Category: Coaching

Expa Labs   2017 Companies

We started Expa Labs to help founders build and ship new ideas. By providing fundamental help in starting and structuring their company, providing office space, funding, and advising, we take a very hands on approach. We do this by working with a smaller group of companies.

Building off of our learnings from 2016, we expanded the program to better suit the needs of entrepreneurs. Just like a startup, Expa continues to iterate on making our program better for the creation and scaling of companies. After reviewing over 1,000 companies and meeting with less than 5% for final interviews, we are happy to start the 2017 program working with an incredible group of founders. Earlier today we announced this at Expa.com.

  • Interseller: Make contact with new prospects
  • Merlin Guides: Magically Simple Employee Training
  • NextGig: Actionable information about companies in your professional network
  • Sleeperbot: Messaging for sports fans
  • SuperHi: Learn to code and create websites from scratch with our online 8-week course
  • A stealth neural training company

(PS — if you are looking for great companies to join, take a look at each companies above to see where openings are available.)

With the lede out of the way, I wanted to share more about the process our team went through to review and select the Expa Labs 2017 companies. I also want to share my own learnings and how they will impact me going forward.

This year we received ~1,000 applications, spoke to countless teams in person, by phone, and email, and invited 36 teams to interview with us in person. The fundamental question guiding our decision process was: can we help this company be successful? Beyond funding, what can we do to work with this team to make a meaningful 10X difference in the trajectory of their early start? We don’t believe in just writing a check, but rather working closely with founders who we can help, that are coachable, to build and ship great products. In some cases, we gained enough conviction to move forward, and in others we did not.

One of the main things I struggle with (and expect I always will) is turning teams down. It is never easy to say no, but I feel it’s always better to give a clear answer rather than string a team along. Sometimes it has nothing to do with the team or the business, but rather entirely on the potential investor. In the case of Expa, it is usually a combination of things that may include:

  • Competitive to one of our Expa Studio companies
  • Competitive to one of our stealth studio companies
  • Competitive to another investment
  • We don’t have enough domain expertise to truly help the founders
  • We cannot make a 10X difference for the founders/company in the first 6 months (as mentioned above)
  • We are just wrong

On the final point I want to recognize that with ~1,000 applications we might simply miss something great. The default answer in the early stage investing business is “no” and this shouldn’t deter you from building your vision. Anyone who ever says otherwise isn’t being realistic because many great things don’t appear that way at the earliest stages. I hope for all applicants this process was a good experience, and as I have said before, a helpful part of the early stage journey.


Time well spent

Many folks asked me “How can you justify going through that many applications and spending all that time?” and I have a very easy answer: it is exactly what I want to be doing. Yes, it takes time that could be spent actively working with existing companies but ultimately it will help them in the long run.

There is a great WaitButWhy post about how you spend your time (take a minute to read through that) that really got me thinking about how I spent my time earlier this year. It outlines a “lifetime” in weeks, months, and years and encourages folks to fill in the blank template provided.

Here is what WBW came up with:

And they provide a handy template so I decided to do a basic one of my own:

How I want to spend my time in green

One of the best parts about this process has been seeing how it aligns with my own goals of helping and coaching early stage founders and companies. My time so far has been spent as an operator, an investor, and now a hybrid of the two. I realized this blend fits my own long term goal become a great advisor to companies.

From an investing perspective I also wanted to breakdown some of this time:

Of the 1,000 applications and I can filter them down into three categories:

  • 1/3 probably not a fit
  • 1/3 probably not a venture scale opportunity
  • 1/3 probably a great company

Using some back of the napkin math, I came up with what I believe are what a top tier VC firm/Partner could see in a year which is about 86 great companies.

(there are 365 days in a year, with about 260 working days, and perhaps they could see 3 amazing pitches per week (that’s a lot!) that are investable, which means they see 86 venture scale incredible companies in a given year. This is balanced against companies that are not a fit or not venture scale.)

Therefore, using the math above, I compressed about 3–4 years of pitches into this period (333 great companies/86 per year = 3.8 years to see that many companies). This is obviously not perfect. I imagine, over the course of a 3+ year period, I would be able to replicate what we accomplished over the last few months. This entire process helped me continue to develop my own pattern recognition.

Each application provided a video pitch, written overview and detailed answers to questions. Going through applications fulfilled our commitment to treat the people who spent time and energy putting these materials together with respect. Personally I wish I had more time to provide individual feedback for every applicant, but that simply doesn’t scale.

In the end we are thrilled to have found some amazing companies to join the Expa family, who are already hard at work with our Partners and the team. I can’t wait to see what these founders build and launch in the coming months and I am excited to work with each of them.

Coachability

Let’s get the fun part out of the way: the word coachability auto corrects to “coach ability” or “coach-ability” but I like it combined so I am running with it.

I mentioned that this attribute is now towards the top of my list in what I look for in entrepreneurs in my lessons learned for Expa Labs 2016 and I wanted to elaborate more on why. You see when I sat down to really think about what to look for and research what has worked with a founding team, I made up a list of what appears to be the (almost cliched) list of traits. These traits are things like: execution abilities, category expertise, leadership, technical abilities, ability to hire and retain great teams, clear vision, etc… What I underestimated when working so closely with entrepreneurs every day is how much being coachable mattered.

This was exemplified when a team we were working with at Expa Labs took a bunch of feedback (some harsh criticisms too) and incorporated and summarized what happened into their own roadmap. Their vision and mission stayed true, and they were not influenced out of anything they knew they already wanted to build. However, they were able to take feedback, talk through how and why they made decisions, and understand where we were coming from. It’s hard to take feedback, especially when it is something that you built. The best part was that they came back and delineated all the thoughts down together and stated what they heard and what they were going to do about it. They carved out parts they didn’t agree with, explained how some parts were wrong and had a plan to do what was next. The best part? This was unprompted by us.

One problem that others have brought up when I share this trait is that it could be seen as a weakness. I disagree and find that [strong views loosely held] is a great way of describing the ideal personality. Perhaps the other factor in play is that this may not work for all because the Expa Labs program is 6 months of in-person help, advising and coaching. This may not be the right trait for a founder that is working hard on a problem in their own space.

One reason I write up a lot of my thoughts since I started writing is to ask for help when I need it. The hardest part of searching for this trait is identifying questions that can help judge someone’s coachability. To date, I have a few, but I am interested in learning more. The best outcome is that I can have an in-person session with a team, hopefully, get excited about the idea and give feedback and see what happens. Unfortunately, that doesn’t scale very well and there isn’t much time for that. Instead, I use my previous pattern recognition across the written responses and videos in the applications.

This is one of the reasons that Expa Labs hosts a select number of events for applicants. These have been beneficial to dig into an idea, meet folks, and generally just spend more time together. If you are interested fill out an application at Expa.com/labs. For the most part trying to figure out if a team/company can use our kind of help is the main goal. I am also first to admit that this type of program may not be right for everyone.

Back to coachability — I do not have it all figured out 🙂 Since evolving my own thesis for early stage founders for 2017 you will have to look back on the Expa Labs companies started  in 2016 to judge whether or not this system worked. One interesting point someone brought up to me is that while true performance can be measured against the IRR of the capital we deploy, there are more nuanced paths to success that a place like Expa offers such as career paths for people, Expa Studio companies that can yield interesting opportunities for founders and of course the experience itself which can help people.

While my primary goal with Expa Labs is to help build amazing companies, a close second is helping the people that run them. For that reason, I am spending my time identifying those that are most coachable.