Since we placed an order for the GlowForge laser cutter (more on this in another post), we got a pre-released copy of the Dan Shapiro’s upcoming book on Startups and Entrepreneurship “Hot Seat The Startup CEO Guidebook” Dan is the CEO of Glowforge and has a string of successful startups behind him such as Ontela (now Photobucket), Sparkbuy which he sold to Google, and Robot Turtles which is a board game designed to teach children as young as 4 years old about programming and logical thinking which he did as a kickstarter and which is now available in Target stores.
“Hot Seat” is basically a cheatsheet on startups broken into 5 parts. Founding, Funding, Leadership, Management, and Endgame. Dan explains his history and cites specific people and examples of practices that will help you navigate the dark waters of a startup. The first section of the book is all about Founding. There are some great tips here I wish I used in my previous business ventures. Founding is a dirty and scary thing for every startup. You want to think about contingencies from the start. Dan recommends to do this before you even incorporate.
In the first section of the book, Dan gives advice on everything from who should be a cofounder to even providing a template for a decision matrix on what projects your startup should focus on. He also gives great examples of how shares might be calculated for different types of cofounders, answering the question of “How much is each cofounder really worth?”. These kinds of things are what make this book awesome. Dan also freely gives advice that I’m sure he learned the hard way. Some of this advice is common sense, but there are plenty of gems you’d only learn from a good mentor.
Each section has several chapters in it. Again, the information comes straight from Dan’s personal experience. For the Funding section, there are slides directly from the pitch deck of some of Dan’s successful ventures. He breaks down what to put on each slide, and how to best present it. Arguably, this could be considered style more than anything else, but with a record such as his, and the fact that he now is an investor in other startups I’m going to go out on a limb and say it’s more than just style. There ae several other chapters in the funding section that explain the differences between different types of investors and what each of their motivations are, which is what you need to keep in mind if you are pitching ideas to them.
In the Leadership section, he discusses the different duties of a CEO, and how to cultivate a good company culture. I think anyone applying for a new job or even considering changing jobs would find this section interesting because you can tell a lot about how day-to-day interactions reflect the culture. The CEO is the taproot of the company’s culture and is the archetype all the other management will follow. It says a lot about a company if everyone is constantly gossiping…
While I’m not a CEO right now, I am in a newer management position at my full-time gig. I found the management section of this book very helpful. I’ve memorized some of it as one-liners that I can repeat to myself to help me learn this new set of skills. My favorite and most obviously useful advice in this section was on “playing the CEO ‘Inspire’ card”. This section also gives great general tips on hiring, whether you should buy or lease furniture, how to deal with a board of directors.
The final part of this book discusses the Endgame. What are the different types of acquisitions? Who do you negotiate with? It stresses how important it is to have done things correctly and thoroughly from the beginning of the startup. Technically, the entire goal of any startup is to either be bought or to reach critical mass and go “Google” on the market and end up buying other startups. Either way it is important to know what to expect. Dan gives the example from his previous company Sparkbuy’s acquisition by Google and breaks down the different parties involved and somewhat what to expect in negotiations.
Overall, I really enjoyed Dan’s book. It gave more gritty details than any of the other books on buiness and startups I’ve read. The devil is in the details and while this book stops short of giving you legal advice, you get insights on how things are supposed to work. Personally, it reaffirmed my intuitions on getting a business started correctly and having contracts in place for the “big day”; be it an exit, acquisition, or other huge event for you or the company. The book will be available in paperback May 2015 and