"Never burn bridges."  It's one of those familiar pieces of advice from Mom that still rings in my ear.  "Yup, sure Mom...sounds good," I'd tell her as I politely brushed her off.  I'm tempted not to say this given that I know she reads my blog, but it turns out that Mom is absolutely right (in this case, anyway!).  And it never felt more true than it did in one particular case recently when I watched someone badly a bridge and thought about all the ways it could potentially come back to haunt him.

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AuthorDarrell Lerner

The days begin to blend together with little to distinguish one from another.  A whirlwind of meetings, research, brainstorms and Google Docs.  Jumping from thought to thought and idea to idea. Your mind moves faster than your body.  There's not enough time to do it all, let alone process it all. Welcome to the early days of a start up. 

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AuthorDarrell Lerner

Now, if I could, I would go back in time and kick myself for thinking that I should settle for “just a job.” And I don’t say that just because the start up world is full of ping-pong tables, work from home days, video games, and in-office happy hours. Those are some awesome perks for sure, but I would tell my 21 year old self that it’s actually possible to work for a company you love, believe in, and want to make your mark in if you open yourself up to opportunity and believe in yourself.

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AuthorKimberly Bouton
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Looking back, there were probably over 100 different things we did to turn our company culture into one worth bragging out, but I thought I'd call out a few of the highlights.  What’s worth noting is that these are primarily small things that any company can introduce into their own office environment to instantly improve their office culture.

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AuthorDarrell Lerner
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Have you ever had writer's block?  It sucks.  

Well picture being a creative entrepreneur - the type who normally thinks of new business ideas in the shower, while watching TV, or even just walking down the street - and suddenly developing the equivalent of a horrible case of writer's block in the midst of trying to decide on an idea for your new business.  Now imagine this happening with some capital already raised, investors waiting, and your first employee already hired.  Yikes!  Welcome to my winter!   

 

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AuthorDarrell Lerner

Posted by Darrell Lerner

I am not a fortune teller.  And, assuming you aren't one either, then time spent writing a comprehensive business plan is time wasted that could be better spent getting to work on advancing your ideas.

The tried and true approach to starting a business is to begin with a business plan.  Conceptually, it makes sense.  The more you plan, the better prepared you will be.  Think the business through, research competitors, hone your financial metrics, refine your hiring plans and there will be fewer surprises.  Sounds logical enough, right?  WRONG!  Start up life brings new challenges and opportunities every single day.  I'm in the early stages of a new start up and I can barely predict what's going to happen next week with accuracy, let alone plan out the next 4 years in fine detail.  And anyone who thinks they can accurately project what their revenues and expenses will look like in 2016 for a business that doesn't even exist yet either has never done this before or is smoking some really powerful stuff.

Before I launched my first start up, I too thought that you planned out a business in painstaking detail, put it on paper in the form of a business plan, and then got right to work.  I believed that it was a linear process - meaning you came up with an amazing idea, followed the playbook step by step, and success would inevitably follow.  But here's the thing - the start up path isn't linear at all and there isn't any particular playbook to follow.  From Day 1 in a start up there are decision points.  They occur each day, sometimes multiple times per day.  Some are larger than others, but they all represent potential paths that the business will take and each decision point slightly alters the course of the business going forward.  It's like those "Choose Your Own Adventure" books that many of us enjoyed as kids.  There are, in fact, millions of potential paths a start up can take and each decision point is a product of the previous ones – a sentiment conveyed quite well by my favorite band Rush in “Ghost of a Chance:”

Like a million little doorways
All the choices we made
All the stages we passed through
All the roles we played

For so many different directions
Our separate paths might have turned
With every door that we opened
Every bridge that we burned  

With so many potential paths that a start up can take, and so many different variables influencing its path, there's simply no way to chart an entire course for a business so far in advance.  Business plans represent a starting point, nothing more. That's because where a company starts is very rarely where it finishes.  Just ask Groupon and Twitter and Instagram along with countless others whose initial business plans bear little resemblance to the companies they ultimately became that we know and love.

This is certainly something I experienced personally at SNAP Interactive.  When my brother and I co-founded the company, our initial business plan was to build an online dating site targeted toward busy urban professionals.  After many months of planning and iterating, we launched IamFreeTonight.com in Fall 2006.  The site performed extremely well and we signed up tens of thousands of users and achieved significant national press coverage in the first few months.  Fast forward to May 2007 and Facebook opens up their app platform.  We ventured into the unknown and built an app called Meet New People whose primary purpose was to drive traffic to IamFreeTonight.com.  All of a sudden we were getting thousands of signups each day.  Meanwhile, other new apps with unheralded backgrounds were ballooning to millions of users virtually overnight.  We sensed that this was a once in a lifetime opportunity and, with only a single programmer at the time, made the very difficult decision to abruptly stop all work on IamFreeTonight.com in order to further explore the Facebook opportunity.  A short time later we launched "Are You Interested" on Facebook which ultimately grew to tens of millions of installs and a $20 million annual revenue stream.  We never worked on IamFreeTonight again.  I don't think there's any question we made the right call, but certainly the way the company looked by the end of 2007 was a far cry from the business plan we launched with a year earlier.    

So, if business plans are such a waste, why do VC's and investors still ask for them?  Partly out of tradition and partly because they want to see that you've really thought about your business before they invest in you.  Even if they know the 4-year financial projections are useless, they at least demonstrate that an entrepreneur understands the model and financial aspects of the business they've set out to pursue.  Neverthless, VC's and investors have continued to shift away from the 30-page business plan in favor of shorter power point decks covering only the most important topics.

So, if not a business plan, then what?  Well there's one thing that investors like A LOT more than a good business plan and that's results!  Attaining revenue or traction (ie - proof of concept) is much more meaningful than some fantasy on paper.  And the only way to achieve those items is by getting started.  So stop writing that business plan (write an executive summary if you must) and get to work!  Prove your ability to execute and that will say volumes more than any 30 page business plan ever will! 

-DL

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AuthorDarrell Lerner

Posted by Darrell Lerner

My blackberry was broken.  It must have been. I hadn't received an email in nearly 3 hours.  I shook it repeatedly.  5 minutes without an email during the day was extremely unusual.  3 hours without receiving one was downright creepy.  It had to be broken. What other explanation was there?  I mean, things couldn't change that quickly for me …could they?!

Earlier that afternoon I walked out of the office of SNAP Interactive, the company I co-founded with my brother more than 6 years ago, for the very last time.  SNAP started with the two of us working from home, then sharing a small cubicle in a crowded New York City micro-office, and over the next several years we built SNAP into the 36th fastest growing company in North America on the 2012 Deloitte Technology Fast 500 list with 4,400% revenue growth over the past 5 years and approximately 50 employees. During those years, it consumed my life, as fast-growing start-ups typically do.  Working at night, on weekends, on vacation. Checking emails around the clock. Reloading the revenue dashboard every chance I got. You know how it is.  Founders of a start up never truly shut off.  

So, I came home and settled in at my computer to do work and check email - as was my normal routine upon arriving home from the office. Except I had no work to do and no emails to respond to. Turns out my blackberry wasn't broken after all. I had simply stepped off the proverbial start up treadmill and all of that instantly became part of my past life. It's funny - for the past 6 years there was never enough free time and I would have killed for a little more of it. Now, suddenly, I had more of it than I knew what to do with and I found myself completely lost. The sudden void was a complete shock to my system. I wasn't prepared for it - although I'm not sure how you can ever be.  I missed having something to think about, obsess about all the time.  I missed seeing friends and familiar faces around the office every day.  I missed being busy.  I felt without purpose. If this was going to be my new normal, I knew it wouldn't last very long. 

People who knew, who had experienced the same thing and been in my shoes before, said to give myself some time to decompress. Take 6 months off, they said. They were right. I needed the time off. And I probably still do. But, it took no time at all before I was crawling out of my skin and it became clear that I needed something to focus on instead of sitting around and doing nothing.  Turns out, my need to decompress was strongly overpowered by my need find purpose again in my professional life.  So, despite not being close to ready, I soon decided to begin again...

I am fortunate.  A lot of people made a lot of money investing in SNAP Interactive at the beginning, so it was extremely quick and painless for me to raise some start up capital for my new project despite not even having a business plan or any real idea yet of what I wanted to do.  Because of my track record, people believed in my abilities and believed in me.  They knew that I knew how to do this and they knew that eventually I'd figure it out.  Nevertheless, raising capital without a formal business plan is certainly a non-traditional beginning for a start up; but then again we built SNAP in a very atypical way as well.  SNAP never took any VC money.  We raised a "friends and family" round at the start and used my legal background to become publicly traded before we even launched.  After our initial six-figure raise, we didn't raise a penny for more than 3 years, forcing us to execute at a near-perfect level and to quickly become profitable to support and grow the business.  It was indeed non-traditional, but it worked.  Thus, it shouldn't come as any surprise that my new venture is born from non-traditional beginnings as well.  Even my first hire is non-traditional.  Kim isn't a programmer as most first hires are in start ups, but she is smart, enthusiastic, full of potential and possesses an insatiable desire to learn.  From experience I know that those are the type of people who thrive in an early-stage start up environment.  And I know that if I can surround myself with people who possess those qualities then I really like my chances.        

As I step back on to the start up treadmill (this time without the shackles of being publicly traded and thus, no longer limited in what I can say), I thought it would be exciting to document the journey through this blog, as well as reflect upon some of the entrepreneurial lessons learned in my "past life" with SNAP.  I'm excited to create something amazing and hopefully you all enjoy coming along for the ride.

-DL

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