I have gotten my fill of Brad Feld these days. First I read finished reading his book “Startup Communities” which was excellent. I’d like to see all the great entrepreneurs in New Jersey establish a growing startup community, and am trying to do what I can to lend a hand. I learned a ton of things in the book that I am implementing and thinking about. One of the most striking pieces of advice in the book was the concept of “Give before you Get”.
I also got to see Brad live at the NJ Tech Meetup in Hoboken on Monday 4/15/2013. He went into more detail on the concepts in his “Startup Communities” book as well as talked about his new book “Startup Life” that he wrote with his wife Amy, and a new book on Startup Boards that is still in progress. Clearly, I wasn’t the only person who was inspired by the “Give Before you Get” concept – a blog post was written right after the talk by one of the attendees – Brian Donohue.
I was the guy that asked about the fact that NJ has such a large service provider community, and how to handle the fact that there’s a ton of people here that make a living by providing services to their clients – and how do you get them to “give” something they are used to charging for? I’ve been thinking a lot about this – while I absolutely love the concept Brad is espousing, it has some reality check issues I’ve been struggling with:
(1) We’re not all independently wealthy – It is awesome that Brad gives so much back to the Entrepreneurial community – very few VC’s do, and it totally separates him as one of the best VC’s in the industry. At the same time, he can afford this financially – he doesn’t need to work anymore if he didn’t want to. The issue I have is many people who are happy to give also need to make a living – they are not wealthy enough to give without getting back enough for a living wage.
(2) NJ is a “service oriented” economy – I feel like we’re a bit lopsided here compared to maybe other Startup Communities. I have read (and heard) that NJ is one of the worst states at keeping their young adults in-state for college as well as after college – so we don’t have the young guns who are more open (and able) to live on raman-noodle wages. We also have tons of legal and accounting firms, likely a more dense population than most areas – so lots of people chasing a smaller number of startups. And a LOT of Fortune 500 companies that can afford to pay higher fees (and salaries) which takes a lot of the Oxygen out of the room for startups.
So, what to do? Some more thoughts:
(1) Let people make “easy asks” – as Brian mentioned, things like introductions, quick questions, advice – these should all be given for free – early and often. If it takes you less than 15 minutes to do something for somebody, just do it.
(2) Create “win-win” relationships early on – once the Startup needs more than 15 minutes of your time, or wants you to do “real work”, then it makes total sense to charge for this. Frankly, Brad does too – although differently than a service provider. Brad charges by investing – and now he has “skin in the game” so there’s a strong motivation to see you succeed, because he benefits from that as much as you do. But perhaps don’t charge your regular rates… or make some of the success back loaded (which is what Brad and all VC’s are doing), where you can make a small amount up front, and perhaps a bigger upside on the back end if things go well.
I’m still thinking pretty hard on this overall topic – from the perspective of an entrepreneur, service provider, and other aspects of the Startup Community Ecosystem. I’d love to get your thoughts/suggestions/ideas here, particularly those of you in NJ that are interested in creating a vibrant Startup Community here. Thanks!
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