I decided to make the trek out to Berkeley to check out this year’s Startup School (and to let it serve as a serious peptalk–it’s working).  Startup School has been held since 2006 by the folks behind Y Combinator, a venture capital firm that specializes in funding early stage startups.  Teams can raise up to $20,000 and get advice from and connections to some of the top folks in startups.

Speakers this year were: Paul Graham, the founder of Y Combinator; Chris Anderson, the editor of Wired and author; Jason Fried, founder of 37 Signals; Tony Hsieh, CEO at Zappos; Greg McAdoo, partner at Sequoia Capital; Biz Stone & Ev Williams, founders at Twitter; Paul Bucheit, founder of FriendFeed and creator of Gmail; Mitch Kapor, founder of Lotus and creator of Lotus 1-2-3; and Mark Zuckerberg, the founder of Facebook.

Paul Graham (Founder of Y Combinator)

Paul Graham started off the morning rehashing his list from the essay What Startups Are Really Like.

Greg McAdoo (Partner at Sequoia Capital)

McAdoo showed up as the lone VC in the group of presenters and gave practical advice on getting users and pitching VCs.

• Prefers personal introductions rather than pitches out of the blue.  He recommended contacting the founders of companies he’s funded and asking them to introduce you to him.  Left the audience with email address (mcadoo at sequoiacap dot com), however.
• Do your research on who you raise money from (due diligence goes both ways).
• Focus on disruptive market opportunities.  ”The cost of penetrating an incumbent market is higher during a recession.”
• Sequoia wants big markets.  They’ve funded the likes of Apple, Cisco, Google, PayPal, and the list goes on.

Jason Fried (Founder at 37 Signals)

I’m personally biased  toward thinking a lot of Jason’s talk since I identify with most of the stuff he’s already said elsewhere. First off, contrary to the whole idea of Y Combinator, Jason’s a fan of self-funding startups. He highlighted two differences between bootstrapped companies and funded companies, i.e., a bootstrapped company looks to make money while a funded company looks to spend money. Furthermore, Jason says being a bootstrapped company helps you get used to making money in the first place. It’s a skill. On that note, Fried said, “The more you practice, the less difficult it will be.”

More high points:

• “Planning is guessing, so then you can take it a little less seriously.”  He’s never been a fan of business plans or extensive design documents.
• “Software has no edges–software is not affected by physics. Nothing pushes back and it will start expanding over time. We (developers) need to be the edges. Keep things out of your software.”  This goes back to 37 Signals’s book, Getting Real–specifically, Start with No (Make features work hard to be implemented).
• “You can’t make just one thing: everything you make has a by-product.” 37 Signals has made a juicy side business out of selling what they know and most of the time that content comes straight from their blog. He gave the example of sawdust and how it used to be a waste product. Now, it makes up plywood and the bedding for guinea pig cages. Everything has a by-product. Monetizing that stuff goes back to making money and how “the more you practice, the less difficult it will be.”
• “USEFUL > Innovative”  Don’t put something out just because it’s cool, but really doesn’t add any value.
• “Someone anointing you to be successful is bullsh-t!” Explains why he didn’t take investment in 37 Signals until much later in the game.
• “Failure is not a rite of passage.”  You don’t necessarily have to fail.  Fried goes on further to say that, “What you learn from your mistakes is not as valuable as what you learn from your successes.”  Whether we’re talking about life or startups, I think he’s both right and wrong, i.e., my time in college is littered with failures that I learned more from and now appreciate more than if I’d been successful in those same situations.  Each case is different.
• On pricing, he asks the simple question, “Would I pay for it?”  That doesn’t help fully determine the price, but it’s a good way to figure out if you have something people would pay for.
• “Price forces you to be really damn good.”
• “People say 9/10 businesses fail, but what does that have to do with you? Those are their failures.”  I liked this as a kick in the head not to take too much to heart what people say about failure in business.  People like to scare with statistics, of course, but why not shoot to be the one that doesn’t fail?

Chris Anderson (Editor in Chief at Wired)

Anderson has really been a huge advocate lately of giving stuff away–not to the point of becoming a non-profit, but instead, offering free products in order to get people hooked enough to pay.  Obviously, it’s not a new idea, but it’s one startups have really come to embrace.  Fred Wilson coined the term freemium for that idea back in 2006.

In Anderson’s eyes, free users are not freeloaders.  Instead, free users are a way to expose apps to the widest possible audience.  The goal then, is to find a way to get people to pay for a better version of the app (or whatever is being sold) once they’ve fallen in love with the free version and need something it doesn’t offer but other paid versions do.

What will people pay for?  According to Anderson:

1. People will pay to save time.
2. People will pay to lower risk.
3. People will pay for things they love.
4. People will pay for status.
5. People will pay if you make them (once they’re hooked!).

Then, he launched into a list of freemium models.

1. Feature-limited: the free version is actually useful, but has some limitation that encourages power users to convert up to a more useful/flexible version.
2. Time-limited: really easy to do, but doesn’t encourage commitment since users get cut off after the trial period is over.
3. Capacity-limited: think storage services where you get 2GB or so for free and then once they’ve hooked you into storing that much, you upgrade to a higher capacity account.
4. Seat-limited: charge on a per user basis.  It’s easy to do, but encourages cheating.
5. Customer class-limited: easy to do, but hard to enforce.  Gave the example of Microsoft’s BizSpark which gives away all of Microsoft’s software free to startups that are writing software, privately held, less than three years old, and generating less than $1M in revenue annually.

Anderson wrote the book Free: the Future of a Radical Price and the audiobook is available here (285MB Zip file)…for free-99.

Paul Bucheit (Founder of FriendFeed, creator of Gmail)

Bucheit winged things a bit and gave his life story.  I was most moved by his advice: “It’s important to do things that make you feel uncomfortable.”  Cliché, but I figure some of the most basic truths always seem that way after a while.

Biz Stone & Ev Williams (Founders of Twitter)

True to form, the guys took questions from the audience via Twitter after going on for a few minutes about how Twitter got started, technical issues (it’s a joy to see the Fail Whale a lot less these days!), and things they’ve found to be surprising about Twitter.  Biz talked about being surprised about how Twitter influences people’s movements at times, i.e., a guy tweeted about one bar being too crowded at SXSW and that he was going to another bar.  Thanks to having tweeted about it, everyone crowded into the bar he was going to.

Mark Zuckerberg (Founder of Facebook)

His session was an interview format with Jessica Livingston rather than prepared remarks.  A lot of his session was rehashing how Facebook got started, etc.  Zuckerberg dropped a few gems later, though, including:

• “Eventually you get judged not by how things look, but the value you provide to people.”
• “The biggest risk you can take is no risk at all.”
• “Don’t make the mistake of trying to be too perfect.”
• Figure out what users want more of from what they’re already doing on the site.

Mitch Kapor (Designer of Lotus 1-2-3)

Talked about company culture and how startups can be horrible in that regard, i.e., research shows that startups have more public humiliation and bullying than regular companies.  Kapor also emphasized the idea of a “Meritocracy vs. a Mirrortocracy.”  He thinks that startups often confuse talent with “people like us.”  In some respects, that’s a whole ‘nother post, but for another day.  Kapor also implored founders to “Walk the walk yourself–mind the gap between stated values and actual practice.”  There’s a Wall Street joke in there somewhere…

Tony Hsieh (CEO of Zappos)

Hsieh talked about customer service, company culture, core values, and positive psychology.  His talk was different in that he deeply emphasized the soft aspects of running a business instead of the usual pontifications on just profits.  On vision, he said: “What you’re thinking, think bigger.”  Then, he asked the audience, “What is your goal in life?”  and “What would you be happy doing for the next 10 years even if it didn’t make a dime?”  On values, he talked about the concept of “committable values,” as in “values that you’re willing to hire and fire people based on.”  For Hsieh, at the end of the day, Zappos is not about delivering shoes, but about “delivering happiness.”

Finally, he recommended a few books:  Good to Great and Tribal Leadership (the audiobook is available for free from Zappos’ website).  Also, Zappos publishes a book about company culture.  Gave his email address (ceo at zappos dot com) which you can use to ask for a free copy.  Slides from his talk are available here.

Mark Pincus (CEO of Zynga)

Pincus was the last up and gave a talk about being a world-class CEO.  Some high points:

• “Who gives a sh-t what your valuation is–only your ego!”  This one hit home not because of having to worry about a valuation right now (I struggled for while myself with how valuable I thought anything I’d done might be), but because it reinforced the idea of not doing things for that very reason.  CEOs and big heads don’t mix.
• “An internet treasure is something where consumers can’t imagine what life was like before it.” Google and most things they put out come to mind here.  Strive to create something of that calibre.

Overall, it was a great event that served as a nice pep-talk en masse.  And funniest of all, the peer pressure is building up to move to San Francisco, but we’ll see what happens.

Editor’s Note:  Twitter and Y Combinator just announced a partnership for start-ups using the API, they have a similar partnership with Justin.tv, check out the full coverage about the RFS (Request for Start-up’s) and RFS extension over at TechCrunch.

Not long ago we posted about a private event in the Valley about raising capital that we were able to giveaway spaces to a few of you.  The panel was moderated by Jay Ward and featured Ron Conway, MC Hammer and Brian Patterson.  Five slots were held for Black Web 2.0 readers and we gave four away.  Wesley Michel was one of the four.  He is working on launching a real-time app for local markets.  Here is his first person account of the event:

Ron, kicked the event off explaining his vision and interest in the real time web space. His vision is that he believes that the data behind the real time web along with social media can one day lead to a multibillion dollar industry. His vision stems from the idea that a successful company in this space can utilize the data and present it in a meaningful way as Google did for web search and one day that same company can be just as powerful as Google is today.

The night was very informative with topics ranging from raising capital to protecting intellectual property with patents, and ideas about monetization and the best time to seek investments.

People that attended the event ranged in different industries from high tech to medicine.

Mc Hammer, was a quest at the event, he provided insights on the early stage investments that he participated in and his vision for the value of social media as the new medium.

The highlight of the evening came for me in the moment of Q&A where learned that most entrepreneurs felt the same pain in raising funds and felt that both MC Hammer and Ron both addressed those questions with ideas and innovative ways in which early stage companies do today.

As a company in the real time location based services space I not only gained key insights in the industry but contacts that have the potential to advance our company as well. Overall the event was very interesting and I look forward to another event in the near future.

Jay Ward also shared key points that were learned from the panel:

• The real-time web is vastly more interesting and complex, consisting of what people’s thoughts and views are on an infinite number of topics throughout the world.  There’s a fortune to be made and a lot of value to be created in technologies that harness the trove of content being created on Twitter, Facebook and other social networking platforms.
• Conway stressed the importance of team and chemistry in looking at investments.  He said the most important thing he looked for in a deal is whether he can get along with the entrepreneur.  He said that business models change all the time and he looks for entrepreneurs that he can ride through the bad times with, as well as the good.
• Hammer stressed the importance of momentum.  He commented that MySpace’s audience, while currently larger than Twitter’s, is contracting, not expanding.  Twitter, on the other hand, is seeing a hockey stick growth curve.  All entrepreneurs should aim to show metrics that illustrate such meteoric growth.
• Both Conway and Hammer emphasized the importance of being networked in order to get connected to angel money.  Conway and his team review 1,500 proposals a month.  Only the ones that get referred in realistically have any chance of getting funded.

Copy. Paste.

As if that wasn’t enough to feel like you were actually there take a look at some of the pics from the evening:

Audience Getting Ready

Panel Getting Ready

Jay Introducing Panel

Presentation

Ready to Learn

Panelists

Ron Conway Speaking

Audience taking it all in

What an engaged audience

Hammer dropping more knowledge

And the info doesn't stop flowing...

Let the networking begin

(Courtesy of Tyler New Media, BlackandMarriedwithKids.com)

World renown business innovation scholar and entrepreneur, John Sibley Butler, will be honored with the Tech Innovation Special Achievement Award at the Tech Innovation Awards on Wednesday, October 14 in Austin, Texas. Butler is the director of the University of Texas at Austin’s IC² Institute.

John Sibley Butler has been called the “godfather” of Internet startups because of his advocacy of business that is technology focused. He holds the Gale Chair in Entrepreneurship and Small Business in the Graduate School of Business (Department of Management). He is the director of the Herb Kelleher Center for Entrepreneurship and the director of the Institute for Innovation, Creativity and Capital (IC²). His special achievements include a business plan competition for student tech entrepreneurs; management consultant for State Farm Insurance, the U.S. Military and other firms; he is affiliated with Babson College as a teacher who is engaged in the creation of an incubator/business accelerator as well as active in the technology transfer for that region; he has authored four books on business, race and leadership; and his research has been featured in publications such as The Wall Street Journal and The New York Times.

The decorated Vietnam veteran received his undergraduate degree from Louisiana State University in Baton Rouge, and his doctorate from Northwestern University in Evanston, Illinois.

IC² (Innovation, Creativity and Capital) is a think “and do” tank that specializes in bringing solutions through discourse. It is also the home to several world-recognized programs such as the Austin Technology Incubator, the Digital Media Collaboratory, and a Master of Science in Technology Commercialization degree program.

The Tech Innovation Awards is sponsored by Acton MBA in Entrepreneurship, Central Texas Angel Network,  Austin Technology Council and Entrepreneurs’ Organization.

Blogalicious Weekend makes it debut in Atlanta tonight with two of BlackWeb20.com’s best: founder/publisher Angela Benton and legal columnist Latoicha Givens. Both will join hundreds of female bloggers of color for the first event celebrating our unique presence in the blogosphere.

Angela will be seated as a panelist in the breakout session, Upgrade You: Taking Your Blog to the Next Level. And Latoicha will be seated on the panel, Possibilities and Pitfalls of Having YOU on the Net. Both sessions will take place on Saturday, October 10.

Authors Denene Millner and Nelson George will be there as well as corporate marketing reps and a few other surprise guests.

The conference closes on Sunday, October 11.

BlackWeb20.com isn’t sponsoring a “bring a buddy” bus trip to this conference and we’re not endorsing it, but have to admit that it is awfully smart. Huh? Watch the promo and take notes. This is our present and in the message conveyed in this video is our future.

I’m indulging my tech crush on Guy Kawasaki who talks to blogger Zadi Diaz about the beginnings and mechanism of Alltop.com. Guy (sigh) also discusses everything from his background in technology to the future of new media. I love his suggestions for PBS.

BET Networks announced it has secured several partners in support of their award-winning 2009 Black College Tour, including such high-profile brands as Microsoft, Microsoft XBox, and Verizon Wireless. The 2009 BET Black College Tour, the largest and only tour of its kind, returns to 14 historically Black college and university campuses across the country for the eighth consecutive year. Together with its key marketing partners, BET will bring a day of entertainment, games, contests, product samples and consumer information exclusively for college students.

The BET Black College Tour is a highly impactful initiative on college campuses,” said Michelle Garner, Vice President of BET Consumer Engagement. “This year, we’ve expanded the range of partners and opportunities we’ll be presenting to the students to provide them with an even more engaging, relevant and lively school event.

In addition to the sponsored activities, BET Digital will engage the students in “Digital Karaoke,” BET Off-Channel Marketing will have a game tent to promote BET’s fall programming slate, and BET’s pro-social initiative Rap-It-Up will be onsite to provide free testing for HIV/AIDS. Inroads will be onsite to speak with students about internship opportunities at major companies.

The tour begins today at Miles College.

2009 Black College Tour Schedule

  Miles College                                        Wednesday, September 2

  Delaware State University                      Wednesday September 9

  Morgan State University                         Friday, September 11

  North Carolina A&T State University        Friday, September 18

  Alabama A&M University                       Friday, September 25

  Jackson State University                       Friday, October 2

  Fayetteville State University                   Wednesday, October 7

  Winston-Salem State University             Friday, October 16

  Florida A&M University                          Wednesday, October 21

  Grambling State University                     Friday, October 30

  Xavier University                                    Wednesday, November 4

  Southern University                               Friday, November 6

  Texas Southern University                     Wednesday, November 11

  Prairie View A&M University                   Friday, November 13

Quincy Jones is the cat who performed with some of the greatest names in music, produced some of the hottest music for some of the hottest musicians; most recently and notably Michael Jackson. He is the founder of Vibe magazine who found the perfect formula of bringing together multiple genres of music with a focus on the vibe and less on the difference. Do you think I’m a fan? I am. Yet I have to admit that he just earned a zillion cool points for keynoting at SxSW and demonstrating that older doesn’t mean antiquated and out of touch. He gets it and I like that. Listen to him dish on Napster and the future of music in the digital age.  “Baby, the train is on the way…” (Watch the video to see what that means.)

The DJ and radio host (KCRW) credited with jump starting the careers of Van Hunt, Dwele, Jill Scott, Kelis and Gnarls Barkley and creating the genre “urban alternative,” Garth Trinidad will be speaking at Digital Media Wire’s Digital Music Forum West in Los Angeles, October 8-9, at the historic Hotel Roosevelt.

Mr. Trinidad will join over 300 senior decision-makers from record labels, music publishers, producers and distributors, technology companies, wireless companies, rights organizations, industry bodies, radio, advertising, attorneys, artists, investors and venture capitalists. The two-day event is the industry’s only comprehensive digital music conference focused on the evolution and future of digital music.