Entrepreneur, traveler, public speaker
Kevin Bracken
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Entrepreneurship

Thinking of doing a startup? Try Airbnb first

They say there is no “school” for startups, and that no matter how many blog posts or Paul Graham essays you read, you can only learn how to do a startup by experience. I disagree – if you want to see if you’re well-suited to running a startup, set up a profitable Airbnb first.
 
Airbnb? Startup? What does one have to do with the other, you ask?
 
By running an Airbnb, you will learn the following skills: assessing markets, hiring people you trust, customer service, cutting costs, growing revenue, legal compliance, copywriting, contract law, and hustling hard. If you are doing an Airbnb in New York, for example, you will have to aggressively negotiate with everyone from your landlord to shady contractors to mattress wholesalers.
 
It doesn’t necessarily need to be your own apartment; in fact, it’s better if it’s not. Rent an entirely separate apartment and treat it like a business. Incorporate a legal entity (for tax purposes) and track your revenue and expenses. Hire somebody to clean it between stays or do that part yourself. Learn how to systematize guest checkin (Keycafe or a Master Lock Key Box) and how to deal with guest complaints. Rent multiple rooms or Entire Apartment rentals. You will learn a ton about business.
 
The major upside of Airbnb is that it is not nearly as hard as a startup, and won’t take much time after it’s set up. Airbnb is growing rapidly, and as long as you’ve chosen your location correctly, you will become profitable in two or three months. There is a big safety net, the tools are already built out, and you should be able to afford the startup costs with your own money or the help of a relative. If you can’t make money off Airbnb, you have no business running a startup.
 
And here’s the thing: after running a successful Airbnb, you may realize, “Hey, this is pretty sweet” and not want to run a startup. You may actually be more suited to running a lifestyle business, which is a great gig if you’re cut out for it. Quit dreaming of raising capital and read The Four Hour Work Week and subscribe to the AppSumo mailing list instead. If all you’re dreaming of is “being your own boss” and generating a recurring monthly revenue that frees you up to do the things you love, DON’T DO A STARTUP.
 
However, if you decide that yes, you will still commit yourself to quitting your job, building a product, raising money and everything else, keep the Airbnb – you’ll need it when you’re broke. If you don’t think you could go broke running a startup, you almost certainly will at some point. The Airbnb money will increase your “personal runway,” meaning even when times are really tough and you’re living off ramen and sleeping on couches because raising money has taken a lot longer than you thought it would, you will have an advantage over other startup guys in your situation. Hell, you may even be able to make a pretty normal American salary on Airbnb in just your spare time, and be able to test out a few different ideas for your startup instead of saying, “This one has to work.”
 
So before you decide to double down on a single startup idea and risk it all, see if you’re really cut out for it, and give yourself a safety net, by trying out Airbnb first.

 

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Politics Startups

Success of Uber in Canada Has Huge Implications for Consumer Tech Companies

June 28, 2010  The roof top pool and bar offer a 360 unobstructed view of the city. The new Thompson Hotel, the new 4-star in town at Wellington and Bathurst, it is run by Peter Freed and Tony Cohon in Toronto.  TORONTO STAR/STEVE RUSSELL

This post originally appeared on TechVibes.

Each morning when I wake up, I head to one of two coffee shops: The Drake Hotel Café in Toronto or Sightglass Coffee in San Francisco.

From there, I almost always do the same thing once I get my coffee: summon an Uber. The car that rolls up within minutes is driven by a person who may or may not be a professional driver, but the ride is safe, clean, and only slightly more expensive than my coffee and bagel, every single time.

When I heard that the City of Toronto is trying to make my morning routine illegal, I was struck with a feeling of profound frustration. The City of Toronto, a sensible government that often does the right thing, has announced a bizarre but seemingly well-intentioned plan that ends up being disastrous for the very people it intends to serve.

San Francisco is a beautiful city with some serious problems. Rising rent, homelessness and theft happen at rates that would shock many Canadians. However, one place San Francisco is exploding right now isjobs. New jobs are being created every single day, and companies in San Francisco can’t even find enough qualified people to fill them. That’s right, there are more companies offering salaries north of $100,000 than there are people to fill them. Most of my friends and acquaintances in San Francisco work at companies with unlimited paid time off, full benefits packages, and six figure salaries. Simply put, San Francisco is leading the United States’ economic recovery, and is the centre of the universe for young people wishing to experiment with new business models and try their hand at the startup game.

The startup scene in Toronto is growing at a reasonable speed, but it still has a long way to go. The number one thing hindering its performance is not a lack of talent, not by a long shot. The holdup is Canadian investors and their risk aversion.

If you try to get investment for a consumer app in Toronto (versus something like, say, an enterprise app for hospitals and banks) it is an uphill battle in a climate where the appetite for risk is low. Compare this to a city like San Francisco, where the investors are looking for energetic young people building new things all the time.

The result is that San Francisco ends up being the testing ground for a lot of new apps. Every new app, really. The weird thing is, when these companies are looking for new markets to conquer, Toronto is routinely overlooked and they seek out second-tier American cities, sometimes a dozen small cities before ever coming to Toronto, despite our dramatically higher population. The result is that we don’t get to try out new technology that could improve our lives until years down the road, or sometimes ever.

Of the San Francisco-based consumer apps that have launched in Toronto in the last few years, Uber is the most revolutionary, hands down. Using Uber daily is cheaper than owning a car, a car that would contribute to congestion, and sit idle for 96% of the time. Uber has been lauded by Mothers Against Drunk Driving for reducing DUI. Its convenience is unparalleled, giving the consumer a powerful weapon in their transportation choices. I still ride the Queen streetcar five or six times a week, but I love that I can actually spend less money by splitting an Uber with my friends, and get door to door service in the winter cold. Why would the City want to eliminate this option that takes cars off the road when we all agree Toronto is facing a transportation crisis?

Imagine the city is successful in shutting down Uber. How do you think that will affect investors’ desire to invest in local startups? Not just here in Toronto, but all over Canada, from St. John’s to Vancouver. How do you think that will affect American companies’ desire to launch in Canada?

If we are trying to create high-tech jobs in Canada, why would we want to chill this burgeoning industry and generator of jobs, just to protect the embedded interests of the taxi industry? What has the taxi industry ever done for us? Uber drivers are always willing to tell you how they like driving for Uber, and they universally tell me they like it or love it. Driving for Uber adds flexibility to their lives, makes them their own bosses, and half of them tell me they are former (or current) taxi drivers, but are much happier driving for Uber.

Personally, I want these jobs to come to Canada. I want people to say, “The Toronto startup scene is exploding.” I want the city to continue to grow as a global destination for the most talented people in the world.

However, this battle of the City vs. Uber is a microcosm for the success of the Canadian startup scene as a whole. If we reward a company that is literally revolutionizing transportation by shutting them down, what does that say about our innovation climate? Make the right decision, Toronto, and write to your councillor, urging them to support jobs and innovation – or let the taxi industry choose our mediocre future.

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Entrepreneurship

Gymsurfing has been acquired!

In November 2013, we were two guys sleeping on couches in two opposite corners of North America, wondering what our next product should be.

We needed to work out to keep ourselves sane, but realized that when you try to go to a gym where you aren’t a member, you almost always have a bad experience. Thus, Gymsurfing was born to help you work out wherever you are.

In just 6 short months from our launch in May 2014, Gymsurfing had created the largest network of gyms of any fitness pass app, totaling over 200 gyms in 18 states and 2 Canadian provinces.

We are extremely excited to tell you that we have been acquired by fitmob! Fitmob is an unlimited fitness program that gives you access to all the best gyms and studios around America. It is currently available in San Francisco, Seattle, Portland, Dallas, Austin and Philadelphia.

Soon your favorite gyms from Gymsurfing will be live on fitmob, and you will be able to work out as many times as you want for one flat price. After seeing fitmob’s amazing growth and culture, we couldn’t help but feel that it was a perfect home for Gymsurfing and we decided to join the team here in San Francisco.

fitmob is normally $99/month, but because you’re a Gymsurfing user, you can have your first month of fitmob for just $1. Click here to sign up for fitmob for $1 per month. 

Check out the full story on TechCrunch. Thank you for everything, and we can’t wait to keep helping you work out wherever you are.

Kevin and Dustin,
Gymsurfing

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Entrepreneurship

How I Quit My Job, Moved to California, E-mailed Tim Ferriss, and Got Angel Investment

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Don’t Quit Your Day Job

There’s a depressing old adage: “Don’t quit your day job.” It has the same ring as “You can’t fight City Hall,” it seems specifically designed to prevent people from trying.

I loved my job in Manhattan. I was an account manager at a Flatiron marketing agency called Mirrorball with a really awesome team and a great culture. It was a “work hard, play hard” ad shop with cool clients and fun coworkers. Then one weekend in May of 2012, I read Kill Your Inner Wantrepreneur and it got some gears turning. I had an idea for an event marketplace called Speakeasy. In retrospect it was really just a clever event ticketing idea, but I was determined.

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A New Startup Idea

My roommate Anthony and I quickly covered the walls of our loft with post-it notes. We designed every screen, every feature, and every little use case we could think of. We were on to something, we thought. Anthony was a newly unemployed developer and I, a sales and marketing guy. I figured I could work nights and weekends, and maybe get somebody on oDesk to build the MVP and we’d see where it went. Anthony disagreed and said you never get any good work from freelancers, and we should work on it full time.

Each day at work the idea grew on me. I pitched anybody who would listen, and eventually I convinced myself this was such a great idea I should devote myself to it fully. Within a month I had given my notice at work, and committed to living on my savings for however long it would take.

The decision to leave New York was not hard. New York is kind of like a daily punch in the face, I am from there originally, and I was eager to check out the west coast.

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Before our first investor meeting at First Round Capital. They said no.

 

Heading West

Two weeks later, we moved to California. We stayed with a friend in Potrero Hill while we were getting ourselves situated, and started emailing investors constantly. We must have emailed about 300, got lots of warm intros, taken some calls, had some meetings, but were always met with a polite no.

Bringing Them to Us

We remembered another old adage: “Work smarter, not harder.” With all Paul Graham’s advice about “hacking non-computer systems,” it occurred to us we just needed to do something that would get investor attention and make them come to us instead of emailing all of them.

We brainstormed for about a day before we came across the Dressrush deck, aka “the pitch deck heard round the world.” We had the idea of making a funny parody of the deck, but with even fancier javascript effects. They used impress.js, so we used a library called jmpress.js that allowed you to map your slides into 3D space. The resulting deck was pretty spiffy (broken link sorry) and kind of hilarious if you had seen the original deck.

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Sending it Out

The next day, we wrote a blog post about the process and about our deck. Among the people I decided to send it to was Tim Ferriss, with whom I had a mutual friend, but it was still a pretty cold e-mail. I said something like, “Hey Tim, I heard you do some angel investing. Check out our deck and let us know if you’d like to chat.”

Tim replied about 6 hours later. He said he was going to pass. My heart sank a little until I read the rest of the e-mail. He said really liked the deck, and he tweeted about it.

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What happened next was pretty surreal. Tim had about 500,000 followers at that point and this definitely got us attention. We received calls and emails from investors all over the country. One of the investors was from Southern California and he asked for a meeting the following week. We rented a car, drove down, and shook on it. The deal closed two weeks later.

Conclusion

As an aside, my biggest regret is that I didn’t read The Lean Startup before I quit my day job, but otherwise, the old adage is true: Work smarter, not harder. Use your time efficiently, find clever shortcuts, and you will be able to achieve the same tasks in a fraction of the time. I have no doubt we could have gotten investment the old fashioned way eventually, but when it comes to standing out from the crowd, this is the kind of hacking you should be thinking about.

h/t to r/startups for inspiring this blog post!

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Entrepreneurship

How Living Out of Suitcases Became a Fitness App

The story of Gymsurfing begins in June 2013, around the time we found ourselves increasingly at a loss for which was the best city to locate our startup. On one hand, we had pretty deep networks in New York and Toronto, but on the other hand, San Francisco is startup central for many billions of good reasons.

We've been all over

Pulled to these cities by a combination of friends, lovers, business connections, and equal helpings of good and bad advice, we found ourselves on planes, trains, and buses all the time. We were living out of suitcases, bouncing from sublet to sublet, and disguising our metropolitan attention deficit disorders as “travel.”

Friends remarked, “Wow, your life is so cool, you travel all the time!” Secretly, we wanted somebody to reveal to us the answer of where we should live. Life was becoming, as we say in New York, a schlep.

Eating healthy is pretty challenging when you’re on the road, but getting to the gym is even harder. When you finally have time, you sign up for a free gym trial, pretend you’re going to join, use up your 3 days and move on to the next gym. The onboarding process at gyms is positively frustrating. I can appreciate what they’re trying to do, of course, and many of them are talented salespeople, but I got pretty tired of lying to them and started telling the truth: “I am not going to join. Just let me work out.”

Done this like 20 times

Then one day after a workout at Goodlife in Toronto, I found myself on HotelTonight (because my sublet was not suitable for bringing a date home.) For us two startup guys, the two thoughts together seemed so logical: HotelTonight + gym = the perfect solution for people like us. A way for the impulsive, itinerant, or otherwise non-committal to book a hassle-free workout with a few taps on our iPhones.

#dolo

An ideal use case for Gymsurfing is this: a young woman, eating lunch in Dolores Park with her friends, excuses herself to get back to her office for a conference call. When she gets to her office, she gets an email saying the call is postponed. She opens Gymsurfing, books a workout around the corner for the price of a burrito, grabs her gym bag, and the rest is history.

Gymsurfing: HotelTonight for fitness. Grab the beta here.

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Entrepreneurship

3 Ways We Got Screwed by Picking the Wrong Lawyers for Our First Startup

One of those oft-overlooked things that every startup needs is a lawyer. It doesn’t really gel with how startups think: everything we deal with, from new APIs to new companies, works in a super simple, user-friendly way. Law is complex, ugly, and old, and we are inclined to believe somebody should be working to “disrupt the law industry” too.

Once upon a time in 2012, for our first startup, we hired our friend to be our attorney. There were a few lawyers in our friend group, and a couple are very well-respected in New York. One of them does big corporate law, so I assumed I was in great hands when I hired him. I thanked him for taking on my fledgling business even though we didn’t have much money. My first mistake: I hired my friend to be our lawyer.

1. The Ousted Cofounder 

Paul Graham often says that 50% of startups fail because of cofounder disagreements; this nearly happened to us. Right after the check from our lead investor cleared, I started noticing some changes in my cofounder. I didn’t see any real work, the excuses began piling up, and I panicked. I brought on another dev friend on a temporary basis because I was afraid. A few weeks in, the new dev sent me a link that made my stomach turn: it was a Github commits graph, and it showed 0 commits from my original cofounder from the day our first check cleared to the present day, a period of nearly two months. My fears were confirmed.

I lost a lot of sleep that week. Should I fire my cofounder? I bit my nails to nothing. I shook nervously. I had my first real panic attack. I called our investors and they all said the same thing: the first guy needs to go. So I called up my attorney, and asked what the next steps were. He said the only option was to buy the shares. What?! Buy his shares?! I can’t afford that! I said. Why is there no provision in the Shareholder Agreement for this situation? You see, neither of the cofounders were on a vesting schedule. There was no way to simply “vote him out,” and it had been set up this way intentionally. My attorneys said this was to make sure our investor did not have majority control before our shares vested, and even though we asked for a vesting schedule, it never made it to the Shareholder Agreement.

To complicate matters further, we lived together, and I was not be able to terminate the lease without his consent. I ended up buying his shares for more than what was even in the company’s bank account at the time, with my own money. It sucked a lot.

2. Incorporating Outside of Delaware

It turns out that not every company in the US is incorporated in Delaware; many non-startup businesses incorporate in the state they’re from. We are incorporated in New York State. Literally every startup lawyer we have discussed this with has told us the same thing: this is really dumb. In a future financing round, we had to reincorporate in Delaware before we could close. It was expensive and time-consuming, because New York State has extra hoops for you to jump through if you want to leave. New York, I loved you, but you were breaking my heart.

3. The Check That Had to be Sent Back

The situation with our ousted cofounder severely delayed the next piece of investment we were expecting. It was corporate housekeeping that had to be finished before we could receive more capital. So after it was all cleared up, things seemed on track. An agreement was signed with our investor, the check was sent to our attorney’s office (seeing a theme here?) and then nothing. A week went by. I asked what was the matter, and my attorneys said that “regulations” prevented them from sending it. A full two weeks after they received the check, they wired the money back to our investor and they asked him to wire the money to us directly. How embarrassing.

Conclusion

When choosing a startup lawyer, fight the urge to hire a friend, somebody cheap, or somebody who doesn’t have any startups as clients. It sucks to have to spend a lot of money on something that isn’t directly growing your business, but the cost of choosing the wrong lawyers for us was surprisingly high. I am pleased to say that for this startup, we have amazing lawyers that are fast, incredibly knowledgeable, and have lots of startups as clients. We’ll never make the same mistake again.

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