Joshua Bixby Posts

How to talk about when it’s time to pull the plug on a startup

How to talk about when it’s time to pull the plug on a startup

Western culture, as a whole, is not great at talking about death. Sure, people happily watch armies of the undead munching on the few remaining humans in The Walking Dead every week, but when it comes to a serious, sober conversation about The End, we avoid it like it’s a zombie horde.

And with good reason. It’s not a particularly pleasant topic to consider when applied to ourselves or the ones we love. As a father of three, I see a visceral reaction when I try to talk about it with my kids. It’s as if deep in our lizard brains we fear that just by talking about it, we might make it happen.

Oddly enough, I see the same behaviour mirrored in startups. It seems like if you talk about the failure and death of a company, you risk creating a self-fulfilling prophecy. Even though I believe I approach the topic rationally enough, I find myself feeling weirdly nervous as an investor talking to CEOs in our studio about company death. When I examine these feelings, I think it comes down to worrying that my CEOs will feel like I don’t trust them to do their jobs, and that this will demotivate them at a critical moment. 

The Dangers of Customer Feedback or: How to Avoid the Dreaded Product Death Cycle

The Dangers of Customer Feedback or: How to Avoid the Dreaded Product Death Cycle

If somebody built an app that spit out a dollar every time an entrepreneur quoted Henry Ford’s alleged statement “If I had asked people what they wanted, they would have said faster horses”, they’d be rich.

Regardless of how overused this quote might be, there’s a lot to like about it. Radical breakthroughs in tech are unlikely to happen when you ask customers what they want. They happen because somebody had a vision and made it happen. 

To Outsource or Not to Outsource, That’s The Question

To Outsource or Not to Outsource, That’s The Question

Deciding whether or not to outsource work in the early stage of a startup can be a tough call. Outsourcing certain tasks — such as legal, accounting, website hosting, and even HR — obviously make sense. But what about product design, engineering, and PR? There’s no shortage of articles praising the benefits of outsourcing these core tasks and offering examples of companies that have successfully gone this route, but I believe these tasks are better kept in house. Here’s why. 

How to lower your Customer Acquisition Cost

How to lower your Customer Acquisition Cost

You can’t be an entrepreneur without a healthy streak of optimism. There’s just no way you can survive the gruelling task of trying to convince yourself and investors to believe in a dream while shrugging off a steady stream of rejection. But while optimism might be a crucial personality trait for entrepreneurs, it’s often accompanied by self delusion lurking nearby in the bushes. This could mean convincing yourself of product/market fit when there isn’t one, or forecasting an unrealistic CAC (Customer Acquisition Cost).

I’ve seen many startups solve the product/market fit problem, only to fail when the cost of acquiring and monetizing customers turns out to be higher than expected. Previously, I’ve talked about how to balance CAC with Customer Lifetime Value (LTV), but I didn’t go into the gory details of how a crafty entrepreneur goes about keeping CAC low. 

4 Reasons Why the Bottom-Up Approach Is a Great Way to Sell SaaS

4 Reasons Why the Bottom-Up Approach Is a Great Way to Sell SaaS

Sometime late in the last decade, there was a subtle but important change in the way companies began to adopt enterprise software. Instead of new technology coming in by way of the CIO or IT department, employees began driving the adoption of new tools. I am referring to tools like Salesforce, Netsuite, and, of course, Slack.

Recently I’ve had the opportunity to mentor a fast-growing SaaS business that is using this bottom-up model. For a guy whose experience has been almost exclusively with the top-down approach that requires selling to VPs and C-level executives, this has been a great learning opportunity.

While I can’t say which has proven to be empirically better, I can say that I find a lot to admire in the bottom-up model.

How to recognize the difference between anemic versus healthy growth

How to recognize the difference between anemic versus healthy growth

One surefire way to scare off investors and make a strategic blunder that could result in an unnecessary crash and burn is to be overly ambitious (or, likewise, too conservative) when modeling your company’s growth rate.

Investors want to see a revenue model that, at scale, demonstrates you’ve covered your fixed costs with enough margin that it makes it worth their while to invest in your company. You must show that the long term value (LTV) from a customer is greater than your costs to acquire them. And even if you can demonstrate this, your growth might still be too anemic to make investment worthwhile. 

Getting Your Revenue Model Right

Getting Your Revenue Model Right

I got my start in this crazy industry in the late 90s. Straight out of college, I found myself with a CEO title, funding, a team, and a business plan that needed to be written.

Back then business plans were huge multi-page documents full of Excel spreadsheets. Today’s slick ten-slide presentations wouldn’t cut it. Writing a business plan felt more like writing a PhD thesis than a pitch deck.

Regardless of the decade in which it was written or the number of trees used to print it, a good business plan (or pitch deck) answers a range of questions about the business you want to build: 

The Root of All Business Failures: Customer Acquisition Costs

The Root of All Business Failures: Customer Acquisition Costs

I must talk about customer acquisition cost (CAC) fifty times a week with our cohort companies. They’re undoubtedly sick of me constantly going on about it, but I probably won’t be stopping any time soon. That’s because CAC is a hugely important consideration for startups, particularly for B2C operations like Pampr, Lendful, and Koho

Customer Discovery: How to Do It Right

Customer Discovery: How to Do It Right

I love customer discovery. I’m good at it. Which is good because talking to people I don’t know and soliciting valuable feedback is crucial to our philosophy of lean startups.

I became good at customer discovery because I had to. My first work experiences were all in new industries using new technologies, so I couldn’t go to school or the library to learn how the content management market or the web acceleration market worked. Instead, I had to ask people. I found that if I played myself as a sales guy, nobody would talk to me. But if I played young, smart, inquisitive entrepreneur who needed advice, almost everyone would give me at least 15 minutes of their time. 

Centralizing a Startup Studio’s Resources: The Pros and Cons

Centralizing a Startup Studio’s Resources: The Pros and Cons

One of the benefits of the startup studio model is the ability to share infrastructure across the companies in your pipeline. Today I’m going to talk about how resource-sharing can work in different scenarios, and what kind of uptake we’ve experienced with our own entrepreneurs here at Stanley Park Ventures. 

Candidates Shine In Our First Entrepreneur Cohort

Candidates Shine In Our First Entrepreneur Cohort

This past weekend, we held our first Cohort at Launch Academy’s co-working space in the heart of Vancouver’s startup district. As this was new territory for us, we weren’t entirely sure what to expect, but we are happy to report that not only was it *not* a gong show, it went incredibly well! 

7 Traits We Look for in an Entrepreneur

7 Traits We Look for in an Entrepreneur

Vetting an idea is one thing. Vetting a human being is something else entirely.

The vetting process for ideas is relatively simple. Come up with a series of questions. If the answers are unsatisfactory, you can safely assume an idea probably won’t be profitable.

But how do you vet a person? We think there are certain traits, which, if present in sufficient quantities, are indicators of great entrepreneurial potential. Here’s a rough list of the qualities we think are important: