Fresco Capital

Why Everything Will Be Disrupted — And What Your Startup Can Do to Win

By Fusion by Fresco Capital, 3rd January 2017

Taken together, the evolution of technology, macroeconomic trends, and political shifts all point to the same conclusion: We’re nearing the end of a cycle. It’s only a matter of time before the industrial age disappears altogether, giving rise to the information age.

As we become even more submerged in this new fast-paced digital age, it’s becoming increasingly clear that everything will be disrupted sooner or later — even doctors and lawyers.

In the past, the old rules of economies centered on the concept of “choice under scarcity” — which is how “supply and demand” became a phrase everyone knows. But things are changing in the new economy. Now, it’s about “choice under abundance.”

Customers — in every sense of the word — have more choices than ever before. Consumers can compare a ton of brands in a few minutes, and companies have their pick of freelancers and contractors on a project-by-project basis.

For this reason, the job market is shaping up to be dramatically different in the coming years. In many ways, the gig economy is already here. But by 2020, experts predict as many as half of U.S. workers will be freelancers.

Beyond the change in the job market, we can also expect international barriers to break down further thanks to new technologies. Syrian refugees, for example, were able to get across Europe and find their neighbors and families thanks to smartphones, Facebook, and WhatsApp.

How can companies survive this changing business, technological, and economic landscape?

How Startups Can Win

Succeeding in this new age requires an immersion in the technologies and understanding of the economic implications inherent in the information age. Quite simply, companies need to prepare for disruption because it’ll happen sooner or later. Don’t hide behind regulation (e.g., San Francisco). You’ll eventually get burned.

If you’re a startup, go attack the areas where regulation meets technologies. While venture capitalists used to not invest in these battleground areas, that’s precisely where the opportunity lies these days.

Case in point? Uber, which is now valued at $80 billion.

The company lives in gray areas. In the early days, there was an argument as to whether the ridesharing company should be able to pick up and drop off customers at New York City-area airports. After the New York City Taxi Commission said that Uber shouldn’t be able to serve airports because drivers were uninsured, Uber ponied up money to get their drivers insured and cover costs associated with legal representation.

What’s more, when Mayor Bill de Blasio was threatening to cap the number of drivers Uber could have in New York City, the company released a feature on its app that showed how long it would take to hail an Uber if the proposal succeeded. De Blasio eventually capitulated. Uber had too much support to fight.

It seems quite plausible that the successful companies of tomorrow will all have an Uber-like policy that toes the line and tests regulations — giving customers what they want before politicians can take it away from them for the sake of the status quo.

Change Is Everywhere

Ten years ago, who would have thought that the restaurant industry could be drastically changed by technology? But here we are. There are manytablet-driven restaurants. As any restaurant owner knows, margins are tight. The use of tablets lessens operating expenses and reduces the frequency of errors.

Technology has also disrupted the coffee shop (well, at least Starbucks). Though in my opinion the Starbucks app leaves a lot to be desired, I still use it because it beats waiting in line.

Thanks to outsourcing software and platforms, higher-end jobs — like design specification managers and systems architects — are becoming increasingly available. This is great news for workers and companies alike. Engaged on-demand talent is closer than you think.

The economy has changed; this is your new way of looking at it. The more prepared you are for disruption — and certainly the more aggressively you pursue the opportunity to be the disruptor — the more likely your company will live to see brighter days.

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Photo by flickr user Tsahi Levent-Levi

Inspiration from Leading 8 Million Active Parents & Volunteers

By Fusion by Fresco Capital, 3rd January 2017

The most inspirational founders are able to find a mission bigger than themselves and I was fortunate to have a recent Q&A with one of these founders, Karen Bantuveris. Not only is she a savvy entrepreneur and mother herself, her company empowers a community of 8 million parents and volunteers. Karen was recently at the White House as part of the Computer Science for All initiative and this was a great topic to start the discussion.

You recently spoke at the White House about SignUp.com’s role as an official partner to the Computer Science for All initiative (#CSforAll). What was that like?

Speaking at the White House was of course an unforgettable experience for me. I felt honored, inspired, empowered — and excited to see SignUp.comjoining other tech leaders like Google and Facebook as an official partner in such an important initiative in education. It’s a movement anyone can contribute to — you can learn more about it on the White House’s website.

How will SignUp.com be contributing to this initiative?

We’re here to help engage parents. They’re a powerful, untapped audience capable of making a huge impact in our nation’s goal to bring computer science to ALL kids, and SignUp.com is connected to 8 million of them. We’re doing a variety of things to help parents and families drive this movement at a local level, but the one we’re most proud of is “Family Code Night.”

During a memorable and fun Family Code Night event, families learn to code together. Thanks to a program produced by our partner, MV Gate, hosting a school-wide Family Code Night is easy for any parent to coordinate. Kids and parents get an exciting introduction to computer science — they get to do something fun and empowering with their family and with their friends and school community. Families leave the event eager for more and ready to support computer science learning at school and at home. The Family Code Night event kit is available free at SignUp.com/FamilyCodeNight, and we’ll be encouraging our users to download this and other free computer science ideas and resources from our new CSforAll Idea Center in partnership with the CSforAll Consortium.

Tell us why you chose to get involved with CSforAll?

There are so many things we each want to do with our day, with our lives, for our children — but it’s overwhelming if you try to do it on your own. As a business leader and mom, I get that. We’ve spent seven years building SignUp.com around the belief that we are all stronger in numbers. Every day, our solutions help people unite groups of 10, 50, 1,000 people around common goals and interests. With CSforAll, SignUp.com gets to do that for a nationwide movement. Given the powerful role parents play in influencing school priorities and our unique connection with them, it makes perfect sense that we would contribute to this movement.

Until recently, your brand used the name VolunteerSpot. Why the change to SignUp.com?

Our solutions were originally designed for moms like myself who were looking for a better way to coordinate school activities that depended on parent volunteers. Over time, parents began to expand how they used our solutions — with friends, at work,… Today, people use our solutions for every type of activity that relies on people to sign up and participate.

We recognized it was time to adopt a name that more accurately reflected our solutions and enabled our company to reach new audiences such as universities and small businesses. So this summer, we rebranded as SignUp.com. Our new name more accurately reflects what we do and who we serve (everyone!), and therefore generates better outcomes for the people using our solutions to organize activities that depend on group participation.

Based on your experience, what advice would you share to other companies who are thinking about a change in brand?

Consult an outside brand strategist early and often.
Build a comprehensive project plan and assign a skilled project manager, just as you would a website launch or product launch.
As you design your transition plan, carefully consider all of the people and components of your business that will be affected — each group of stakeholders and audience segments may need targeted communication plans but deploying a change is much more than marketing and communications. For example, site infrastructure, SEO, help desk, partner contracts, human resources and banking are all touched with a brand change.

Your community of users is extremely active and engaged. What kind of brand partners are the best fit for your community?

We wouldn’t be here without our brand partners. Brands like Lands’ End, Penguin Random House, Uncle Ben’s, and Chuck E. Cheese advertise with us to reach the millions of highly influential moms that use our site.

SignUp.com best fits brands that want to connect with active people (which includes pretty much every mom with school age kids!). They use SignUp.com because they’re always looking for ways to do more with less time — for some that means personal interests like church or book clubs, for others that means career achievements, and for the majority of SignUp.com users, that means contributing to their child’s education and success.

You’re based in Austin and have an insider’s perspective of SXSW. Any tips for visitors, especially those who are thinking of going for the first time?

Treat it like any travel adventure: wear smart shoes, try new things, embrace the unexpected, and sleep when you get home! SXSW is immersive and you may not see a lot of Austin, but don’t leave without eating a breakfast taco (or three). Everyone has their favorite taco shop, but personally, I’m Team Torchy’s all the way!

Thank you for reading!

Our portfolio companies including SignUp.com are always on the lookout for top talent and also partnership opportunities. To learn more, get in touch.

Image Source: White House

The Most Effective Way Governments Should Support Startup Ecosystems

By Fusion by Fresco Capital, 3rd January 2017

I once met an active angel investor from Europe who was convinced that government subsidies of investors were the most effective way to build startup ecosystems. Of course I asked the obvious question, “what about Silicon Valley?”

“Except Silicon Valley” was his reply.

Huh. Lightbulbs going on everywhere (at least in my mind).

The Best Intentions

Small scale grants to get startups off the ground in place of friends, family and fools money certainly makes sense. After all, most people actually don’t have friends, family and fools with enough money to support them.

What about when governments start subsidising rich angel investors with tax breaks? While this may be the result of genuine intentions to encourage risk taking, if investors are ultimately viewing startup investments as tax deductions, then this is a fundamentally flawed strategy. Instead of being investments, startups are transformed into tax loopholes.

Moving up the investment value chain, it’s certainly admirable for governments to actively support local venture capital because there is a positive knock-on effect of helping the real economy. This leads to a natural question:

How should governments support local venture capital funds in order to scale and build a local ecosystem?

One approach to building a local venture capital ecosystem is to provide rebates and other complex incentives where the government takes on more risk and leaves the private sector with extra return benefits. No matter what the fancy official name of this kind of program, it is effectively a subsidy.

As a venture capital investor, I’m supposed to jump at the chance of getting subsidised returns. Call me old fashioned, but I don’t want to receive subsidies to juice returns because it’s wrong for society (my altruistic side) and I don’t want my returns to be artificially boosted by subsidies (pure ego).

Fortunately, there’s a simpler idea.

Instead of tilting the risk / return in favour of funds via subsidies, government related capital should simply be open to investing in new venture capital funds on market terms. The boring reality is that most government capital is allocated through various intermediaries and by the time it gets to venture capital funds, many decision makers take the view of something like this:

New venture capital funds are too risky, so we prefer teams that have worked together for at least 10 years and are raising fund 5.

If you want to attract venture capital investors to your local ecosystem, it’s a lot easier to do so before fund 5. Rather than throwing around subsidies to attract funds, governments should take a hard look at how their existing capital is being allocated through various intermediaries to make sure that there is an allocation for emerging venture capital funds.

If done correctly, this market driven approach will actually increase returns, as there’s plenty of data to show that new funds are generating outsized returns. Instead of spending money to subsidize venture capital funds, governments can get more money through higher returns.

The Unintended Consequences

Beyond the obvious concern that governments should not be subsidising investors directly, there is also the problem of unintended consequences.

At the company level, since small scale grants for startups to get off the ground usually do make a positive impact, it’s very tempting for governments to scale that up.

Unfortunately, when companies raise institutional capital which was only possible because of subsidies tied to the investment either directly or indirectly, the incentive mechanisms tend to train grantpreneurs.

The reality is that all startup subsidies come attached with complicated forms because governments need to protect themselves from criticism. So there is no such thing as “simple startup subsidies”.

Grantpreneurs are extremely efficient and skilled at filling out the complicated forms and ticking all the right boxes for subsidies but unfortunately are a lot less skilled in building successful businesses.

People improve their skill through repetition. The worst case scenario is creating serial grantpreneurs, who are able to jump from subsidy to subsidy.

One of the goals usually cited by governments to subsidise investors is that this will then lead to more jobs. Of course, there are usually many restrictions on the people who may be hired.

This prescriptive approach to hiring can actually lead to increased inequality because it increases demand for a fixed pool of talent rather than increasing the overall pool of talent. Wages go up for those already with skills. Everyone else, not so much.

Throwing money at jobs is not the same as increasing the overall pool of talent.

A Better Way

Should we just throw our hands up in the air with the view that governments are always wrong and it’s foolish to mess with markets?

Not quite.

Markets are far from perfect and as the impact of technology continues to accelerate, cities and countries that do nothing to build thriving startup ecosystems are at risk of being left behind.

So what should governments focus on when it comes to extra support for startup ecosystems?

Ultimately, every government has limited resources and a key starting question should be “what is the best use of our resources for maximum impact?”

If the goal is to encourage innovation across society and the improvement of overall welfare, better to focus on talent.

What would a program to support talent look like? Rather than giving money to startups, which would empower grantpreneurs to fill out forms more successfully, governments should be subsidising individuals to learn new job skills. To be clear, this does not mean training everyone to become an entrepreneur.

Empowering individuals to make their own job skill education choices at least creates a pathway for them to find new job opportunities. It won’t work for everyone but it has the potential to enhance the overall pool of talent at scale. So rather than funnelling more money to the same number of people, there will be a broader base of talent.

Will there be inefficiency? Of course yes.

Will there be fraud? Probably.

But at least by focusing on individuals, the magnitude of any individual fraud case should be smaller.

Even with inefficiency and fraud, as long as the overall talent pool is improved, then this approach could create massive value for society.

The Unexpected Benefits

Beyond the direct impact of enhancing the talent pool, there is an important secondary benefit: increasing the quality of overall talent should attract more institutional capital.

Why does increasing the pool of talent attract more capital? Because capital follows talent.

Just take a look at the history of Silicon Valley. The talent moved first, led by pioneers like the Traitorous Eight, and the capital followed.

There are two factors behind this dynamic. First, great talent is still scarcer than capital. Second, it’s easier to move capital than talent.

So by focusing on improving the talent base, governments will naturally be building the foundations of attracting capital for the right reasons.

The First Steps

It’s tempting for governments to go big with a fancy launch party and lots of hype around a new program.

But for a talent subsidy program to actually be effective, better to act like a startup and start with a small test. Make it small because then the mistakes will be small and there is only one guarantee with a talent subsidy program: there will be mistakes.

Then this is the most important part: get feedback, learn from the mistakes, and don’t scale up until it’s actually working on a small scale.

This means less publicity in the short-term but ultimately much larger positive impact in the long-term. It’s a marshmallow test for governments who want to support startup ecosystems.

Lightbulbs are a metaphor for new ideas and innovation. If governments truly want to support startup ecosystems, they should be focused on helping people find their unique lightbulb moments.

For anyone else interested in figuring out how governments can help support startup ecosystem talent, please get in touch.

Behind the Scenes at Nanosatellite Company Spire

By Fusion by Fresco Capital, 3rd January 2017

I first connected with Peter Platzer in 2012 during the early days of Spire, before any of the company’s nanosatellites were actually in space. We hit it off immediately, and very quickly this led to an investment by us at Fresco Capital. There are many teams with big dreams, but Peter and the Spire team are one of the few teams that consistently execute those big dreams. In addition to launching and managing a constellation of nanosatellites, the satellite-powered data company has built a truly global business with offices across Asia, Europe and North America.

Here’s a recent Q&A I had with Peter.

When most people think of satellites, they think of very large and expensive projects that only governments can afford. What has changed in the past 15 years and why?

Nanosatellites are about the size of a bottle of wine and since 2014, there have been more nanosatellites launches than traditional large ones. With nanosatellite being far more affordable, this has dramatically changed the number of space faring nations, companies, and even individuals!

The two biggest reasons for that is the integration of new technologies from other industries and the creation of the CubeSat standard. Components from smartphones, drones, and robotics have made it possible to build an incredibly powerful satellite in a fraction of the time at a fraction of the price — it is still quite a bit or rocket science, but simply by replacing the need for lots of money with the need for lots of ingenuity and brain, it opened access for innovation from the private sector to space. Secondly, when it comes time to launch, there are now opportunities to share a ride in almost every space-faring country because the standard form factor is now a well-known and accepted by over a dozen launch vehicles.

You are originally from Europe and have lived in both Asia and North America. How does that influence your perspective of which country or countries Spire considers home?

When I was a teenager I came to my father with my passport and said “I’d like it to say ‘Peter Platzer, citizen of earth”. This was the time before the fall of the wall, my home town being just 45’ away from the Iron Curtain. An avid reader of both science and science fiction this separation between me in wealthy Vienna and others just 45’ drive away made no sense. Since then I travelled to over 60 countries and worked extensively in 7 countries on 3 continents. Clearly this has deeply influenced my thinking, curiosity, and appreciation for different cultures, norms, perspectives. And while I don’t think that my background influenced my perspective on Spire’s ‘home country’ it has certainly influenced the type of problem I want to solve and the type of company I would want to start. So from the beginning it was very clear that Spire needed to be a global company, with global customers, global operations, a global talent pool, solving global problems. Its home country is Earth.

The transformation of the space industry is likely be a much needed catalyst for job creation in the future. What should governments, schools and parents be doing to make sure that their children are well prepared for these new job opportunities?

The best thing that schools can do is to keep kids engaged with technology. We need people who can code, build electronics, and understand complex systems. Thankfully there are great minds in ed-tech, like Ardusat.com, working on this problem. We put an educational payload into every satellite because investing in children’s passion for science and technology is an investment in our future.

Anything related to space has a huge amount of global and national regulations. Recently, startups in other industries have been hurt by not following regulations. How do you approach the challenge of innovating in a highly regulated industry?

It’s always going to be difficult to deal with a highly regulated industry like aerospace but it is worth reminding yourself that the regulations were created for a reason. When we run into a roadblock, we talk with people. It’s often the case that no one even imagined a world with nanosatellites when they wrote the rules. So far we have found regulators to be very keen on understanding and supporting New Space, even though they often have to work with regulations that are anachronistic to today’s rapid pace of space technology development.

Many technology companies struggle with having diversity in the team. Spire, as a space company, is obviously working on some very advanced technology, so how does the company approach the issue of talent diversity?

Our approach to talent is to hire the best people and to build a heterogeneous team. Research has showed that heterogeneous teams consistently outperform homogeneous teams. Our team now consists of people from 18 countries and counting. It is also worth noting that from our perspective, diversity comes far more in the form of different personalities, approaches to problems, situations, desires, and aspirations, that differences visible on the outside. We measure diversity far more by the “content of the book” rather than “the cover of the book”, something that we think is often forgotten in the diversity debate.

What benefits do you think this new technology will be bringing to companies, government, and people in the next 1–3 years?

Nanosatellites are bringing about a sea-change in how much data is available from space to benefit mankind. Its like switching from a 1950 black and white silent movie to a 2015 4k 3D IMAX movie. Many of those benefits are yet to be discovered, but simply imagine a world were no airplane is ever lost again, global shipping is running on half the emissions because of route optimisation, our oceans are replenished in fish stock thanks to eradicating illegal fishing, and weather forecasts are as accurate as swiss train schedules, allowing you to never be late for a date (or miss a shipping to a customer). And those are just the areas that one company, Spire, is working on. We are certain that many more areas will be positively impacted by the wide-spread use of nanosatellites, similarly as the widespread use of the PC instead of the mainframe brought about the internet.

Thank you for reading!

Our portfolio companies including Spire are always on the lookout for top talent and also partnership opportunities. To learn more, get in touch.

Image credit: Spire Global

Connect Pipedrive to a Slack Channel Using a Bot

By Fusion by Fresco Capital, 3rd January 2017

Here at Fresco Capital, we love to eat our own dogfood so we have been using Pipedrive for years. Pipedrive is a sales management tool that helps sales teams manage a sales pipeline in a visual way. At Fresco we enter everything into Pipedrive: our portfolio companies, startups that pitch us, our investors, potential investors, etc.

Since we embraced Slack at Fresco for our internal conversations, it is the one stop shop for all of our communications. (I joke with our partners, if it is not in Slack, it didn’t happen.) In Slack we created a #pipedrivebot channel where we would alert each other of a new update we just entered into Pipedrive. After doing that a few times, I wanted to automate this process; we needed to automatically wire up Pipedrive to a Slack channel. The easiest way to do this is with a bot.

Bots As a Service (BoTaaS)

Fortunately our friends over at Recime have created a bot to do just this. Recime is a cloud based bot infrastructure backend and hosting platform for developers (BoTaaS). Recime automates all the plumbing a bot developer runs into, similar to what parse.com did for mobile devs before Facebook acquired it. One of the free bots hosted on their platform is a Pipedrive to Slack Channel bot.

Connecting Pipedrive to a Slack Channel

Using the bot is easy, but you have to configure a few things in both Pipedrive and Slack. In order to configure the Recime pipedrive bot, you need to do the following:

Enable integration Webhooks in slack
Enable push notifications in Pipedrive to trigger the Recime pipedrive bot.

Enable Integration WebHook in Slack

In Slack, from account menu, go to menu->app & integration and then click manage in the navigation bar:

Click Manage -> Custom Integrations -> Add Configuration:

This will take you to a wizard where you can configure which Slack channel the bot will send messages to. Once completed you will be given a Webhook URL that you will need to configure the pipedrive notification. (Image and other metadata information are configured automatically by the bot therefore you can leave them as it is. ) Copy the URL to a safe place.

Enable Notifications in pipedrive

This task has three easy steps.

First you need to obtain an API Token from Pipedrive. Go to your Pipedrive Settings and click API. Copy the API token to a safe place.

Next up you have to create a URL out of the Slack WebHook and Pipedrive API token for Pipedrive’s push notification to enable the bot to connect the two together. You can do this by going to the Recime website and entering the WebHook URL and API Token into this form:

https://recime.ai/bot/pipedrive

The Recime website will return to you a URL, copy it to your clipboard and go back to Pipedrive for the past step.

In Pipedrive, go to Settings -> Push Notifications and create a new notification:

Enter in your Pipedrive user name, the URL that the Recime form gave you and the events in Pipedrive you want to enable the push notification bot for.

If you want to get notified about everything you enter in Pipedrive, put in *.*, or if you just want to be notified when a deal is updated you would put in updated.deal, or if you only want a new note notification put in added.note. If you are not sure use *.* and experiment.

Now your bot will now send a message to the #pipedrivebot channel in Slack every time you update your Pipedrive.

Enjoy. 😉

Why You Should Start Experimenting with AR and VR Today

By Fusion by Fresco Capital, 30th December 2016

Those of us paying attention all knew it was only a matter of time before augmented reality (AR) and virtual reality (VR) became mainstream. Now, thanks to the rise of Oculus Rift and Pokémon Go, we’re beginning to arrive at that point.

First, some brief definitions so we are on the same page:

Augmented reality is technology that integrates digital information into the actual environment surrounding a user in real time, usually via a smartphone or tablet. According to MarketsandMarkets, the AR market will grow at an annual clip of nearly 76% over the next six years,reaching $117.4 billion by 2022.

Virtual reality is technology that generates a three-dimensional digital environment, tricking users into “believing” they’re inside that environment when interacting with the technology. MarketsandMarkets says the VR market will grow 57.8% each year between now and 2022. The market realized $1.37 billion in 2015 and is projected to bring in$33.9 billion by 2022.

If you or your company is in any position to create AR and VR products, now’s the time to get started. Even if you fail during your first attempt, you’ll get a head start on claiming as big a chunk of the AR and VR pies as you can.

I Couldn’t Jump

I am advising a company in the space, so recently I was lucky enough to visit an AR/VR accelerator and interact with the exciting new technologies that many businesses are building. I started playing with the Oculus Rift and thought it was pretty cool. I also got to try an HTC Vive (which I liked much better). Even though I knew what I was seeing was a digitalized environment, I wouldn’t “jump off of a cliff” when presented with the opportunity. It all seemed too real. Psychologically, I couldn’t do it.

My experiences, coupled with the media frenzy over Pokémon Go — which provides the first mainstream AR experience — have led me to one conclusion: you need to simply get involved and start building products now, rather than later. Because there’s really no such thing as failure in this case.

If you fail, it’ll probably be because the market isn’t big enough and the tech isn’t as popular as it will be one day. But you can learn from those shortcomings. And in two or three years when the market is booming, you’ll succeed because you’ll have learned a ton of helpful lessons while failing.

An Enormous Opportunity

Pokémon Go represents a breakout moment for augmented reality. But we’re still in the super-early stages of seeing the true power of the technology. It’s where mobile was when Michael Douglas was blabbing on an enormous cell phone in Wall Street.

So before you get turned off on AR because of how annoying you perceive Pokémon Go to be, it’s worth your while to consider how the technology can transform your company. If you’re a startup founder, there’s a good chance your first stab at AR or VR will be unsuccessful. But three to five years from now, you’ll be in one of the best positions to build the technology.

Need more convincing? F1 recently signed a deal that will allow its races to be streamed via VR devices. Racing fans will be able to see the course as if they were sitting in the driver’s seat themselves (which might be a way for racing to attract new fans — folks who previously couldn’t understand the sport’s appeal).

Despite these breakthroughs, there are very few masters of AR and VR technologies right now. Developers are going to AR/VR hackathons to learn more skills. The industry isn’t yet full of geniuses who are building the surefire next big thing.

But it will be sometime in the near future.

If you’re a technical startup person interested in the space, go out and start turning your AR and VR ideas into reality. While it might not be monetarily successful for you right off the bat, your efforts will undoubtedly help AR and VR technologies move forward. As an added bonus, you’ll become more intimate with the space — which should put you in a great position to claim a big chunk of the market through your subsequent AR and VR efforts.

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First Photo by flickr user UTKnightCenter

Second Photo by Stephen Forte

Fresco Capital Startup Sales Playbook 2016

By Fusion by Fresco Capital, 2nd December 2016

Although each startup is unique, there are many common lessons which apply generally. We’ve saved you the time and bundled together 9 of the best content pieces covering 3 areas of sales:

Hiring and building a sales team
Compensation, culture and motivation
Strategy and tactics

1. Hiring and building a sales team

How to interview sales candidates?

“The challenge in hiring salespeople is that they are often excellent interviewers. They can be confident, persuasive, and engaging.” — Jeff Hoffman

Jeff shares his own experience about what can go wrong along with practical advice about how to improve your interview process. Read more…

What criteria should you use to evaluate candidates?

“Picking people is very similar to picking stocks. It’s so similar that like stocks, it leverages the same methodologies; technical and fundamental analysis. Like stocks or securities you can look for past trends of the candidate and ignore a candidates intrinsic value (technical analysis) or you can look to measure the intrinsic value of the candidate (fundamental analysis).” — Jim Keenan

Keenan goes on to explain the difference between looking at the surface level factors and the intrinsic value of candidates. Read more…

When to hire a VP of Sales?

“Although a new CEO and leadership team typically want to hire a proven VP of Sales from a very successful company, making a “Rolex” hire early in the company development — and paying Rolex prices for the talent — is not the answer.” — Stephen Forte

Stephen explains the alternative way of building your sales team, including the right time to bring on a VP of Sales. Read more…

2. Compensation, culture and motivation

What is the market rate for direct sales commissions?

“Survey results did not point to a significant difference in direct commissions between companies that predominantly use a field go-to-market strategy vs. inside sales. However, the median fully-loaded commission for field sales (12%) was higher than that for inside (10%).” — David Skok

That’s just a sample of the impressive data, charts and analysis in the 2016 Pacific Crest SaaS Survey. Read more…

What about motivation beyond commissions?

“I’m not saying that commissions are inherently bad. What I am saying is that we’ve got many orthodoxies in business that we never examine. One of them is that the only way people will sell is with commissions. That might be true in some cases, but it’s not universally true. Organizations that challenge orthodoxies — of any kind — are the ones that make big breakthroughs.” — Dan Pink

Dan literally wrote the book on this topic: To Sell in Human. You can get a preview in this interview with Matthew Bellows. Read more…

What can go wrong with culture?

“A number of them say they faced a stark choice: Create new accounts by any means possible, or risk being fired for falling short of their sales goals.” — Stacy Cowley

Stacy interviews former Wells Fargo employees about what it was like working under the constant pressure of selling. It’s important to understand how bad things can get with the wrong culture. Read more…

3. Strategy and tactics

What is a sales pipeline?

“Sales pipeline — a term that gets thrown around so much, you’d be forgiven for thinking it’s an empty catchphrase that simply makes salespeople who use it look like sales professionals. But your sales management operations can benefit from using a sales pipeline, and it could make a significant difference to your bottom line.” — Ayelet Weisz

Ayelet covers the specifics of how to structure a sales pipeline to get increased visibility about revenue opportunities. Read more…

Should you go upmarket with a solution sale?

“Understand that you can make 3–20x the revenues on a given enterprise customer with a solution sale vs. a tool.” — Jason Lemkin

Jason reviews the opportunities and challenges of becoming a solution sale if you have larger companies as your customers. Read more…

How should marketing and sales be connected?

“Marketing and Sales alignment isn’t about meeting each other’s gaze; the goal should be to share a common focal point. To achieve true Marketing and Sales harmony, both departments need to turn their focus outside the company entirely — to the customer!” — Jill Rowley

Jill helps you think through the key questions of marketing and sales alignment with thoughtful guidelines for making it happen. Read more…

What other great pieces of sales content would you recommend for startups?

Immortal Lessons from Laozi for Startup Fundraising

By Tytus Michalski, 13th October 2016

The Hard Thing About Easy Things

By Allison Baum, 5th September 2016

An anecdote

I’m a modern girl but I fold in half so easily

When I put myself in the picture of success

Rilo Kiley, “Pictures of Success”

Several months ago, I was attending a conference in Arizona. The venue was on the outskirts of town and the only way I could actually get there was by renting a car. At the time, I had never rented a car before.

By this point in my life, I had already attended Harvard, worked on Wall Street, joined a startup, moved halfway across the world (twice), started a business, built teams, and raised a venture capital fund. All of those things were pretty challenging, yet I was having an immense amount of anxiety about renting a car. Every time I sat down to get it done, I would become paralysed by questions and situational permutations. My mind would run in circles wondering, “Where exactly would I pick it up? What size was appropriate? Which rental agency was the best price? What if I had to return it to a different location than where I picked it up? What if they were out of cars? Where would I park it?” The potential pitfalls were seemingly endless.

Finally, just days before I had to acquire said rental car, I shared my angsty internal dialogue with a trusted friend. She listened, nodded, and then opened my browser to Google and said, “Just do it right now.” Her lovingly intimidating demeanour left me no choice, and I dove into the task of renting this car.

In summary, it took twenty seconds to Google “rental car Arizona”, another ten seconds to compare rates, and another thirty seconds to complete my reservation. Done.

An extrapolation

They warn you about killers and thieves in night

I worry about cancer and living right

But my mama never warned me about my own

Destructive appetite

– Jenny Lewis, “Happy”

To date, renting a car is one of the easiest things I have ever done in my entire life. The only thing that made it difficult was my own questioning, uncertainty, procrastination, and inability to move forward. I was overwhelmed by the number of variables I needed to optimise. But the only variable for which I really needed to account was me.

There are many things in life that are actually challenging. Yet, as humans, we specialise in turning the easy things into a struggle as well. So often, doing something as simple as figuring out what to eat, who to call, or what to Google can feel like such an insurmountable task. However, the difficulty is not the problem itself. The real burden is managing your own perceptions, framing your response, and bringing yourself to action. That’s it. The hard thing about easy things is you.

And managing yourself is actually really fucking hard. Especially if you have a questioning mind, an ambitious spirit, or a beating human heart. We are a constant swirl of emotions, reacting to our current context through the lens of our pasts, and attempting to find the balance between what we need, want, and believe is possible. It’s a lot to navigate, and we often lack the tools necessary to find our way.

A conclusion

Cause it’s a new you every day

Puttin’ on a different face

And the farther that you run from it

How will you overcome it?

It’s a new you every day

– Jenny Lewis, “The New You”

Our current education system is geared toward teaching us information we can use to accomplish tasks. Facts. Events. Equations. These are the easy things. Not only are they easy to begin with, but technology has made their storage, access, and recall infinitely easier. In many cases, all you need is a good friend to open your browser to Google.

Instead, we should be focusing on equipping individuals with the tools they need to manage themselves. This is the hard part. Education should provide you with the aptitude to understand the problems at hand, the awareness to determine what is possible, the ability to break the problem down into pieces, and the strength to get started. This is one of the many reasons why, at Fresco Capital, we are investing in tools for STEM education. Learning to code is not about memorising facts, learning a language, or creating a cool app. There’s much more to it than that. It is about learning that you are in the driver seat, and providing you with the processes you need to break things down and move forward, piece by piece. After all, that’s the only way to get through the hard parts.

When to Hire A VP of Sales

By Stephen Forte, 31st August 2016

My personal experience and more recently working with Fresco Capital’s startups has taught me that no matter how different each business and start-up process might be, nearly all new co-founders and CEOs eventually pose the same important, inevitable question: When do I hire a VP of Sales?

My response is always the same: When you really need one.

So, what does that mean?

Co-Founder and CEO Talent and Time Management

Most co-founders and early CEO’s prefer to focus their talent and energy on conceiving and building the new enterprise. The most successful CEOs come from backgrounds in finance and operations. Only 20% of Fortune 500 CEOs started out in Sales or Marketing.

Yet many company leaders also necessarily take on the crucial task of generating those early sales. While a CEO may excel at creating connections and relationships, few are sales experts and are typically overwhelmed with the task’s time commitment. So, during start-up and initial operations, when CEOs think in terms of building the company by building a stellar leadership team, they want to pass on those vital sales responsibilities as quickly as possible to a proven sales expert. After all, a good leader should hire other good leaders, right?

Not yet.

This Is Not The Time to Buy The Rolex

Although a new CEO and leadership team typically want to hire a proven VP of Sales from a very successful company, making a “Rolex” hire early in the company development — and paying Rolex prices for the talent — is not the answer. In fact, poaching an expert VP of Sales by offering a sizeable opportunity and compensation package is counterproductive.

Here’s why.

An extremely successful VP of Sales has become successful because they effectively manage a sales force. A new VP will want to replicate that success by building their new sales team and developing a sales process, complete with expensive sales automation tools. In the long term that is exactly what your company needs. In the short term, however, that is a potentially dangerous waste of resources for your new company during a crucial period. (Yes, I am saying that Google Sheets is a perfectly good CRM at this stage.)

While the VP of sales is putting together a team and developing long-term strategies, nobody is focusing on making actual sales. Lots of money going out, none coming in. The results can be disastrous. The VP of Sales and the team are either fired, quit, or the company runs out of money.

Build Your Sales Team from the Bottom Up

There is a much better option. Build your sales team from the bottom up.

It may feel counter-intuitive, but the bottom up process is more logical and practical for new companies. It makes much more sense to hire a junior salesperson – someone who will one day report to the VP you eventually hire.

The junior salesperson is expected to be out there making contacts and making sales, which is – at this point in time – what the company needs. Look for someone in the industry with knowledge and experience, demonstrated success, and capacity to learn.

I know that the CEO is eager to offload the sales process, but recognize you will need to spend time mentoring your new hire, and plan to give them at only 25% of the labor the first month or two. Don’t expect them to do all your sales work — understand that the CEO may still want — or need – to close these early, important deals and the new hire will only shadow the CEO for the first few weeks, growing into the role.

The point is that a co-Founder or CEO should be doing primarily what the CEO alone can do — especially in sales.

After the salesperson starts to take over more and more responsibility and sales start increasing, hire another junior salesperson and start slowly building your team. Most importantly, keep the team focused on generating sales. At this point, allow the team to start building a sales process and choose some tools that fit your environment.

Now You Need A VP of Sales

So, when do you hire the VP of Sales?

The answer is simple: Hire your VP of Sales when you’re generating enough sales for a VP to manage and your process is starting to strain at scale. That’s when you really need one.

That’s when it makes sense to hire a mega-talented VP of Sales with exactly the qualities and skills you need. That’s when you’re ready to recruit a proven, effective leader, someone qualified to create the big vision, continue building a sales force, make the strategic long-range plan, and facilitate the team’s success.

And that’s when you can afford to invest in the best VP of Sales you can find.

In the meanwhile, the “Bottom Up” strategy is a better short-term approach in terms of all primary company resources – money, staff, time- and it leads directly to stronger company success in the long term.

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