There’s been much talk in the Boston entrepreneurial ecosystem about the need to get more entrepreneurs building great companies and how the community can support them. Bill Warner kicked this discussion off with a great series of posts. There was much follow-on debate at the Mass Technology Leadership Council and then most recently at the Nantucket Conference (according to Twitter anyway!).

For some reason this analogy and its implications – swinging for the fences - and the whole onslaught of follow-up didn’t sit well with me. Not sure whether it was the analogy or what, but I felt like the solution – we need more homeruns - didn’t precisely address the problem. And while I greatly admire all the folks putting stakes in the ground on this issue, I wonder whether as entrepreneurs in Boston we’re really focused on building the next billion dollar idea, changing the game or “the world.” That’s a lot of pressure and sets a level of expectation for what a “fundable business” is that I’m not sure it serves the community so well.

I’ve always been one to want to go big, but equally important I want to stay in the game. Persistence does payoff according to all the research over at the Harvard Business School and that first-time entrepreneurs fail at a staggering rate of 93%. So with those kind of odds, you can see why a lot of entrepreneurs always have a shelf of other ideas and plans that run beyond B to G and H.  Being an entrepreneur is a repeat game. And in repeat games you need multiple at-bats. This is where being a Boston entrepreneur becomes a problem for me, it artificially suppresses my on base-percentage over the long-term.

This all got me thinking about the costs of failure. For which there have also been a staggering number of posts recently. The “fail fast” movement took a beating from Mark Suster here and then everybody fell into line around the simple notion that “fail fast” wasn’t quite the right idea but rather that “fail smart” was the whole point.

So really what we want is entrepreneurs who take risks and fail smartly (i.e. they try to change the world with real products and pivot as needed). Nobody seems to disagree with this. The problem is that it’s just a whole lot easier to fail in Silicon Valley. I don’t want to go all Tupac-Biggie on you right now – I think Matt Mireles did a fine job.  But the fact remains, you show me an entrepreneur with a truly innovative idea (this is especially true in consumer internet) that requires a significant “suspension of disbelief” from investors and I’ll show you an entrepreneur moving to the Valley.  I’m sure there are exceptions; I’d love to hear about them in the comments.

My point is really about the safety of failing in the Valley. It’s almost a rite of passage. The stories abound about this company not working, but then so and so stumbled into this guy in this bar or this coffee shop and then shit, they built X. You get more street cred for having failed.  Maybe it’s a folk tale. But you know where folk tales come from? Tradition and culture built over generations. The thing is, in Boston when you fail there aren’t a hundred or two hundred other companies to go work at or a thousand founders in coffee shops all over the place looking to “do it all over again”. You could practically throw two darts at University Café in Palo Alto and be sure to hit one Angel and one Entrepreneur. This is certainly changing in Boston, but we’ve got a long way to go.

So while I love the idea of thinking big, going big and punching above our league-tables (if there’s one thing I love about VC/Entrepreneur blogs it’s the persistent use and acceptance of mixed metaphors) I think the community would also be served by thinking about a support mechanism that builds the network between entrepreneurs even wider so that the thought process when deciding where to start a company is this “shit, I think I’ve gotten something here, but ya know if it doesn’t take in 9 months, I will have found 10 other companies to work for until I start my next one…” instead of “shit, if this doesn’t work, I might have to take a real job…”

We don’t just need more home-runs we need the chance for more plate appearances.

Let’s be honest, nobody’s ever heard of Techcrunch...

Sure, you and I in the start-up world have. We tweeters, checker-ins, likers. But in the real world, most people have no idea who or what Techcrunch is and they’re just fine with it. With some sophisticated sampling (i.e. I asked everyone at a recent NJ wedding and everyone at the HBS One-Year reunion) the # of people who could correctly identify Techcrunch was less than 1%. For the most part I wouldn’t even consider these people luddites – just people who consume information differently from you and I. Which is to say…most people.

This doesn’t mean Techcrunch is totally irrelevant. It’s highly relevant to self-proclaimed tech tastemakers, other journalists, venture capitalists, and entrepreneurs but none of those people are really going to matter to your start-up over the long-term. There’s been much written about the “Techcrunch bump” and how to “handle it” and “manage it.” It’s all shit frankly. If you don’t have it together enough to make sure your site doesn’t crash or that you can manage follow-on demand then you probably shouldn’t be in TC anyway. I digress.

Stay off the crack

Recently thredUP was set to be profiled in Techcrunch and for a moment it got us in a nice tizzy. We’d be big time! There would be 300 tweets about us, 250 FB shares. Those little Ts and Fs (like Woopra) are like crack for young entrepreneurs. Not only is it a high, but it’s a bit of an ego stroking.

The thing is: nobody cares. The people who are going to buy what you’re selling (beyond the super-early adopters) are not reading Techcrunch so stop optimizing for Techcrunch and start optimizing for places where the people who will buy your product will see it. Side note: We didn’t end up in TC but in the WSJ – it’s a long story but not an interesting one.

We learned the “don’t get drunk on your own PR” the hard way at thredUP with our launch of our Mens and Womens line back in late September 2009. UrbanDaddy, NY Times, Glamour, the Today Show, Daily Candy, CocoPerez, E Network. You’d thought we were geniuses. We weren’t and we aren’t, but we had a good story. And that’s not enough.

Good stories aren’t always good businesses

Three guys from HBS who start a used-clothing start-up using Netflix as the model with Netflix CEO Reed Hastings as a close advisor. That’s a good story! The thing is that in terms of being a great business – we didn’t have it figured out yet. If a start-up is the search for a sustainable business model. A start-up launch is game 1 of an interminably long 162 game season and you got Andy Pettite on the mound. I digress.

Only “dumb money” invests in a start-up because of PR

I think a lot of start-ups care so much about PR because there is a widespread misconception that notoriety and awareness will “get you funded.” We certainly were ensorcelled by this. While PR raises your profile a bit, if you have a good business with a differentiated approach in a big space you’ll get noticed. The VCs who are quick to call after the NY Times story are also probably the ones you don’t want – easy come, easy go.  And if you can get in the NY Times, you’re probably savvy enough to end up in front of some top-notch VCs.

Until you no longer consider yourself “a start-up”, don’t buy PR services. Ever.

I have now fired 1 PR firm and 1 PR person (sometimes you need to get smacked in the face twice to learn the point). Both of them over-promised and under-delivered in the same way that Techcrunch feels like a promise of something great and yet fails to deliver. They get you stories in places your customers aren’t – and because “the coverage” makes you feel good, you overlook the fact that it’s not paying off.

Money Saving Moms vs. the Wall Street Journal

What the hell is Money Saving Moms? It’s where thredUP customers live. It’s a blog/email digest of ways for savvy moms to save some money on quality products. It drove 10X as many customers to thredUP as the WSJ.

So I guess my point is this: stop worrying about Techcrunch, stay off the drugs, don’t hire a PR firm and go find your own personal Money Saving Moms. You’ll be glad you did. And when your entrepreneur buddy across town wants to know why TC hasn’t covered you, remind him “none of my customers read Techcrunch.”

Guest post by thredUP CTO Chris Homer, http://butisntitjust.com

Think about the team you have at your startup. In the early days it probably looks something like 3 coders, 2 marketing/business experts and 2 user experience/designers – maybe 2, 1 and 1.  This “silo-ing” of skills is extremely common but what's crazy is the rigid set of walls people put up around their roles, especially the technical ones.

In the fall, I went to a great workshop on a testing language called cucumber. There the question of having stakeholders write user stories (as I user when I log in with incorrect credentials, I should see...) came up and the general sense seemed to be that while it would be great to have them write the stories, getting them to go the extra step of properly formatting them to run tests would be too much.

I disagree.

For some reason coders have this misconception that they are the only ones that can do what they do.  This is false.  I have the complete opposite view.  Programming is simply a recipe and anyone can be taught to do the basics.  You are telling a computer to follow your instructions.  The learning curve is steep but it is totally worth helping people get up it.  There are five major benefits from this:

1)   You get more of the company’s eyes on the product

When you are building your product it is so easy to get heads down in the day to day you are doing.  After launch this is even more crucial. As your company grows, the silo’s grow higher and stronger and pretty soon many people get disconnected from the product they are selling, planning or supporting.  Offering people a way to quickly implement small changes can go a long way to keeping your team engaged in the product and results in people that actively review the site and suggest/make changes.

2)   Increased productivity from your full-time coders.

As you build your product and show prototypes and halfway demonstrations of different features, it’s very easy to get caught up in tweak-mode.  Non-stop (and sometimes conflicting) feedback can result in a lot of wasted time making a feature “just right”.  I realize there is a subtle difference between a usable feature and a confusing one, however, the time and place for those tweaks is later.  By teaching people to make small changes, the long list of aesthetic requests gets shortened dramatically, and your engineers can focus on building towards launch.  As you get closer to a launch date it’s much easier push back with “is this tweak necessary for launch?” – no one wants to delay the product.

3)   Lower priority content/styling bugs can be fixed immediately

From the designer’s perspective to #2, having more people that can make basic changes to your site results in faster iteration on the design side.  Instead of continually putting off small (but time consuming changes), designers that can do some coding can experiment and iterate without involving the full-time programmers.  The leverage here from an improved usability standpoint is very powerful.

4)   You are helping your team build new, marketable skills

Professional development is crucial to the success of a company.  The people you hire early on (especially in your first real startup) tend to be very specialized and in need of skills that broaden their ability to contribute in an entrepreneurial setting.  While to you your idea right now is the best thing since the segway, don’t get too caught up in your own hype.  Your people are working tirelessly for you and probably at quite a discount to their market rate.  There’s a chance the product doesn’t succeed and their wildest dreams of riches from those option packages vanish.  What are they left with?  The experience you give them.  If all your team does is hone and develop their current skills to a new level of expertise, that’s one thing.  But allowing them the latitude to build horizontally and develop new areas of expertise is what results in a company that produces entrepreneurs that succeed time and time again. 

5)   The team grows to appreciate the detail work and time it takes to implement their ideas

I’m going to write a follow-up post on this one.  “It’s just” too important.  Throughout the product lifecycle, the product development team continually hears the same phrase, “but isn’t it just”.  For example, “but isn’t a just an additional image to give a custom button a disabled state?”.  The programmers out there know exactly what I’m talking about.  While something like a disabled state is very important to the usability of a part of your site, it’s implementation is time consuming and often involves a highly customized JavaScript function or similar.  By getting people closer to the code and they will build an appreciation for the time different tasks take rather than assuming that something that appears so simple actually is just as easy to implement.

The other-side

As with everything, there is also a downside and risk allowing people to make changes.  People may try to check in changes without running them by others first.  They may do something that “breaks” the site.  Programmers may end up distracted while they teach others.  There is an endless list of pitfalls but the implementation a few processes like automated tests and proper feature/change check-in can mitigate and even eliminate the risks.

Ultimately, every startup has to make it’s own decision about who actually works on code, and whether it’s worth it to teach people some basic skills in this area.  I strongly believe the benefits outweigh the risks and everyone that wants to, should be given the opportunity to try it out

What we have done at thredUP:

At thredUP, Peter and myself do most of the coding.  One of the other co-founders, Oliver, was a CS major back in college but hasn’t done any coding since. We have brought on Heidi, a third graphic designer that wants to build her technical skills. James, Karen and Carly have never done any html before thredUP.  Everyone’s skills are basically silo’d.  And that’s great.  You can’t do everything yourself and you need people with different skills.  The thing is, when it comes to a website, everyone wants their say and everyone wants to change something. There is always an endless list of changes to be made and more intense development grinds to a halt. 

Call me crazy, but here’s what we did.  I helped setup Ruby on Rails environments with Textmate for Oliver, James and Heidi.  At first there was some hand-holding.  Walking them through how to setup html paragraphs, divs and style them.  It does help that we are using HAML and SASS rather than straight up html, as they are more intuitive (I think).  But after a couple weeks they have all become quite capable of making changes to content and basic styling.  Instead of having me make the changes and deploy them to a staging server, they can do them locally and preview/test the changes.  I even setup some shortcuts so that if they decide they like the changes and want to commit them, it’s dead easy to do so.  I then spend 10 minutes, a couple times a day, merging everyone’s work and deploying to the staging server for review.

An unexpected byproduct of more and more people learning to do some technical work is that others want to as well.  Karen (our director of Marketing and PR), wants an environment on her laptop so she can make changes to landing pages and other content as well.

The individual workflow involved needs a little work in places but overall it has freed Peter and I up to continue our work building out the bigger pieces of the site rather than continually tweaking the styling and content.

Everybody wants to be recognized and accepted. Whether it’s the baby being born who wants attention from Mom, the pimply 15 year-old hoping girls will finally start noticing him, or the mom blogger just praying for a reference from Dooce . The fact is we’re human. And being human, means that at some level you care what other people think of you (spare me the “I don’t care what other people think” mantra – just because you don’t let it run your life doesn’t mean you don’t care – at some level)

This is no more apparent than on Twitter. The Twitter-verse is high school all over again – now things matter even less than in high school, but the feelings of wanting to be recognized and accepted are still the same.  We like to be followed. To be retweeted, replied to, interacted with. Especially with people who are ostensibly cooler on Twitter than we are.  Ask yourself how cool you feel when some “twitter big shot” RTs what you posted? It’s just true. It was the same in high school when the cool kids let you each lunch with them. One day, you’re big time, the next you’re banished to the benches by the baseball field.

The truth is that Twitter is more like high school than you think - there are Twitter archetypes playing the same high school roles in all our lives. We do after all set-up our own accounts and our own contexts. And life does have a way of repeating itself.

So here’s my account rundown. Note that I’m not friends with all of these people (just like in high school!) but hey what the hell…if one of them wanted to have me at their lunch table...

Captain of Football Team - @msuster – I’ve never met Mark’s wife or kids, but I bet they’re incredibly good looking, smart and funny. That’s what you expect from Captain Mark. Suster’s got it together and came from relative obscurity to make a huge name for himself in VC – kind of like the JV quarterback brought up in a time of crisis who leads the team to the State Championship. People want Mark to like them and they want to be at the same parties (and who wouldn’t? his recognition can set your Twitter and blog feed wild, plus he’s a terrific signal caller).

Captain of Basketball Team - @phineasb – Any guy who calls himself a “Sneakerhead VC” is a lock for this. With a % of tweets mentioning something tangentially related to basketball exceeding 25%, Phin is the guy you want running your deal and your picket fence. Let’s face it the Captain of the basketball team always got a lot of action and you gotta respect that. Plus he’s the captain of a Team coached by a different Coach K – that would be Josh K.

Student Body President - @bfeld – He’s a nerd disguised as a popular kid. You don’t get to be student body president unless you’ve got your shit together. He’s a type-A on so many levels and I’m pretty sure that like Student Body Presidents of yesteryear, he’s got a whole team of acolytes helping him make it happen. It’s the Techstars tribe and they’re not messing around.

Editor of the Paper - @arrington – He’ll probably rip me if I’m not nice here, but that’s what you’d expect from the Editor of the paper. His story is more important than yours and it will always be.  Grades never really mattered and HS conventions were for other people. When you’re running the paper, you make the rules. And if you don’t like it you can f$%k off cause that’s how he rolls.

Lead Singer of Faux Rock Band - @fredwilson – Is it just the weekly Tweets about Last.fm? Or the fact that Fred’s a veritable rock star in the Twitter universe. Not only is he humble and articulate, when he wants to scream at the top of his lungs people listen. You want to move the needle or a gymnasium hall full of 16 yrs olds and I’d bet on Fred. Did I mention the AVC groupies? They’re serious and Fred keeps ‘em asking for more at the end of each show. The fact he engages Kid Mercury regularly tells you a lot about Fred. He’s not just a pretty face with a microphone, he’s a songwriter and a poet. Tip your bartenders and your waitresses.

Math Whiz - @cdixon – Sometimes I get the feeling Chris Dixon’s just smarter than the rest of us. That’s probably because he uses real numbers and defensible stats when he speaks. And the fact that he gets into it with everybody he can on Twitter or the blog is reminiscent of the guy in Math class who just knows he’s right, you’re wrong, and at some point you’ll figure it out – even if he has to tutor you for another hour.

Too Cool for School – Anybody with a protected twitter account. Really? You'll learn.

Homecoming King - @mashable @mattmireles – it’s a tie. Not only are they both incredibly good looking, but people actually care what they think. Girls and guys swoon. I’m pretty sure Matt was the Prom King and he wore sneakers and a volunteer fireman cap. Why? Cause he can.

The Geek Everybody loves - @scobleizer – cameras, technology, Fast Company in his backpocket. RS wears his geekiness on his sleeve and not only does everybody respect it, they actually relish the chance to hang out with him. Somebody once said the “geeks shall inherit the earth.” They were talking about Robert Scoble. He’s won. You’ve lost. He’s got the followers and sycophants to prove it.

Class Clown - @wilshipley – everytime I check Twitter in the AM (from the east coast) I have to ask myself “has Will Shipley been drinking again?” I wish I knew this guy, ‘cause I bet he’s hilarious in person. Either way, only the class clown can get away with live tweeting the bachelorette. It’s endearing.

Who rules your Twitterverse? Who am I missing? What have I got wrong?

A classic from the folks at Grasshopper.

So I’m having my first child in July and my wife and I are spending a non-trivial amount of time discussing names. We’ve been up and down the lists of popular and unpopular, old-fashioned and trendy. I’ve been given some good advice (make sure the child can put it on a resume and be taken seriously; don’t eliminate a political career by making it billboard-unfriendly, etc) which has produced a pretty good short list of names – only one of which is the name of a friend’s dog. But that dog is dying soon so I’m ok with it.

But I digress.

Names are important. Not just for babies, but for businesses. Where do businesses names come from? For some, it’s a calculated process.  There are focus groups, consultants, designers, etc.  For others, they just feel right. At thredUP it was a bit of both.

thredUP started as “threadequity”. I was in business school taking a bunch of finance and I was thinking about “shirt-shares” and partial ownership and a play on the term “sharing.” I bought the domain, put it on a few slides. It sucked. I played with a few versions: threadshare(s), shirtshare(s), and threadsy (now a growing, totally unrelated company).

Then, really liking “thread”, Oliver and I started thinking hard about building a brand. We wanted to be like Digg, like Tivo, like Zipcar. Where the brand name was association with the action. At this point, I was in Clay Christensen’s Building Sustainable Enterprises class and deep into the notion of “what job does a customer hire your company to do?” So then we got to what people were feeling when they hired our company. They were feeling tired of their clothing, tired of their threads. They were actually a bit fed up with their closets. BAMM!

Like a lighting bolt we said to ourselves people should just “threadUP!”. And there it was. So we went to a kiosk at HBS (the ones in Spangler) and registered the name. ERRORRRRRRRRRR. Taken. Bastards! Who could possibly have threadUP? threadUP is an obscure sewing related term about changing needles…turns out this person lives in Portugal. I just can’t wait to get that letter: “we’d be happy to sell you threadUP for XXXX.” Awesome.

So we agreed on the next best thing: thredUP. thredUP and not threadUP.  We could live with that. And so sure it’s spelled wrong. And sure the media spells it wrong. And sure people search for threadup and not thredUP. But at the end of the day, it’s the name on the door and we love it.

P.S. I also should mention that we have these names, too: thredUPsucks.com, F#$kthredup.co, Ihatethredup.com, etc. Every company should have these.

Today we killed "stars." Well sort of. Channeling my inner Dave McClure, we decided that despite our best intentions the thredUP "star rating" was just too f%$#ing complicated. So we killed its original version and have now gone back to the standard rating conventions used by Michelin, Yelp, Hotels.com, and the rest of the world.

This was hard to do for such a simple feature and it reminded us how hard this simple notion of "killing a feature" can be for larger features. So how did the conversation go?

Well to be honest it started about six months ago when we had to keep talking about what exactly our version of "stars" was. Everytime we discussed reviews and member ratings the conversation devolved into "how do stars work again"? I remember thinking why don't these people pay attention! Well actually they were paying attention, but the answer was just not intuitive enough to stick. The norms around stars are just too strong that telling people that your stars work different is just absurd.

So wondering how they used to work? Well, everytime someone reviews an item we ask them whether it was a thredUP or not. If it was, we give them one star. Then we roll up your last three reviews, counting the last one as double to produce your rolling star rating on a scale of 0-4 stars. Simple, right? Wrong. So we killed it.

Now, your star rating is the average of all your reviews. Simple. Tells the story.

We're all feeling better about it already. 

(download)

Chief Mom, Carly Fauth talks thredUP and thredUP kids with Jordan Rich.

Earn outs have always made intellectual sense to me. If you’re the newly acquired company (especially in a high growth market) you get paid based on meeting and exceeding projections in your plan. So company A (big player) buys company B (smaller player) and agrees to a price somewhere between 50%-75% of the estimated long-term value of B with the remaining value being “earned” by the management of B as they meet agreed upon milestones.

Earn outs are all about evaluating potential output, discounting and measuring. While not necessarily straightforward (in fact, they are often complex), most people can get behind the concept.  It’s what we’re used to in other contexts – it’s performance based pay.

But “earn ins” is the problem. How do you apply the same type of logic to new non-founder employees? Or to be exact: how do you evaluate the potential output, discount appropriately, and then measure the results for a new non-founder employee in an early stage company? This is especially true if you're having this conversation with someone for whom this is their first start-up. Just because you "work at a start-up" doesn't mean you own it!

Is this a problem?  Yes, it is. There are conventions out there for allocations, but the applications of these conventions are all over the map. A random walk down Google and the VC Blogosphere yields a smorgasboard of ways to approach this challenge.

Venture Hacks provides some benchmarking for companies after their first institutional fundraising. They identify these ‘options grants in Silicon Valley’ as ranges in the context of a hiring plan.

So with that being said, I’m proposing the start of an earn in calculator as a guide for thinking about quantifying this aspect of building your start-up. Here are the criteria I’ve started with:

• Outstanding Shares of the Company (a debate on shares vs. % ownership is a contentious one - see Chris Dixon's post and comments here)
• What # employee this
• Market Rate for Position – what would this person be worth (in your location) if they had no ownership in the company and were simply a hired gun
• Salary You Are Paying – what’s the effective rate your paying this employee
• Post-Institutional Round Option Grant – if this person were joining your company once you’re flush with cash and you were paying them market rate, what type of option grant would you give them?
• Scarcity Value of Employee – is this person hard to find in your area? On a scale of 1-3 with 3 being very hard to find and 1 being not hard, where would this person rate?
• Anticipated Months to Market Rate Salary – the “beans and rice” premium – how long do you expect this person to work at cut wages? 

So what?

The major challenge is that this type of grant is based on inputs - a real leap of faith. Most founders want to deal with hard numbers, real data, and act on reliable indicators of whether something is working or not. When granting early stage options it’s a lot of gut work since the only thing you can go on is what that person has done before and how you see the fitting in at the company.

Hopefully the beginning of this framework will help jump start some conventions for early stage hires. It would be good for everyone involved.