If you are a company that sells products in a business-t0-business format, there is likely 3 letters that are the bane of your existence: R-F-P. Request for Proposals have historically been the way that large government agencies, public schools, and even private industries reign in costs. The idea is that if the vendors are required to have an “eBay-like” competition on pricing, the winner will most definitely be the purchaser.

This is not always the case. In fact, the RFP process can be a turn-off for many good vendors who do not want low yields. Moreover, RFPs extend the length of time needed to sign off on a contract and enlist many parts of the business for comparison. However, they do pose some benefits as well (exposure to new vendors, downward pressure on high pricing, etc), and are essentially here to stay. So what do you do if you are selling B-2-B, with a product you feel is truly unique?

Enter no-bid contracts. No-bid contracts are ways in which you can stand out from the crowd by having the purchase stipulate that you are the “sole provider” of the service you are offering. Typically in the form of a letter, these letters are called, “sole source provider letters.”

So how do you qualify for these letters. Fortunately, in most cases all you have to do is submit the letter to the purchasing agent. You want your letter to establish the name of your company, that you are the sole source provider, and the reasons why. Here are some of the most common reasons you would want your exemption to fit under:

  1. only your company has a product that will meet the projects needs or only one your company can do the work;
  2. the existence of an unusual and compelling urgency;
  3. your product or service is a public good (utility)
  4. your product or service is copyrighted or patented, or is a trade secret.

If you believe that your product and service fits within one of these parameters, you can justify skipping the RFP process in most situations quickly and easily. You can check out such an example here: LINK

Balancing Your Instincts with Outside Opinions

The year was 2013. We were just getting started and it felt like we were already being stopped in our tracks. Google had just announced a new product offering called Google Helpouts. And suddenly, it seemed no one was interested in hearing about what we had to say.

“There’s no way you can compete against Google. You should try something else.” Comments like these grew everyday. To say I was concerned after hearing such comments was an understatement. But we truly believed we offered something different that colleges and students alike were looking for. So, despite concern that our fledgling startup could be going toe-to-toe with one of the biggest names in tech, we decided to venture forward.

One of the hardest things to do when beginning your startup is balance the feedback and ideas of the various potential investors and others with what your own instincts. You will find that there will be tons of advice that gives you reasons to ponder — and perhaps even iterate. But ultimately, it is up to you to make the right decision. It’s not an easy task, and there are no really simple methods to do it right. I’ve seen entrepreneurs miss the target on both sides. Some have tried to desperately to change with each new piece of advice that they struggle to remain in a position long enough to find a market. Others have refused to budge despite the consensus of feedback from multiple parties. What you must do is find the middle-ground, and stick to that.

Fast-forward to today. Upswing is still a startup, but we have thousands of students who have been able to benefit from Upswing. We have been able to keep several students from dropping out of college, and we have great customer reviews from nearly all of our users.

So what happened with Google Helpouts?

Google just announced this week it is shuttering the service.

Surrounding Your Team with the Right Advisors

There I was, keeping my composure outwardly but completely dumbfounded on the inside. I had decided to take a meeting with someone I was referred to, which at the time seemed like perhaps a consolation prize for not getting what I really wanted.

But something perplexing was going on. This guy in front of me was telling me how excited he was about my company, the things he could offer up, and what our next steps should be. I mean, of course I believed in our company, but it makes sense because I founded it. Why was he so impressed? I thought. After all, he was the Chief of Staff of the entire NC Community College System. Before then he was CFO. And soon he would be a trustee for a major University. I was… a naive kid with a dream.

At the time, we hadn’t even closed our first college yet, but he saw the vision. I began to wonder if there was some ulterior motive I didn’t know about in the startup world! Turns out though, he was just an amazing advisor.

Over the years since, I’ve learned to judge all of our potential advisors from my experience with Kennon. One thing many teams do is rush out to find as many names as they can add. But what is more important is to have someone who believes enough in your vision to dedicate time and/or effort to the business outside of the compensation structure. Of course equity can be on the table, and in my opinion it should be if they are helping you meaningfully move the business forward.

But if compensation is the main driver for the relationship, you won’t get the type of benefits you are looking for, and more likely than not it will not be as fruitful of an experience for either party. So take the time to surround yourself with the right team, and once you know they are right for your organization, make sure you treat them like the rare, special people that they are!

Here are just a few things you can do to build relationships with your advisors:

  • Remember important events (birthdays, anniversaries, etc.)
  • Send random tokens of appreciation
  • Be sure to include them on important decisions in the company (don’t just look at the relationship as a transaction. They are a part of your team)
  • Any other ideas?  Feel free to leave then below!

Letting Go of Your Baby

We had finally started growing our team. Increasingly, new ideas and initiatives were happening around me so quickly that I didn’t even know about them anymore! At first it was a great feeling. It felt like we were a super team! But admittedly, there were times when I couldn’t help thinking, “Man if only I were the one working on that…”

One of the hardest things to do as your team grows is to let go of some things. And it’s not an irrational thought. You worked on this project from day 1. You have intricate knowledge around why each and every decision you made occurred. For example, in our company, we use Google Drive as our file system. No one on our team other than the co-founders probably knows that we used to use Dropbox, and made a conscious decision to switch after realizing we wanted more control over folder access.

But it wasn’t just our file system. Everything from our server services to how we compensate our coaches were decisions I was there for and contributed in. What comes with this is an assumption that you know so much that you’re the best person to rule on decisions.

However, while this may be more accurate in the very near term, it is not a scalable answer. If your company can only grow as quickly as you can grow in learning these things, it will always be constricted. You have to give your team the autonomy to make decisions (and yes, that also means mistakes) and let go. While it is important for you to provide insights from what you’ve learned, what you really want is to develop a team of self-starters. People who are confident in coming up with an idea, testing the idea, learning it’s not a terrible approach, iterating on it, and finally crafting a great solution for your company.

It is this type of environment that 1) gives you the best chance of scaling your company quickly, and 2) gives your team members the freedom they desire in a work environment (thus ensuring they stay with your longer!)

And plus, when you let others take the reigns, you will find out that you don’t really know as much as you thought you did!

Staying Connected to Investors: Getting Investment Part 4

One of the hardest things for a new entrepreneur to do is keep a steady stream of contact with the outside world. It is just plain difficult — and understandably so. In the midst of trying to make miracles out of small amounts of money, overcoming hurdles left and right, and discovering the need to pivot at times, it is difficult to take time to sit down and write a message to people who may not have contributed to your project yet. However, it is important to remember that running a startup is a marathon, not a sprint. So it is important to not think about your immediate future, but your long-term one as well.

Investors, particularly angel investors, are interested in seeing companies who say they intend to do something — and then actually accomplish those goals. It projects a confidence that your team is an actual team that gets things done. They also want to hear about the struggles you come upon, because they want to see how you handle them.

The easiest way to stay in touch with investors is to create a mailing list. This mailing list should receive periodic messages about the progress of your company. Our messages typically have three key focuses:

(1) What has happened since the last message

(2) What we intend to do next, and

(3) How those on the list can help us.

The last part is important, because you want to give these investors an opportunity to provide advice, connections, or other things that are important to you right now. You want to be sure to stay consistent in your writings, so use something like Google Calendar to remind you when it is time to make another post. There are a couple of things you will notice over time: (1) your writing will get better, (2) there is great progress occurring with your project, and (3) you have a better understanding of what is important to investors.

So how often should you write?

Honestly, we are still trying to figure this out ourselves. We started with monthly messages. However, at a certain point we received requests for more frequent messaging, so we started sending out updates every week. This became difficult however, because it is not easy to share major updates on a weekly basis. In fact after a few months, people began telling us they don’t read our updates as much. At the same time, the weekly updates generated a ton of feedback for us that was helpful. Eventually, we sent out a poll asking people how often they wanted to receive our updates. Here was the feedback response:



As you can see, the vast majority of people thought that weekly updates were too often. While some suggested bi-weekly, most people preferred monthly updates. So as a result, we reverted back to monthly updates. What are your thoughts?


Preparing for the Investor Meeting: Getting Investment Part 3

You finally have a potential investor who is willing to talk to you. So now what?

Many people believe that this first conversation is about creating an official pitch presentation. While it is always good to be prepared, most people are not interested in hearing your official pitch. Instead, they seek an informal conversation where they learn about you, your team, your passion, and how long you have been at this venture.

You want to be prepared to come in polished answering the following questions:


  • Who are you? What did you do prior to your venture?
  • How did you decide to pursue this venture?
  • Why are you and your team the right people to pursue your venture?

These simple questions are important to even stand a chance to have this contact interested in you. You want to work on “telling your story” over and over. No one wants to hear that you were looking for something to start and landed on this idea, because that means you lack the passion for what you are doing. This may not seem like a big deal to you, but it is to them, because angels know that starting a company is far from easy. So their question is will you throw in the towel once they’ve committed to funding you.

Once this has been established, only then is it important to get an understanding for your company and the market it plays in. Here, it is important to know the following:


  • What is that you do (in 30 seconds or less)?
  • What is the problem you are trying to solve?
  • What is the market size for the problem? (This can be a difficult answer to find, but it is up to you to find out what the answer is)
  • Who are the competitors in your market/ What are your potential customers using now? (Note: Don’t simply say there are no competitors.
  • How are you different/better than your competitors?

Finally, make sure you clearly state what it is you are hoping to get from the connection. For example, how much are you looking to raise and why? Or, what connections can they make to help you pursue your business development further? Or is there a key person on your team you would like help adding? Think through what can be most beneficial before your meeting.

Next Up, Keeping in Contact with Your Investors

Sending A Reply-Worthy Email to Investors: Getting Investment Part 2

“If you want money, ask for advice. If you want advice, ask for money.”

This was just one of dozens of pieces of advice that I’ve collected surrounding how to reach out to potential investors. The truth is that — just as Angel investors each have their reasons for investing in you, they have their reasons for deciding to take a call (or have a coffee) with you. Your goal, then, is not to write a message that gets the particular investor to reply. It is to send a message to get a certain quorum of investors from your list to reply. This is important because as a new entrepreneur with a startup you have poured countless days and dollars into, it can easily feel personal when you do not get a reply, or the reply you want.

Now that we’ve prepared ourselves mentally, let’s talk about what investors do NOT want to see:

  • Long Emails – they are just hearing from you for the first time. And remember, they get tons of emails from people like you.Remember also that 66% of emails are read on a mobile device.  Keep it short and to the point. You want to let them know who you are, why they should be interested in you, and what you are hoping to get out of the email.
  • You Are New – many people think that shortly after setting upon the course of creating an idea, they must start reaching out to investors. But here is the rub: there are tons of reasons not to invest in you at that point — not the least of which is that you don’t know what you don’t know. You can still reach out to investors, but if you are early on, it should be to find out how to go about the startup process.
  • You Didn’t Do Your Research – if you are planning to reach out to an investor, you have to do your research and understand what this investor is interested in. Particularly among angel investors.

So what are good emails to write? I figured it would be best if I let the investors themselves pinpoint good examples.

(1) David Cohen: Sample Email 1

(2) Thomas Korte: Sample Email 2

(3) Unknown but I like it: Sample Email 3

Next Up, The Conversation



Finding Angel Investors: Getting Investment Part 1

Probably the most daunting task for new entrepreneurs is finding people who believe enough to invest into their project. It may be second only to dreading that first customer call. Unfortunately, there isn’t a great deal of information explaining how to get started down this pathway. As a result, many startups begin by googling “startup investors”, find a list of VC firms, and then decide to start sending out emails. It isn’t long before the unreturned emails, or polite list of “no thanks” begin to overburden you.

There is a better way to begin. First, unless you (1) have have created a startup in the past or (2) have special connections, the people most likely to be interested in your startup are angel investors. Angels are typically individually high net worth individuals who typically will invest earlier in companies. The great thing about Angels is that they look at more than just spreadsheets: they prefer to invest in companies they care deeply about, or feel they can contribute a great deal towards. They are also interested in companies with a great team, and whom they connect with. So how do you get in touch with these angels? Two really strong avenues are LinkedIn and Angel List.

  • LinkedIn – Angels in less common markets (i.e., everywhere except California and New York) are typically at least interested in investing in a startup in or near their region. The idea is that they want your business success to have an impact on their community. So one good option is to do a search on LinkedIn for angel investors in your area. To return the search results you want, you may have to open a premium account, but this can also be beneficial because you will want to send those investors a message (which you also need premium access to do). You can also use the search function to search by industry, which will help you find investors who closely align with you.
  • Angel List – Angel List is like Facebook for the startup community. Each startup typically has its own profile, and investors can browse information you provide to see if they are interested in you. Meanwhile, you can also browse investor profiles to find those who have invested in similar industries as yours. One thing to keep in mind – setting up your Angel List profile takes a bit of time. But it’s definitely worth it!

Once you have a list of people to reach out to, you will want to seek to setup a conversation. One mistake early startups believe is that getting an investment will be a done deal. In reality, it is a much, much longer process — and while most angels are nice people who won’t turn down an opportunity to talk with you, the grand majority will not be seeking to invest in you (at least not right away). So why even try?

Well as these guys see you making progress, and see your team working cohesively, they become more confident in your success. And over time, that confidence can translate into an investment. Even more importantly, once they invest, they are likely to connect you with colleagues of theirs you may not have known about. This is good because (1) the trust the colleagues have for each other allows for a quicker decision by this new colleague, and (2) you are open to a network you didn’t previously know about.


Next up, How to connect with the investors…

Hiring Your First Employee: 4 Factors to Consider

I had just walked the candidate to the door, as he said goodbye to the rest of the team. As I sat back into my chair, I looked at everyone else. Should he be our next hire? Two people gave a resounding yes. One other gave an equally forceful no. And suddenly, we had a heated discussion on our hands.

How could you not like this guy? He’s the best person we’re going to find!

I couldn’t help but add in my two cents as well to the discussion. But honestly, I couldn’t help but notice that for some reason, I was also having doubts…

One of the hardest things to do as a manager is hire the right employees. I would even say it’s more difficult than even finding funds to pay for the employees. This is because suddenly you are required to possess all of these new skills: how to be a manager; how to discern culture; how to ask the right questions; and finally, how to be a cheerleader about your company to someone you’re not convinced you want yet. On top of all of these things, you must also continue to run your new, young business.

There has been a great deal written about hiring great employees. Much of it is likely spot on. However, I’ve found that much of it is also not grounded in the reality of a bootstrapping startup. You may have heard the same type of advice:

“Only hire people who are smarter than you!”

“Hire slow and fire fast!”

This type of advice may be good for Facebook, but it’s not particularly well-suited for you. If your potential employees are good, they are just as wary of choosing you as you are choosing them. After all, at this point you are likely not profitable, you probably can’t pay much, and you could still be in the phase where it’s undetermined if you are going to be successful. So taking an extended period of time with a prospective is an almost sure-fire way to keep them from working for you.

Here are my tips for hiring new employees as a bootstrapped startup:

(1) Determine the 5-year plan for this applicant – Do you even need an employee right now, or would a contractor suffice? It may be simple to consider that there is a ton of work at the moment, but what happens 6months to 1 year down the line? Plan out this potential employee’s role, and make sure that there is a long-term strategy for that person.

(2) Make sure the applicant is passionate about your company – you will be requiring him/her to work long hours for pay that probably isn’t that impressive. You don’t just want someone searching for any job. You want someone who strongly believes in what you are doing and wants to contribute to that greater goal.

(3) Find a go-getter – Of course it is important for your applicant to have a great skillset. But remember there are a lot of things that can be taught. What I’ve noticed cannot be taught is how to be ferocious. You want someone who doesn’t tire easily, someone who will constantly look for new pathways, someone who doesn’t need to be hand-held and someone who makes it their personal mission to get the job done. These characteristics are much more important. Why? Because more likely than not, they will be doing many things not in the original job description, and you will likely not be doing the best job of managing them to start with. So you want someone who will take their role and run with it.

(4) Suggest a 30-day “cool-off” period – Startups aren’t for everyone. Sometimes it is you who find that out, and sometimes it is your employee. The worst thing you want is someone who is detrimental to your culture, because it turns out that they hate working here. So suggest a 30-day period to assess how things are going. After that, you will feel more confident about a full-on contract.

Your First Contract! Now What? (Insurance Requirements)

Insurance is one of the more surprising sections of the contract language. People are typically surprised by the type and amount of insurance their Clients request of them. Sometimes it can be burdensome enough to keep them from even starting the contract in the first place.

Other times, however, the insurance can be good for you, and can even be pretty expensive. You may ask, why do I eve need all of this insurance. It is all about risk mitigation. Since you are a startup, your client is likely much larger than you. If you fail to perform as required or lose your company, it may result in a few thousand dollars lost for you. But for your client, the loss can be more substantial. As a result, they may require you to hold insurance that they can pursue in case you are no long around to sue.

Here are a few insurances that you may see in your contract, and an explanation of what they are for:

Worker’s Compensation – This is required in many states and covers any claims against your company by employees. The terms and standards are set by each state. You can find out more here: http://www.nfib.com/article/workers-compensation-laws-state-by-state-comparison-57181/

General Liability Insurance – this is typically for general bodily injury or property damage by you or your employees. It is typically the most basic type of insurance required outside of Worker’s Comp.  As a sole proprietor, the price can be as little as $500 for the year. This does not cover negligence on your part.

Errors and Omission/Professional Liability - This type of insurance protects you from suits around negligence by you or your employees. This is one of the more underestimated important insurance policies. It protects you against suit for failure of your product to perform as it should, if that failure tends to result in some sort of financial loss to your client. Because of what it covers however, it can be expensive ($2000 or more per year).

Automobile Liability –  this insurance tends to cover workers at your company in the same way your personal car insurance does.