Dave McClure: A great leader for Boston founders
Yesterday, I had the pleasure of hearing Dave McClure speak twice in Cambridge: First, at Dogpatch Labs, and later, at the MIT Stata Center. If you don’t know of Dave, he describes himself as “a sh***y coder in the ’80s, a crappy entrepreneur in the ’90s, a decent startup marketer, and a pretty good angel investor.”
If you were unable to attend either of the events, you can watch them at the bottom of this post in a pair of videos courtesy of our pals over at DartBoston.
If you are a softy when it comes to bad language and keepin’ it real, then Dave’s talks probably aren’t for you. After a year full of stodgy, white-haired, B.S. “networking” events here in the Bay State, I have to say hearing Dave mix in a few F-bombs with truly insightful “Web 2.0″ startup advice was a breath of fresh air.
Over the past nine months or so, there has been a startup “renaissance,” to quote Oneforty founder and CEO Laura Fitton from yesterday’s panel at the Stata Center. There have been plenty of events, mixers, “unconferences,” panels, blog posts, Tweets and a general tech-crazed orgy around re-energizing the startup economy here in Massachusetts.
Our team here at Pinyadda and BostInnovation recognizes that motion doesn’t necessarily signal progress, but we think that most of this stuff is really helping to nurture a wave of successful companies in the area. However, even with all the excitement and activity that has been percolating, the general theme of every event I go to tends to be about how there is no angel money to be raised in Boston.
While I agree that there is a dearth of Ron Conway- and Dave McClure-esque web startup “super angels,” there is still angel money to be had in the area. (We will be covering a number of companies on BostInnovation in the next few weeks who have raised angel money). I don’t have any hard numbers on how many companies have raised some sort of angel or seed financing, but we need to move our focus from whining about how the rich old guys in the area don’t understand Twitter and won’t open their wallets for young, inexperienced entrepreneurs. There is a group of people who, instead, are focusing on the things Dave McClure talked about at length at Dogpatch labs yesterday, which can be summarized in the following bullets:
- Don’t write a business plan; start building something with no capital and see if it works.
- If it works, put it out there and see if people use it.
- Once there are new users coming to site/app relentlessly focus on seeing what features they use or don’t use and iterate constantly until you have something that is retaining a small user base.
- Once you have people coming back to use your product regularly, focus tenaciously on a few marketing funnels to scale your user base and begin to figure out the appropriate balance between acquiring and monetizing users.
In reality, this methodology can be executed on the cheap.
Founders shouldn’t expect VCs to open up their checkbooks to fund this early activity because: 1) Founders should be able to do it without VC money. 2) VCs have bigger problems to worry about. And 3) many VCs in the area seem to sit on the sidelines because they don’t understand the importance of product and design issues as the foundation for successful marketing and growth. If VCs do see the importance of product development with regards to its effect on later-stage marketing, many want to wait to invest in order to mitigate product risk. Even after a company shows user traction, some East Coast VCs still expect to see an appropriate balance between a company’s cost-per-acquired user and the ability to monetize those users.
The only thing we web startup founders can hope for from VCs in the short term is that more of the East Coast firms look to do a larger number of small investments in early stage companies, and that they start following Dave McClure and others who focus on critical early-stage metrics rather than imaginary revenue projections. In the long term, if Boston founders continue to make products people use, help test one another’s products, and band together to share expertise, hopefully we will be able to educate more people in the community about early-stage investing, with some top-down assistance from VCs, in order to fuel more companies past the initial, most difficult stages.
To quote Laura Fitton, again from last night, we need to start “drinking for a living” more. We need to make the community more open and far more casual — rather than devoting time and resources to crafting formal pitches and attending stale networking events. Let’s just drink some beer and get to know one another.
MIT Enterprise Forum video by DartBoston
Dogpatch Labs Talk video by DartBoston
Disclosure: Chase Garbarino is the Creator of BostInnovation and the CEO of Pinyadda.
What do you think about this method of creating web properties? Let us know in the comment section.
Tags: Angel Investors, Dave McClure, Edu
