomplish. While 85% might not seem particularly impressive, my satisfaction comes from knowing that my 2013 goals were super ambitious. At the end, I believe that’s the only way to set goals.

From New Year resolutions to our monthly/weekly plans at KidoZen, I like to evaluate goals based on the following rule:

  • Accomplishing Over 90% of the Goals: Probably our goals are not ambitious enough
  • Accomplishing Between 75% to 90% of the Goals: We are doing well, let’s keep pushing to get close to 90%
  • Accomplishing Under 75% of the Goals: We are doing something wrong, time to reassess.

As always, the key to accomplish goals is to stay really focused, iterate and adapt.

In terms of my New Years Resolution, I have some super ambitious goals both personally, for my family and I can’t not even tell you about some of the crazy goals we are trying to accomplish with KidoZen. It should be fun ;)

 
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Posted by on January 6, 2014 in entrepreneurship, leadership, startups

 

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Enterprise Software Lessons: Selling Top-Down vs. Bottom-Up

ABCEnterprise software sales are always a difficult task for a startup and something that is fundamentally different from the consumer market. Traditionally, enterprise software sales developed a reputation for being a long and bureaucratic process. However, recent technology movements such as the consumerization of IT, the popularity of open source technologies or the emergence of mobile devices have opened new avenues for products to get into the enterprise.

When thinking about selling to enterprises, there are two main models that will dictate the core of your strategy.

  • Top-Down Sales: Some products get sold directly to a decision maker like a Chief Information Officer(CIO) or Chief Marketing Officer(CMO).
  • Bottom-Up Sales: As an alternative to the top-down sales model, some technologies have the capability of getting adopted within enterprises by non-decision-makers such as developers or information workers before they make all the way to a decision maker.

While the top-down approach have been the cornerstone of enterprise software sales for decades, bottom-up models are a result of the new movements such as the consumerizaiton or IT or the democratization of software. As any new and evolutionary model, it’s very tempting for startups to try to embrace a bottom-up sales model. However, it’s important to realize that both models have very well defined strengths and weaknesses and, more importantly, they have a profound impact in the structure of your sales organization.

Top-Down Sales

This model is great for generating revenue from every single customer. Additionally, a top-down sales model is essential to land large deals that need that become strategic to your customer.

The top-down sales approach typically comes at the cost of longer sales cycles that require a well-established sales force. Additionally, achieving relevant market share with this model is extremely resource intensive as your sales force needs to be involved in every deal.

Bottom-Up Sales

The bottom-up model is great for achieving volume and spread your footprint within a wide customer base. This model does not typically require a large sales force and guarantees that your sales executives only get involved with a prospect after they have evaluated the product and are truly interested.

While achieving customer volume is great, the bottom-up sales model does not necessary conduct to revenue and might put you in a situation of supporting thousands of non-paying customers. The tech startup scene is full with stories of companies that were able to attract a massive number of non-paying customers before going out of business. More importantly, embracing a bottom-up approach requires a level of scalability that can become resource intensive for any startup.

Top-Down Does Not Mean Free

When embracing a bottom-up sales model, it’s important to realize that the model doesn’t necessarily require to offer a free entry point to the product (fermium). While fermium models makes a lot of sense as a top-down approach, there are plenty of scenarios on which enterprise software startups can charge a small nominal fee as a starting point.

Deciding whether to adopt a top-down or bottom-up sales model is essential to structure your sales organizations and customer acquisition processes. For some products, top-down and bottom-up approaches are mutually exclusive. However, technologies like Box, AWS, MongoDB have proven that you can effectively developed both sales models achieving large market share while also acquitting paying customers.

 
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Posted by on December 23, 2013 in Uncategorized

 

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I am Back! And We Just Raised $5 Million Dollars

KIDOZEN-LOGO-NEGATIVE_2After a hectic couple of months, I am finally able to sit down and share some exciting news with you guys. The last 2 months have been incredibly intense for me to the point of affecting my regular writing on this blog. However, I do have a good excuse. If you haven’t read the news, I am super happy to announce that KidoZen just completed a $5M Series A led by Third Point Ventures!

Since the Wall Street Journal broke the news two weeks ago, I have been having different conversations with different folks from different backgrounds: VCs, journalists, entrepreneurs, partners, etc, explaining our reasoning and experience during the process. Based on those conversations, I thought it might be a good idea to share some of those insights with you guys. In that sense, I summarized some of the not-so-obvious lessons that I either learned or validated during the process.

While I work with various VC groups as a tech advisor, this is the first time I have raised institutional capital. In that regard, you might find some of my perspectives useful if you thinking on starting the process of raising VC money for your company. For the purpose of this blog post, I am going to keep the explanations short and simple. We can expand into the details in subsequent blog posts.

If you can, only raise capital when you are ready

From a financial standpoint, KidoZen didn’t need to raise capital. We have a large number of paying customer and revenue numbers on the mid seven figures. We decided to raise capital because we felt the company is at an inflection point from the growth perspective and we have a very aggressive roadmap in order to continuing acquiring meaningful market share. That position gave us a lot of leverage during the process in order to bring on-board the right partner under the right terms.

You are always raising

Officially, we met with different VC groups the last week of September and received the funds the week before Thanksgiving. While you might think that was a very rapid process, the fact of the matter is that we have been having unofficial conversations with different VCs for the good part of the year trying to identify the right partners for a company like KidoZen.

As a CEO, I am of the idea that you are always raising capital. Whether you are officially raising or having informal conversations, it’s your job to keep potential investors interested and up to date about your company and progress. If you only go on a fundraising exercise when you need it, you will put yourself and your company under unnecessary amounts of pressure that might result in an unfavorable deal.

Keep the team focused (or don’t tell them anything)

When we started our official fundraising process, the KidoZen executive team made the decision of not sharing the news with the entire company. While that might look contrary to the principles of transparency we constantly predicate, we decided it was very important for the team to remain focus on the product, customer and partner acquisition and not add any additional distractions.

Raising capital is a very stressful process. As a CEO, you need to decide whether you want to share that pressure with your team or put that burden upon yourself and keep the team focused on execution. There is no right answer, it all depends on your current state and culture of your company.

In our case, we decided that sharing that level of pressure and uncertainty with the entire company was going to become an unnecessary distraction. At the same token, we made the commitment to share the news with the team as soon as we knew the outcome regardless of whether we were successful or not.

Be honest, all the f… time

I can’t stress enough the importance of this. If you are truly partnering with your investors to build a great company, you need to be completely transparent with them. We see our investors as part of the team and not as an external entity. If your investors really believe in your company and are really interested on investing, they will roll up their sleeves and help you address any problems that are an impediment for the fundraising process.

Make sure your company is organizationally ready for institutional investors

Complementing the previous point, If you are thinking about raising institutional capital, I would suggest you take a serious look at your company and make sure it can undergo the detailed due diligence process which is typical is series A-B-…Z. in our case, I completely underestimated our readiness as a company and encountered numerous challenges throughout the Series A process. Thankfully, our investors, legal counsel, finance group were incredibly efficient fixing any unexpected issues and brought the process to a successful closure. At the end, I think that exercise made KidoZen a stronger and certainly more operationally organized company.

Trust your investor

Either you see your investors as true partners and part of your company or as a glorified ATM. If the former, is your duty to be completely honest with them, trust their judgment and accept the occasional criticism in order to make your company better. If you don’t like to be challenged on your decisions or have a problem when people disagree with you, I would suggest you explore other avenues to raise institutional capital. Dealing with VCs is too painful to do it just for the money.

Get help, don’t do it alone

Another one of my mistakes. I really thought that I could handle most of the fundraising process by myself with the help of our legal counsel and finance team without the need of additional help. What that ended up being mostly true, the process was as painful as short. Raising institutional capital can be incredibly stressful and not having anyone to share your challenges and frustrations with makes it even worse.

In my case, there were a couple of times on which I felt completely exhausted about the whole process. At the same time, I didn’t want to communicate that state of mind to the team because I felt it was very unfair to them. To this day, I can’t thank enough my dear friend (and new KidoZen board member ;) ) Jason Port for his support and help during this process.

I know a lot has been written about the process of raising institutional capital. I hope some of this ideas resonate with you as I was positioning them from my own experience. I will share more details in a future post.

 
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Posted by on December 13, 2013 in Uncategorized

 

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Violin Memory’s IPO Lessons: Public Markets Don’t Always Get Cool Technology

Violin Memory, one of super cool players in the flash memory storage space, had a very rough IPO last Friday. With an initial offering of $9 per share, we watched the stock dropped all day up to 22% at $7.02 per share. Since then, the stock has had ups and downs closing at $7.50 last night. This IPO was another example that, when come to highly competitive sectors, public markets care more about revenues and deal flow than about solid technology roadmap.

As a technologist, I always have a hard time reconciling innovation with public market perception. While there are no doubts about the game changing capabilities of Violin Memory technology, the fact of the matter is that solid state flash memory is a very competitive space with incumbents like Dell, HP, EMC and IBM moving in. Like any other utility technology, the expectations are that these types of technologies will be highly commoditized in the near future. The fact that other players in the space such as Fusion.io are going through a bit of a turmoil didn’t get Violin’s IPO either.

In those type of sectors, public markets tend to look for a solid path to profitability and deal pipeline to overcome some of the, sometimes unjustified fears. From that perspective, Violin Memory couldn’t present a great picture either after terminating a deal with its top reseller: HP who have helped to grow the company’s revenues by 500 in the first year. In terms of numbers, Violin posted revenue of $51.3 million in the first half of 2013, up from $30.3 million in the year-ago period. However net loss was $59.2 million in the first half of 2013, up from a net loss of $48.3 million. Not a great picture either from a public sector perspective.

Having said all that, I still feel optimistic about the future of Violin Memory. However, my perception has little to do with an empirical analysis and is more based on the fact that I have a really hard time betting against a super talented team that knows their space better than anyone else in the market. With the right support, Violin Memory will be able to innovate into new areas in the solid state flash memory space and keep differentiating itself from the competition.

 
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Posted by on October 4, 2013 in Uncategorized

 

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