When one is truly committed…

Daryl Hatton Entrepreneurship

We have been doing some in-depth research (good work Nat!) on our potential market and finally see both the massive opportunity in the market and the breadth of competition we face. While the second aspect is certainly frightening it was also very reassuring; the existence of competitors who are more than just startups proves the existence of a market.

Our original hope was to find more of a “green field” with fewer competitors and hopefully therefore an easier time for our startup company to establish a presence. Unfortunately, there are not as many big “green fields” around any more and the ones that are there tend to be small and difficult to exploit.

Not having found a green field, we had to take a critical look at the market in front of us and ask the question, “Can we be successful here?” It is clear there is money to be made in this market. It appears to just be a matter of figuring out “how”. We think we know but won’t really “know” until we test it out.

Mid last week it became obvious that it was time for us to “go big or go home” and take some next steps in this process. I decided we needed to take a deep breath, jump in and start to develop the software. It is fair to say this indicates we upped our level of commitment.

There is a famous quote that I really admire:

Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative (and creation) there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: That the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would have come his way. I have learned a deep respect for one of Goethe’s couplets: “Whatever you can do, or dream you can, begin it. Boldness has genius, power and magic in it.”     –  W. H. MURRAY THE SCOTTISH HIMALAYAN EXPEDITION

I made up my mind to go ahead on Wednesday night. Thursday night I received a cryptic note from one of our advisors asking if I needed any developers. A quick phone meeting on Friday unveiled how I might be able to acquire the services of some good quality developers “real fast”.  Another quick meeting on Monday and we bashed out a structure for making it work. A longer meeting on Tuesday and we kicked off the project “conceptually”. A little back-and-forth with a contract and we should be good to start in earnest on Monday.

What do I get? A “known-quantity” development team with great skills that I need (including Facebook experience!) for a very good price without the risk and complications of hiring them directly. I get them for a short term (of my choosing) but with the possibility of extending the contract if everything goes well. I also get a chance to help out a company that I advise keep the lights on until their next tranche of fundraising comes in.

It appears to be a big win for everyone. In our case, I think it is going to help us bring a product to market perhaps two months faster than it looked like a week ago and will also make it much easier to move ahead with acquiring additional investment to help us build out my vision for the company.

What did it take to make it happen? Simply deciding to “get on with it” unleashed the river of positive events.

Ain’t magic wonderful! Note to self: do this more often…

Breaking eggs

Daryl Hatton Health, Personal

The saying goes “you have to break some eggs to make an omelette”. Right now I’m feeling the cracking…

I had a car accident in 1987 where I stopped a flying Camero with my forehead. It was a little hard on my body and particularly my neck / shoulders. I’ve been dealing with that continuously since then with mixed results


When I take care of myself, life is generally pretty good. When I fall off the horse, life gets a little uncomfortable. I get very dizzy, suffer a constant low level headache which sometimes spikes up dramatically, the pain in my neck becomes very distracting and I have very low energy – so low that I sometimes almost fall asleep while sitting at my desk. The solution seems simple; stay on the horse. However, this horse is expensive in many ways (time, money, etc.) and riding it can be difficult…

A few weeks ago I restarted my exercise program with a very good friend of mine Donna Stephenson. Donna is a master of Pilates and the fittest “older” person that I know. She works with me to very carefully strengthen and stretch the muscles in my back and neck (and legs and abs and arms and toes and …)

We worked together on my fitness program about two years ago and had great results. Unfortunately, life got complicated for both of us – a disk degenerated in her lower back (genetic) preventing her from working and I had to take some time off to sell Optio and wrap up that segment of my life. Falling off my regime and exacerbating the problems with my back by spending many, many hours in really bad airplane seats didn’t help.

Donna has fixed her back and Optio is gone. While I appreciate that I’m on the right track with restarting this program, I have to admit that today it is really getting me down. Going to the workout is fantastic. I always feel really good after I leave. But over the course of the few days in between sessions, my muscles get stiff and sometimes exaggerate the symptoms I’m working to relieve. Right now I feel like I have a knife in my left shoulder, it feels like I have a curtain partially lowered over my consciousness and my back is very stiff.

I’m heading down for some shiatsu in a few minutes to relieve the stiffness. I expect I will feel lots better after that. I just cringe at the cost of all this in both lost productivity (I’m in the middle of starting up a new business and can ill afford the lost time) and in money paid out while I don’t have an income.

What I know about me is that I have a relatively “clean” attitude towards all this. I’m happy to be alive; remembering the accident makes it very easy to appreciate even some of the simplest things in life. But sometimes (like once every few years) I take the time to really acknowledge the impact of this event on my life. That includes telling myself the truth about the pain I feel and why it is there. When I “re-acquaint” myself with this, it makes it much easier to get on with solving the problem and doing the work to make myself feel better. Somehow it “justifies” spending precious time and money on it.

Doesn’t that say something interesting about my sense of self worth…!

I would have made it shorter…

Daryl Hatton Entrepreneurship

… but I didn’t have the time.

This famous quote from Mark Twain comes to mind from time to time when working on important documents. This weekend I’m again amazed at how long it takes to make a good 15 minute twenty slide PowerPoint presentation. Throwing together twenty slides of dense text bullets is easy. Forty is easier! Getting twenty graphical slides that succinctly and effectively communicate precisely the right amount of the right information is a daunting and time consuming task.

Figuring out what information is most important to the target audience is tough at the best of times. It is even tougher as an entrepreneur who wants to demonstrate that our team has thought through all the angles on all our key strategies and therefore prove that we know what we are doing. My natural inclination is to dump tons of information on the recipient. However, anyone who has sat through or fallen asleep in a presentation like this knows how badly it fails.

PowerPoints with lots of text-only slides are the kiss of death on the fundraising circuit. But finding or creating graphics that communicate complex topics like Software-as-a-Service and social networking in a single glance is not easy even with all the power of Google at my fingertips.

Enough whining for tonight. I’m happy to say that after quite a few hours, I have five slides done.

More fun tomorrow!

Why to Start a Startup in a Bad Economy

Daryl Hatton Entrepreneurship

This article appeared on Paul Graham’s blog.

I think it agrees strongly with my point of view that good companies can start and thrive in any economy. Bad economies are in many ways a tailwind that helps propel us (i.e. good companies) forward because it keeps the “silly people” from starting bad businesses that destroy the value in the market.

The article is quoted below. To leave comments with the original author, click his comments link at the end.

The economic situation is apparently so grim that some experts fear we may be in for a stretch as bad as the mid seventies.

When Microsoft and Apple were founded.

As those examples suggest, a recession may not be such a bad time to start a startup. I’m not claiming it’s a particularly good time either. The truth is more boring: the state of the economy doesn’t matter much either way.

If we’ve learned one thing from funding so many startups, it’s that they succeed or fail based on the qualities of the founders. The economy has some effect, certainly, but as a predictor of success it’s rounding error compared to the founders.

Which means that what matters is who you are, not when you do it. If you’re the right sort of person, you’ll win even in a bad economy. And if you’re not, a good economy won’t save you. Someone who thinks “I better not start a startup now, because the economy is so bad” is making the same mistake as the people who thought during the Bubble “all I have to do is start a startup, and I’ll be rich.”

So if you want to improve your chances, you should think far more about who you can recruit as a cofounder than the state of the economy. And if you’re worried about threats to the survival of your company, don’t look for them in the news. Look in the mirror.

But for any given team of founders, would it not pay to wait till the economy is better before taking the leap? If you’re starting a restaurant, maybe, but not if you’re working on technology. Technology progresses more or less independently of the stock market. So for any given idea, the payoff for acting fast in a bad economy will be higher than for waiting. Microsoft’s first product was a Basic interpreter for the Altair. That was exactly what the world needed in 1975, but if Gates and Allen had decided to wait a few years, it would have been too late.

Of course, the idea you have now won’t be the last you have. There are always new ideas. But if you have a specific idea you want to act on, act now.

That doesn’t mean you can ignore the economy. Both customers and investors will be feeling pinched. It’s not necessarily a problem if customers feel pinched: you may even be able to benefit from it, by making things that save money. Startups often make things cheaper, so in that respect they’re better positioned to prosper in a recession than big companies.

Investors are more of a problem. Startups generally need to raise some amount of external funding, and investors tend to be less willing to invest in bad times. They shouldn’t be. Everyone knows you’re supposed to buy when times are bad and sell when times are good. But of course what makes investing so counterintuitive is that in equity markets, good times are defined as everyone thinking it’s time to buy. You have to be a contrarian to be correct, and by definition only a minority of investors can be.

So just as investors in 1999 were tripping over one another trying to buy into lousy startups, investors in 2009 will presumably be reluctant to invest even in good ones.

You’ll have to adapt to this. But that’s nothing new: startups always have to adapt to the whims of investors. Ask any founder in any economy if they’d describe investors as fickle, and watch the face they make. Last year you had to be prepared to explain how your startup was viral. Next year you’ll have to explain how it’s recession-proof.

(Those are both good things to be. The mistake investors make is not the criteria they use but that they always tend to focus on one to the exclusion of the rest.)

Fortunately the way to make a startup recession-proof is to do exactly what you should do anyway: run it as cheaply as possible. For years I’ve been telling founders that the surest route to success is to be the cockroaches of the corporate world. The immediate cause of death in a startup is always running out of money. The cheaper your company is to operate, the harder it is to kill. Fortunately it has gotten very cheap to run a startup, and a recession will if anything make it cheaper still.

If nuclear winter really is here, it may be safer to be a cockroach even than to keep your job. Customers may drop off individually if they can no longer afford you, but you’re not going to lose them all at once; markets don’t “reduce headcount.”

What if you quit your job to start a startup that fails, and you can’t find another? That could be a problem if you work in sales or marketing. In those fields it can take months to find a new job in a bad economy. But hackers seem to be more liquid. Good hackers can always get some kind of job. It might not be your dream job, but you’re not going to starve.

Another advantage of bad times is that there’s less competition. Technology trains leave the station at regular intervals. If everyone else is cowering in a corner, you may have a whole car to yourself.

You’re an investor too. As a founder, you’re buying stock with work: the reason Larry and Sergey are so rich is not so much that they’ve done work worth tens of billions of dollars, but that they were the first investors in Google. And like any investor you should buy when times are bad.

Were you nodding in agreement, thinking “stupid investors” a few paragraphs ago when I was talking about how investors are reluctant to put money into startups in bad markets, even though that’s the time they should rationally be most willing to buy? Well, founders aren’t much better. When times get bad, hackers go to grad school. And no doubt that will happen this time too. In fact, what makes the preceding paragraph true is that most readers won’t believe it—at least to the extent of acting on it.

So maybe a recession is a good time to start a startup. It’s hard to say whether advantages like lack of competition outweigh disadvantages like reluctant investors. But it doesn’t matter much either way. It’s the people that matter. And for a given set of people working on a given technology, the time to act is always now.


Daryl Hatton Personal

I originally put this on the FundRazr blog but it is better here.

I’m a lucky man in so many ways (including the fact that I know this).

Today is the day to acknowledge what we are thankful for. Actually, every day is but we only put the label on this one.

In that spirit, I’m thankful all the time for all these things (in no particular order)…

  • My good health
  • My good fortune
  • My wife
  • My kids
  • My father and mother
  • My brother and sister
  • My extended family
  • My hyper-extended family of close friends from all around the world
  • My business friends who support me in good times and in bad
  • My house and home – it provides me comfort, shelter and a base for my world exploration
  • Vancouver, its beauty and its vibrancy (and its great restaurants!)
  • Canada, its safety, honor, fair play and boundless opportunities for building a business and a better life
  • Sunshine, rain, breezes, calm
  • Laughter, tears, hugs, kisses, holding hands, walking side by side
  • The joy from helping people achieve things large or small
  • Going away, coming home
  • Magic – it’s everywhere if you pay attention and let it happen
  • My good luck
  • Lots and lots and lots and lots more…

This Thanksgiving, I feel particularly full – and the wonderful family dinner at Kate’s is not for five more hours!

Lucky me…

In the beginning…

Daryl Hatton Personal

… there was an empty page. And it needed to be filled. Not because the page had any agenda of its own but simply because Nature abhors a vacuum and will always rush to fill one.

One great way for me to get something going in my life is to open up new “space” and see what happens. That is what I’ve done with my blog and this first entry.

Why start with this picture?

Simple. I took it and it is the best Nature picture I’ve done. This is a photo of a place near where I live that I love to go to.

But as I selected it, I realized it has more meaning than that. In fact, it is a great representation of the purpose of this blog.

This river comes crashing down the mountain, full of power, making lots of noise, moving at times with purpose and sometimes with wild abandon, bouncing off obstacles in its race to the ocean.

But at various places along its journey it takes time to rest and reflect. At the spot in this photo, it settles quickly into a set of deep, quiet pools, surrounded by sheer rock cliffs and illuminated by sunlight bouncing off the rocks beneath its surface. No longer racing ahead, it ambles along, twisting this way and that, the power still present but subdued and much more forgiving.

The thrashing opacity and roar of the rapids is gone and it is possible to see how wonderfully crisp and clear the water really is in the quiet that settles over the surface. After a little while, the river will gather its strength and speed again to resume its mad dash. But during its time in these pools, it allows others to see through it and, in fact, welcomes them to play with it. Children and adults jump off the cliffs above into the deep clear pools, confident they can see any dangers lurking beneath the surface. It is a restful yet playful place for both the river and all those who love it. I’ve learned many things about myself and others in this place.

Like the river, I rush through many parts of my life, bouncing from challenge to challenge, and opportunity to opportunity, my head filled with a powerful churn of ideas, my space filled with the roar of conversation and human activity. But in recent times, I’ve learned I need to occasionally slow right down, let the rapids and whirlpools of my thoughts subside and the cacophony of my activity fade away. It is during these times that I get the greatest clarity of who I am, how I am and even perhaps why I am.

My intent with this blog is to give myself a place to share a little of what I see and feel when I enter this “space” and some of the other less contemplative places in my head. What I say may be quiet and accommodating or it may be loud and aggressive. Whatever the case, I sincerely hope it will be transparent; that you will be able to clearly see what I’m saying and any agenda I may have in saying it. Time will tell how successful I’ll be.

Let me know what you think.

P.S. This piece was the first blog post I ever wrote. It was originally posted April 28, 2006 on my Blogger site which was called “The View From Up Here” and is now shut down.