JAN 26, 2015 14:32 PM
Startup Advice: Get Your Story Straight
Serial entrepreneur whurley weighs in on working hard and spreading your message
By Margo McCall
Open source advocate William Hurley, known as whurley, got his start working for large companies--in research and development at Apple and as a master inventor for IBM. But where he found his real success was in co-founding new companies--first security management company Symbiot, then Chaotic Moon, an Austin-based mobile software design and development studio, and now Honest Dollar, a stealth financial technology startup that will launch this year at SxSW in Austin.
"The secret of my career is understanding the need to bridge the two," says whurley, a speaker at Startup Rock Stars, set for March 24 in San Francisco. "With startups, especially open source startups, they say they’ll destroy Microsoft's market share. But they don’t understand big companies. It’s just this monolithic company they’re trying to kill but they have no understanding of the economics of large corporations and how little affect they are likely to have."
Whurley started out as a bassist in a funk band then took an electronic music class at Temple
Junior College in Texas--the extent of his college education. After leaving IBM, whurley co-founded Symbiot and was CTO at open source systems management company Qlusters, then was hired by a resort group to infiltrate a Las Vegas casino's offices to perform security audits. In 2007, he went to work for BMC Software as chief architect of open source and open innovation. He was the recipient of an international genius grant in 2012.
Struggling or out of business
Whurley's learned quite a bit during his years helping found companies. "Startups are in one of two phases—they’re struggling or they're out of business. That’s how it goes. It’s a very hard job," he says. "The other thing about startups is they'll rarely turn out to be what they intended to be."
For example, when Vancouver-based Ludicorp. launched Flickr in 2004, it was intended to support Ludicorp's Game Neverending, a web-based massively multiplayer online game. However, after the online photo-sharing site Flickr proved more feasible, the game was shelved.
If you're thinking of starting a company, expect to work hard. That may come as a surprise to someone who is used to collecting a paycheck from a stable, full-time job. "Know that you’re going to be struggling and have a good chance of failing and may have to change things as you go along," he says.
Expect a lot of that hard work to come from trying to convince others that your idea is worth developing--especially if it's ahead of its time. "A lot of startups don’t understand that if your idea is good you’ll have to shove it down people's throats. You'll have to be talking to investors and potential partners, getting feedback. But that's good because you'll be meeting people and that can lead to you getting customers."
Pick something interesting
Whurley advises those considering starting a company to pick an idea they're passionate about. "If you’re not going to use the product, don’t do a startup around it. Do something you need. Something you're passionate about. Because you are going to spend hundreds of hours working on it."
You'll also need to be able to communicate your idea and make it compelling enough to gain interest. Most startups have a creation myth. Google, for example, was started when Sergey Brin and Larry Page met at Stanford. Apple's Steve Jobs and Steve Wozniak started their company in a garage, as did HP founders William Hewlett and David Packard. Michael Dell started his company in a college dorm room, and so did Facebook's Mark Zuckerberg and his friends.
Creation myths usually have a combination of hardship, struggle, perseverance, and ultimately success. Your story also needs to let the world--and investors--know what your product will do and which markets you are targeting.
But while you're still in stealth mode, be careful who you share your idea with. Venture capitalists typically won't sign nondisclosure agreements, so for those investor meetings, be prepared to have a more general story that leaves out the specifics.
"Even if you think you have the greatest idea, they’re going to hear the same idea from other people too," whurley says. "Always ask for an NDA, but have a version of your story you can tell without one, one that talks about the market, the opportunity."
Prepare to exit
And then once your company is successful, be prepared for it to be acquired--and for the new owner to want to oust the founders and install their own leadership. "You’re going to get acquired. Wanting to hang onto your company, that’s all ego stuff. You can’t get caught up in that," whurley says.
Chaotic Moon built predictive devices, including a “smart” shopping cart that follows the shopper around the store, a mind-controlled skateboard, and a bicycle helmet (called the Helmet of Justice) intended to catch hit-and-run violators. Its customers included News Corp, Microsoft, Pizza Hut, Fox, CBS Sports, Sanrio, Betty Crocker, Starbucks, Best Buy, Groupon and Discovery Channel. In March 2013, Hollywood talent agency William Morris Endeavor, and their technology investment and equity partner Silver Lake Partners, purchased a significant stake in Chaotic Moon.
Although whurley sold some of his interest in the financially successful company, he still maintains a stake. "That’s not a ship anyone wants to get off of. It bought me an incredibly nice house, my retirement. It set me up," he says. "Funders need to know when to leave because you’re going to leave. As you grow, you become marginalized. That’s just the way it works. I love my partners but we all knew it was time for me to move on and I’m thankful that I have their support in my new venture."
Culture of overwork
One thing whurley wishes would change about startups is the culture of overwork. At Chaotic Moon, he says, "we worked tons of hours. It was our life. OurOur industry has built a startup culture that doesn’t make sense in the real world. We’ve convinced ourselves that working so hard is some weird big badge of honor."
Those involved in his latest venture, he says, work Monday to noon Thursday. "You should never be there at 3 a.m. Burnout comes from lack of time for you," he says. "There’s no problem that you can’t sleep on, no matter how desperate you think it is."
One other thing he'd like to change is "signing rock star developers just like sports stars." Some developers, he says, think they should makemillions per year. Although whurley doesn't dispute that developers deserve to be paid well, the above-market salaries, he says, are bad for the industry and startups in general.
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