In this episode, you will learn:
Did you ever build a fort when you were a kid? Chris Heivly has been building successful startups & communities with that same mindset for decades and he shares his story in this episode and his latest book called “Build the Fort”.
Long before Waze existed or Google Maps, there was MapQuest, which started in Lancaster, Pennsylvania with maps on CD-Roms and went on to become a unicorn in 1999. Chris Heivly was the co-founder of MapQuest, and that was just the beginning of his entrepreneurial journey.
Chris has been building and investing in startups and the communities around them for decades. From the Startup Factory in North Carolina, to TechStars where he served as Senior Vice President of Ecosystem Development, he has spent the last 12 years building ecosystems around the country.
Chris has the experience of a 63 year old, the energy of a 40 year old, and the humor of a 12 year old, which is exactly the mix needed to help a large number of entrepreneurs and innovators.
Chris’s book “Build the Fort” outlines five basic elements that are common to fort-building, startups and innovation ecosystems:
1) Socialize your idea without fear or inhibition
2) Identify & marshal the people you trust
3) Gather the minimal resources closest to you
4) Act on the smallest & simplest forms of the idea
5) Take action building your fort
He produces and hosts a podcast called your Startup Community with Brad Feld and Ian Hathaway, and he recently released his second book entitled Build the Fort a Startup Community Builder, and it's a global field guide for how to get involved, how to create impact and fund and accelerate your entrepreneurial ecosystem.
Chris is a best-selling author, contributing writer for Inc.com and a public speaker. He's spoken to over 400 audiences about startups, corporate innovation and the startup community ecosystem development.
Chris is a graduate of West Chester University of Pennsylvania with a bachelors degree in Geography and holds a Masters degree in Geographic Information Systems from University of South Carolina.
I know you will enjoy this episode as Chris shares his wit and wisdom with us on the SmartMoney Ventures Podcast!
In this episode, you will learn:
Did you ever build a fort when you were a kid? Chris Heivly has been building successful startups & communities with that same mindset for decades and he shares his story in this episode and his latest book called “Build the Fort”.
Long before Waze existed or Google Maps, there was MapQuest, which started in Lancaster, Pennsylvania with maps on CD-Roms and went on to become a unicorn in 1999. Chris Heivly was the co-founder of MapQuest, and that was just the beginning of his entrepreneurial journey.
Chris has been building and investing in startups and the communities around them for decades. From the Startup Factory in North Carolina, to TechStars where he served as Senior Vice President of Ecosystem Development, he has spent the last 12 years building ecosystems around the country.
Chris has the experience of a 63 year old, the energy of a 40 year old, and the humor of a 12 year old, which is exactly the mix needed to help a large number of entrepreneurs and innovators.
Chris’s book “Build the Fort” outlines five basic elements that are common to fort-building, startups and innovation ecosystems:
1) Socialize your idea without fear or inhibition
2) Identify & marshal the people you trust
3) Gather the minimal resources closest to you
4) Act on the smallest & simplest forms of the idea
5) Take action building your fort
He produces and hosts a podcast called your Startup Community with Brad Feld and Ian Hathaway, and he recently released his second book entitled Build the Fort a Startup Community Builder, and it's a global field guide for how to get involved, how to create impact and fund and accelerate your entrepreneurial ecosystem.
Chris is a best-selling author, contributing writer for Inc.com and a public speaker. He's spoken to over 400 audiences about startups, corporate innovation and the startup community ecosystem development.
Chris is a graduate of West Chester University of Pennsylvania with a bachelors degree in Geography and holds a Masters degree in Geographic Information Systems from University of South Carolina.
I know you will enjoy this episode as Chris shares his wit and wisdom with us on the SmartMoney Ventures Podcast!
Welcome to the Smart Money Ventures podcast, where we highlight active leaders in the global ecosystem of venture capital, entrepreneurship and innovation. We give you access to insights from successful investors and entrepreneurs that most people just can't get access to, and the only reason they take our calls is because we've been in the trenches with them for decades. My name is JD Davidson, I'm your host for this episode of the Smart Money Ventures podcast, and today we have a very special guest that I have great respect for. You know, long before Waze existed or Google Maps, there was MapQuest, which became a unicorn in 1999. Chris Hively was the co-founder of MapQuest, and we're going to hear more about that story in just a minute.
Speaker 2:Chris also served as Senior Vice President of Ecosystem Development for Techstars, and for about the last 12 years plus, Chris has been helping build ecosystems across the country. Chris currently serves as Managing Director of the Startup Factory in North Carolina, and it is one of the largest seed investment firms in the Southeast US, and under his leadership, the firm has made 35-plus investments in just four years in emerging technology companies. Chris is a multifaceted investor with deep experience making in angel investments, corporate VC and micro VC placements as well. He produced and hosts a podcast called your Startup Community with Brad Feld and Ian Hathaway, and he recently released his second book entitled Build the Fort a Startup Community Builder, and it's a global field guide for how to get involved, how to create impact and fund and accelerate your entrepreneurial ecosystem. He's a best-selling author, contributing writer for Inccom and a public speaker. He's spoken to over 400 audiences about startups, corporate innovation and the startup community ecosystem development. That's an amazing background. Chris, Thank you very much for being with us today and we appreciate you joining us.
Speaker 3:Thanks, JD. I feel like I just listened to my obituary.
Speaker 2:Well, let's hope that's long in the distance, right, let's hope Well. So to kick off the program, we have to start with the map quest story. There's not a lot of people that can talk about a unicorn. That happened in 1999 and the buildup to that, and your book mentions a story that fascinated me. There was a conversation with your father about your choice of your college major and how geography and computers sort of collided to begin your entrepreneurial journey. So tell us how that all unfolded.
Speaker 3:Yeah Well, like many of us entrepreneurs, it's not a straight line story. I went to a local state college outside of Philadelphia for a year, dropped out for a year and a half, was a pipe fitter for about that year and a half and then realized that college at three to four hours a day was actually a lot easier. And when I went back, my dad's brother a young you know a lot of years between them but was also a geography major and was getting a PhD at the time and was also kind of a computer-y, and he said why don't you take a couple geography classes when you'll go back and maybe you'll like them? And so I did. I think my father always thought of his brother as kind of just like one of those kind of academic misfits kind of thing, never having a real job. And so when I said I love this geography stuff, I'm going to be a geography major, I could see like the disappointment on his face. But I said you know I really like it and we'll just see where it goes. And then one of those first classes JD was a computer mapping class.
Speaker 3:Now, let's put that in context for 1979, 80. These are still mainframes, it's post-punch cards but it's still dumb terminals and that just lit my fire. And what was interesting which is really a hallmark of the rest of my professional life, is that professor and I were figuring this stuff out at the same time. So when I did go back to college I viewed my professors as peers, not as like gods that I needed to get a grade from. I was just like, hey, this is pretty cool shit, let's figure this out. And so that's how that journey started. And then he encouraged me to take a computer science class. So I actually learned how to write code as an undergraduate geography major in 1980, which is pretty unheard of, but what like?
Speaker 2:were you coding in basic?
Speaker 3:Yeah, Fortran mostly. And then, once the PCs came out, basic was the best thing you could do. I had a little compiler and yeah. So I just, as you said in your intro, jamming two things together that had never been jammed together before, it's sometimes the secret to success. So for me it was mapping. I was a terrible geographer, not a very good cartographer, but I love maps and geography, the concepts, and I love computer science. So that's the story.
Speaker 2:I think it worked out that yeah, exactly. Well, and I think it's a lesson in follow your passions and the pathway will emerge.
Speaker 3:Yeah, I mean, you know you try to like think about artists, right? Yeah, you're passionate, but you also have to figure out how to survive. I knew I was going to figure out how to survive, but, yeah, combining that with your passion, you know, I just remember I had to pay for my. You know, when I went back my dad said I'm really proud of you, but this one's on you. And so I lived at home and would either, if my car was running, I drive, or if it wasn't running, I'd stick my thumb out back when you could do that. And if that didn't work, I then took the bus. But there's many times I can and we had one car. So there's many times when I came back after a day of college that I said, hey, can I borrow the car? I want to go back out and goof around with these computer things and see what's going on. So that's when you know you're onto something, when you can't get enough of it.
Speaker 2:Well, and it ties right into building a fort. Right, channel your inner 10 year old. Find something really cool to work on. Invite some friends and see what happens, but just focus on problem solving.
Speaker 3:Yeah, I mean like thanks for setting that up, because you know, that's kind of the gist of I think what I'm good at these days is simplifying complex things, and I always tell people yeah, I did a talk yesterday in front of 250 high school kids, all interested in entrepreneurship, and I said how many of you built forts as a kid for you not too long ago? And no matter what the audience is, jd, everyone raises their hand and you're like I built forts, nice, everyone does, and so it's a great little metaphor. And you know, I think as adults and you and I have been around the band a few times we just over complicate things all the time, don't we?
Speaker 2:Absolutely.
Speaker 3:Our heads, our brains are our worst enemy, right? So maybe just chill out and pretend you're a 10 year old building a fort. That's the idea.
Speaker 2:Well, and I think it's actually important to give yourself that creative license to experiment, and I think the brain can be your enemy, but the brain can also be your greatest asset, because those of us like yourself who are able to see a vision of something and make connections that others don't, that's the asset. The downside of it is we tend to get distracted by shiny objects.
Speaker 3:Shiny objects and things that don't matter, but we don't know that they don't matter. Right, right, one of my favorite little stories and I exaggerated a little bit for making a better story, but like early in the kind of the accelerator, incubator kind of days, you know I, we would talk, my partner and I would talk to tons of people on. You know we're sitting right in Durham, north Carolina, home of Duke University, eight miles from UNC Chapel Hill, so a lot of ecology stuff and invariably, you know, three or four MBAs would come over and like we're going to start a company, I'm the CEO, I'm the COO, and then, like there's my favorite, like I'm the CFO and I'd look at the guys as a CFO, I'm like what do you have to fricking count? There's nothing to count, right, we don't need a CFO for about.
Speaker 3:You know, for three or four years to come, yeah, what else are you going to do? Are you going to sell something? Are you going to build something? That's what I want to hear. Anyway, as a finance guy, I knew you'd appreciate that Absolutely, Absolutely Well.
Speaker 2:On the map quest story, what struck me is that there was a singular focus on the problem that you're solving is making it easier, but there was a continuum of about eight or nine different technology iterations from the beginning, not at the punch cards, but to the you know you were putting maps Well, you were talking about triptychs and then CD-ROMs, and then to what most people understand is ways, Walk us through the technology progression and yet tie it into a single problem that you were following through its iterations.
Speaker 3:Yeah, I mean, that's a I rarely get asked this question, so I love that you've done it and found it, because I think it still happens today. There's still lots of businesses that haven't been fully digitalized or you know, however, whatever word you want to. You know, computerized, internetized, whatever you know, worldwide web here. But you know, for us what we knew is we knew not maps as maps, as an object, but what people were. You know. Maps asked after three or four questions right, where is it? You know what is the closest and how do I get there? Like that hasn't changed. So the question is how can we make it easier for people to access that? You mentioned triptychs.
Speaker 3:So, if not you and I, at least our parents and, to many listeners, their parents or grandparents. When they went on a big road trip, they maybe went to AAA or some other auto club at Sears or 14 or 15 other places and they printed out a guide about here's how you drive, you know, from Columbus, ohio, to Orlando to go to Disneyland or World and, by the way, along the way, here's kind of a book of hotels and you know, and that made sense for a lot of people, but for us it was like that doesn't make any sense. There's now these computers that could actually do it for you and, by the way, allow you to kind of maybe modify it for your. You know why does everyone of Columbus have to take the same roads to Orlando, right? And so we just used whatever technology was available today.
Speaker 3:And for me, this computer mapping guy, it was like, yeah, let's take whatever exists. First it was a desktop PC, then, you know, we rolled them in every auto club and so, behind the scenes, they made that trip tick themselves, you know, in the moment. So it was a cost benefit to them. Later on, I was spending a lot of time in California. By the way, mapquest is baked in Lancaster, pennsylvania, I don't know if you knew that.
Speaker 3:No, Obviously, the high tech mecca of South Central Pennsylvania. Oh, of course you know, for every Ohioan. You know home to 125,000 Amish people, right? Yeah, so that's where we baked that. So you know, unicorns can come from places other than Boston or the Valley, or you know Seattle or Austin.
Speaker 3:But I was spending a lot of time on the West Coast and just getting emerged in that whole ecosystem and bringing the best practices back. And then we started hearing about a CD-ROM, right. So it was like, well, now we can do it at home, Now they don't have to go to an auto club. We did an Apple Newton. Most people don't know that Apple had a device Early PDA In between Steve Jobs and it failed, but we were the top selling product on that. And what was interesting, JD and I know this is getting long in the tooth here, but every one of those things we just were out listening to people, talking to people to understand what technology was coming next and then going back to Lancaster and saying, all right, how can we kind of create a full form of what we're doing? That fits into that and let's experiment and try it out, because we were probably a bunch of dumb central Pennsylvania people who didn't know better, right no?
Speaker 2:fear Right, absolutely. And the lack of fear is what gives us permission to experiment. Because, as you've mentioned before in your book and your talks, and also Alexander Osterwalder, who wrote the business model canvas and the lean business canvas, the whole thing is to give yourself permission to experiment, because a startup company, as Alexander says, is not a smaller version of a larger company with HR and finance and admin. A startup company is a product in search of a repeatable business model. And, to your point, it's important not to sit in the mad scientist mode in the lab by yourself and try to quote, unquote, figure it out. Go, get a dozen of your friends and crowdsource the wisdom of finding and experimenting and finding, as people talk about your lightning in a bottle.
Speaker 3:Yeah, one of my favorite lines is when you're the only one in the room, then every decision is perfect.
Speaker 2:And talk about a lack of diversity of thought You're only bringing. You have an audience of one, so your sample size of potential solutions is notably singular.
Speaker 3:Yeah, and let me just say with no judgment it starts with us, but it's got to get bigger than us as quickly as possible, and hence rule one of building the forward is go out and socialize that idea with no fear, inhibition. I tell people, even the most introverted people, listen, do them one-on-one, do them over zoom, I don't really care, but kind of like Steve Blank and Alexander said, you better go talk to 25 people and what I tell people is you'll be amazed at what you'll learn just by describing what you're thinking about to other people. They'll ask questions that you haven't thought of, and those questions you'll go back and go huh, and then you'll kind of bend it a little bit and mold it this way. And, by the way, that doesn't take any money, exactly, you don't have to raise money to do that, right. So go start that yesterday.
Speaker 2:Absolutely, Absolutely, yeah. And it is that culture of experimentation. Where it's not a failure, it's. You know, isn't Thomas Edison right 10,000 ways that the light bulb does not work before you get the 10,000 at the first right.
Speaker 3:Exactly, and you know I love the word experiment and I really think that this early phase is more of a mindset. That's what I try to do in my workshops and my talks and the one-on-ones I do with you know, the probably 5,000 founders today is really try to figure out if they have the right mindset, and it's got to be this mindset. I happen to use the word discovery and a lot, and so it's like listen, not only do you not know answers, you don't even know the questions yet, right, so get out there and just you know, get out there and have this mindset, like I want to uncover or reveal or find you know that product market fit, find that customer or potential customer front, find how all this is molded together. That's your job is to have this curiosity learning. I don't have all the answers yet. I have a thesis but I don't have any answers yet and I think the best ones do that really, really well.
Speaker 2:So when I founded my first software company, I used to say that my job as the startup founder and CEO was to take the idea, pitch it to as many people as possible, invite them to shoot holes in it and then go back to the office and figure out how to fill in the holes and get with the team and figure out how to fill those holes.
Speaker 3:Yeah, and after that holes field figured out what the next set of holes are.
Speaker 2:Right, it's an iterative process and, to your point, you can't have any fear in that. So you talked about the importance of socializing the idea. That's one of your five principles that you laid out in the book Build the Fort. Tell us those five principles.
Speaker 3:Let's I better, you know, be able to remember what I wrote right. So, yeah, yeah, so you know. One socialize the idea. Two find partners, which invariably happens. After you socialize the idea, invariably you'll find some people that will work on it with you. They don't necessarily have to be co-founders, they could play any different number of roles, but start to develop this close tribe of people that are going to work on it with you. I believe that the best entrepreneurship is more of a team sport than a solo sport. Again, that doesn't mean you have to have founders and employees per se, but you know, you have this group of people that you can kind of lean on.
Speaker 3:The third thing is to then corral the assets that are closest to you. So if you go back to Fort Building and if you built forts outside, the first thing you have to do is like where's the wood going to come from? Right, you got to go out and find it, you know, especially back in our day, you didn't, you know, go on Amazon and bought, you know, buy the Fort Building kit, you know. Or mom bought you for a thousand dollars. You went out and scrounged for stuff, and I'm amazed at how many startups get stuck trying to think like, well, I need a hundred thousand dollars to license this data or to buy this software. And I'm like, no, no, no, this is the MVP world, right, how do you hack it together so you can put it in front of some of those people you just talked to and get the reaction to it?
Speaker 3:The fourth thing is keeping the scope small. Again, back to Fort Building. If you and I were building a fort back in the day, you better be done in about three days, right, or you lose interest. And that scope, what I find is we all have this. What wakes us up in the morning is this evolved dream, right, but that dream is three to five years out, right, when you have CFOs, right. So, but the question is, you know, back to your point about. You know, startups are not small versions of large companies. You have to earn your way to get to that point three years from now. So I'm a crawl, walk, run, iterate, pivot, keep moving the thing forward. You know very few companies gets at the success stage, are exactly where they started, right, they move around, they find different markets, they find different product types and features. So in that discovery phase, you got to keep the scope small.
Speaker 3:I love three month chunks. So here we are. Let's pretend it's well, it's late November, so let's pretend it's December 1st. So I say to myself all right, december, january, february, it's March 1st. What do I want to know March 1st that I don't know today, and what would be the two or three most important things I have to do or have done for me to say it's worth spending another three months? So that's principle four. And principle five is just do it. Don't ask for permission, don't look for overlooking, for data, because if there's data, then it's already been done In the immortal worlds of Nike. Just do it, get started, initiate the discovery process, because there's nothing like momentum and confidence to start, kind of telling you you're on the right track. Exactly that's the big five.
Speaker 2:And what you talked about in the fourth one was a very important thing is clarifying and defining exactly what problem it is that you're trying to solve for and, even more specifically, what is the specific customer set of people that you're trying to solve for? Because typically it's not just one problem, it's that person has several problems and, to your point, immersing yourself in the customer problem is the environment where it's, the sandbox, where you experiment.
Speaker 3:Yeah, in our little world we talk a lot about product market fit and you shouldn't scale your company until you have product market fit. And I always remind people that there's three words in that phrase. There's product has to meet a market, a market has to want that product and you have to figure out a way to define or look to see that hey, it fits. And so part of the discovery is usually figuring out that the way you envision the product is not what your market looks once, or that's not actually the best beach head get started market. You probably should start over here a little bit, because they're more anxious and have more angst around solving a problem, which are the best people to start with right, because they'll let you give them not perfect product and help solve their problem. So that's that journey we're on. That can last, sometimes up to three, four years.
Speaker 2:I agree. You mentioned Steve Blank, and one of the things he always says is get out of the building, go talk to customers, and I think probably one of the greatest pieces of advice that I often give to entrepreneurs is do not delay interacting with your customers. I see far too many people waiting for it to be perfect, and not that there isn't a season for that, but it's a short season because no plan survives first contact with the customer. So the sooner you can get into that arena and get some dust in your face and some sweat off your brow, then you'll be learning what the customer, what the market, wants and how to adapt your product so that you get that, as you say, fit.
Speaker 3:Yeah, I think the other cliche that I love, which maybe sometimes hits home emphasis on the word hit is Mike Tyson's. Everyone has a plan until they get punched in the nose. The first time you bring your unbelievably whether it's a concept or a prototype or product to a customer and they punch you in the nose and go, nope, not interested. That's a tough day, right, and so let's figure out a way to either get that hit earlier on or at least be ready for that hit and say, well then, how about this?
Speaker 2:And I think that's what's important for us to communicate to entrepreneurs, because I think a lot of times people romanticize entrepreneurship I'm going to be my own boss. Oh, no, no, no, your customers are your bosses, right, and you will eventually have a board of directors. So let's be realistic about it and create an environment where, when you do get kicked in the teeth, you understand that it just gives you an opportunity to pivot or iterate and get closer to it. Yeah, a new plan? Right, exactly, well, and that gets to the ecosystem part of the conversation, because creating an environment where not only is it safe to experiment and get kicked in the teeth once in a while, but it's a nurturing environment, that we not only expect them to pick themselves up by the bootstrap and get back up, but that there's a few people around them helping them back up.
Speaker 3:Yeah, I mean back to the part that I think entrepreneurs a little bit more of a team sport than a solo sport. That team doesn't have to just be your co-founders or employees, right, that team could and should be your community. You know, speaking of romanticizing, we talk about Silicon Valley as this Mecca. Well, the reason that it's a Mecca is that it's a very mature, well-connected, easy to navigate. Language is understood, tons of awareness about how the right way to do all this is and it's been that way for 30, 40 years. And places like Raleigh, durham or Columbus or Indianapolis or Poughkeepsie, new York and yesterday I was in Hudson, north Carolina. I'd never even heard of it before they have a little hub station for people to gather about entrepreneurship.
Speaker 3:It doesn't matter where you're at, there has to be a community around you to kind of teach you and, by the way, teaching in the broadest sense, like not just to do the things we just said, like don't wait till your product's perfect, get out and talk to people, or maybe you should find a co-founder, or how do you?
Speaker 3:You don't need a CFO right now. All those little nuanced things that can potentially waste time are friction points on your entrepreneurial journey. Great communities create the awareness and that learning opportunity, and it's not that to be formal learning, like you're going to a class, right, just you and I having a cup of coffee and sharing a story, and you're like, oh, that's the way that's thought of. And so, maybe to answer a question you didn't ask, I've been spending the last really 10 years focusing on communities and how communities get built, because that's a way that I can help influence, hopefully, thousands of entrepreneurs, as opposed to one-on-one Like a good startup guy, jd. It's new, there's not a lot known, we're still trying to. There's more questions and answers about how to do this, but I've dedicated the last six, seven years and read a ton of stuff and talked to literally a thousand people about this, and so that's what wakes me up in the morning is the idea of helping to build community.
Speaker 2:Absolutely Well. I'm enjoying your book Build the Fort for sure, and so congratulations on that. That's your second book, isn't it?
Speaker 3:It is, so it's a little confusing. I wrote the first one that's called Build the Fort, kind of how to Start Anything, now that I realize the Build the Fort is going to be kind of a series. The second one is about how to be a good community builder. I got to go back and reframe first one. That takes effort so that's hard, but the way to think about it is. The first. Build the Fort both available on Amazon is about how to be a better founder, so that's specifically for founders. And then the second one is about how to build community, which includes founders, investors, economic development folks, chambers, university people, what role you can all play to help your community thrive. And when the community thrives, it waterfalls down to you in whatever role you have.
Speaker 2:What I love about your book is that it's drawing on some deep experience that you have I mean, being Senior Vice President of Ecosystem Development at Techstars has got to be chock full of amazing experiences and stories, and then you leverage that experience into building the startup factory which, as I said, is one of the most active seed investment vehicles in the Southeast. Talk to us about those two experiences and how it's shaped your ability to impact larger numbers of entrepreneurs. Yeah.
Speaker 3:I mean, it's a great little. You know there's some subtlety in this folks, but, you know, stay with the story, because I think there's some really great lessons here. I'm 63, with the energy of a 40-year-old and the humor of a 12-year-old right, that's what I like to share. And so with that 63 comes a ton of experiences and a ton of opportunities to be in things. So I was lucky enough to start reading about Techstars and Y Combinator and kind of 2009-ish timeframe they're both about two years up and running and just thought well, if one startup is fun, then 10 at a time should be a complete blast. Right, right, manually, need to learn something. But GRND is a Reddit website that can и keep me alive and do something, nou, about humans, and so kind of stood up a couple of different versions of what we now know as the startup factory, met Brad Feld and David Cohen. You know legends in this business, you know two of the four founders of Techstars, and they just said here's what we know, here's our whole accelerator playbook. And though we didn't know at the time, brad was kind of laying out and, by the way, there's a community aspect of this and this is how you do it. He later on went on to write his first book about this, called Startup Communities, just a few years later. So they were mentors, right back to just reaching out to tons of people and seeing what they know and do, and I learned a ton from them. That helped me build the startup factory with a partner, dave Neal, and make all those investments. This is all in Raleigh, durham, north Carolina. While doing that, it's just, it's going to happen. If you kind of stick your head out there and start doing things, you see gaps and I started, you know, filling those gaps, putting events together.
Speaker 3:I put a funky circus themed job fair called the Big Top Nice, you want to talk about. You know experimenting and creative juices. You know job fairs suck. What sucks about it? They're too formal. Let's blow that up. I ran 15 of them over five years. Hundreds and hundreds of people found jobs because of them and, by the way, you have to eat hot dogs and drink beer. So you know a couple of the good things in life That'll take the stiffness out of the room. Exactly, exactly, I think, by the tagline. It was called people just. It was called tech jobs under the Big Top, and then people just called it the Big Top and the tagline was no suits, no resume, no bullshit Like, just connect with people, right? I share that story to talk about.
Speaker 3:You know, if you care about entrepreneurs and startups, you'll find gaps in your community and you'll want to fill them Right. And so I ended up doing that in a lot of ways, and sometimes you do them on your own and sometimes you work with others and sometimes you throw ideas and someone else picks them up and you help support them on that, on whatever their little passion project is. And you know, I started to see the way we did it and the success we did it, a lot of it based on Brad's book. And so a bunch of years later, you know we're putting the startup factory on hiatus for a while, not making new investments. And I'm talking to Brad and David and they're like hey, do you want to work together on something? And you know these are people I think are you know the dude dudes, right? They're like you know people I look up to and think of awesome thought leaders. And you know it's like it's like your best idol asking you if you want to hang out. And you're like, yeah, I do, exactly Right.
Speaker 3:And so we figured out how to build a consulting business around the lessons they learned in Boulder, the lessons I learned in Raleigh, durham, and how to kind of put them in a scope and a context and a framework that others could hopefully learn from. And God, I mean it was other than the travel, but I mean it was. I probably visited I don't even know how to count 80 to 100 cities over five years and, wow, from speaking at events to actually doing kind of three month to three year consulting deals all over the world and just seeing just the energy about how entrepreneurship can happen in small cities and big cities alike. And I, I thank those guys for asking me to, you know, drive that forward and to work with them. And the books, the product of that, you know, obviously. And yeah.
Speaker 3:I felt like it was just so, like perfect for me, like that was the thing to do in that stage of my life.
Speaker 2:There are times in our careers when things align in a way that make the path forward self-evident, and it's really neat when, when you can be aware when that happens and just move forward.
Speaker 3:Well, jd, I have to, I have to jump, I have to grab that because it's so true and you know, and I said there's some subtleties. What's the subtleties? The subtleties are like me in 2009 reaching out and saying, hey, can I pick your brain? Socializing the idea. And then I stayed in touch with them and I shared some wins and congratulated them on their wins and a couple of times I got them to come to Raleigh Durham and do a talk, staying building meaningful connections. I just think is the, is the like the foundation of everything? And then so the next, you know I'm sitting in Boulder going well, what are you doing? Well, if you want to do this thing together. And when I told people that I was going to do that, friends of mine all over the world I say, yeah, I think I'm going to do this thing. They're like this is the most obvious next step for you, like this is perfect. Like, to your point, like there wasn't.
Speaker 3:I remember calling my wife. I'm like I'm leaving Boulder flying home. I'm like I think I just got a job. I have a work friend by myself for 20 years. I said I think I got a job and, by the way, to their credit, you know, david Cohen says, is the CEO of Techstars at the time says, hey, do you want to do this? Like inside tech stars, outside tech stars, like we don't care? Right, listen to that for a second. Like this isn't, like this is the way it's going to work, and we, you know, it's like, yeah, we'll. Do you want to just figure it out? And I'm like, yeah, my ego's in check, I want to do it inside Techstars. I want, I want to, I want to leverage your brand that you amazingly build over the last 10 years, and but you know anyway, there's a spirit inside of what you just described, and that spirit is collaboration.
Speaker 2:That spirit has no ego and that spirit does not get drawn to hierarchical organizations. I think that's why I lived in California for 29 years, because it gave me the freedom. It was a place where I could spread my wings and experiment and not get my wings clipped every time I tried something new.
Speaker 3:No, that's not the way we do this, son, oh yeah.
Speaker 2:Exactly. Oh, that's amazing, and so I think it is that collaborative nature that is what drives programs like Techstars, startup Factory, many of the other ecosystems. And I think what's really neat is and I've heard you talk about this before and I feel the same way don't say that we want to be the next Silicon Valley. What we do want to do is learn things that worked in Silicon Valley, but we also need to know what our core identity is, whatever that is. You know there's in economics, there's competitive advantage, but there's comparative advantages right In Ohio, for example.
Speaker 2:Not a lot of people know the reason that Intel selected this place for the largest semiconductor plant in the world is because we are seismically boring in Ohio.
Speaker 2:We don't have earthquakes and, more importantly I just saw a map last week we don't have very many floods. We don't have hurricanes. We do have the occasional tornadoes, but those go to trailer parks, not data centers. But what's really interesting is be the best Ohio that you can be, be the best North Carolina that you can be, and one of the things we don't have to compete with Silicon Valley, because I saw a report I think it was from the Brookings Institution that hyper-concentration of capital and talent and resources in Silicon Valley is a problem, and so it's in everyone's best interest to fragment that and distribute it more evenly right, so that there's plenty of room to go around. There's, a rising tide really does lift all boats, and I think it's that knowledge that gives us the freedom to collaborate and not have to have an ego, because if we genuinely believe that a rising tide lifts all boats, then we're willing to have that pay it forward attitude and know that there's plenty to go around.
Speaker 3:Well, here, here. I mean, I've been preaching this for years and years and actually seeing it at work. Yeah, it's tough because one of the things that Brad and a guy that worked for me in Hathaway found in their second book on this called the Start of Community Way, of which my Build the Four, the Start of Community Field Guide, is kind of like a they're like peas and carrots, as far as gump would say. There were going to be one book and we decided to split them into two books, so I'm the field guide. They're like the meta. We found something called JD, called kind of systems theory, and we think that is a really good model for figuring out how ecosystems are and to give you the kind of the minute and a half version of systems theory.
Speaker 3:There's three or four different kinds of systems, but the ones that we all know about are and they're different, even though they're synonyms in the dictionary. It's a complicated system and a complex system and, though that may sound the same, they're very different in systems theory. And the problem is is that complicated systems you have to engineer and reverse engineer to a specific like everything Think about sending a rocket to the moon right, you go down to the O-ring cannot freeze past this temperature, right? Or a challenger blows up, and when that happens you've got to reverse engineer and make sure that doesn't happen. Think about a large, billion-dollar company rolling up all the finances across the entire company. Right, you have to have you're on a journey of finding the knowns right and making sure there's a system by bringing that up. And, in fact, most large companies government universities, large institutions are run in a complicated mindset and, in fact, the people that rise to power positions get to master those muscles and so they're very hierarchical and very structured organizations, right, and there's no way that startups can be viewed through a complicated lens. They're complex, there's more unknowns and knowns, and so the structures and the environment and your approach has to be more experimentation and iteration.
Speaker 3:The great example of a complex system is raising children and anybody who's been in a family with multiple children or have multiple children themselves same house, same car, same parents, same food, same church, schooling, whatever, and yet they end up being completely different beasts. Exactly Back to comparative comparing. Why don't you compare? You can't compare. I always say startup communities are like children. They should not be compared. However, what happens in many communities is that the power brokers that want to build entrepreneurship and approach it from an economic development point of view bring the complicated mindset, and I don't blame them. They've gotten to their power positions by mastering that, and so as part of my consulting is I have to create awareness and then try to break those muscles and help them build other muscles, and it's all the things you just mentioned. It's experimentation, lack of ego, throwing control out the door and building an environment where, hopefully, entrepreneurship can flourish. Because you and I, as old entrepreneurs, know, the first thing I want to do is I abhor structure. Yep, yep, I want to disrupt structure, not embrace structure.
Speaker 2:Not only do we have to think outside the box. There is no box, and if you put me in a box, I will smash it Every day. I take pride in the fact that I am virtually unemployable. But so we've talked about the ecosystem. We've talked about collaboration and launching ideas and so forth. Let's transition to the finance part of it. Not only do you have deep experience as an entrepreneur and an ecosystem builder, you have deep experience as an investor, as an angel investor, a corporate investor, a micro VC. I think one of the things that's most important is once you find your lightning in a bottle. Understanding how to build a great product that catches lightning in a bottle is one thing, but building a company, managing relationships with investors and a board of directors is a whole different science. So talk about the alignment necessary and how can first-time entrepreneurs understand the monopoly game of money and how to not step in some potholes along the way.
Speaker 3:Yeah, fantastic question, because new entrepreneurs make mistakes and this is one of the mistakes they make is their lack of knowledge around what capital means and how. The infusion of the capital, how it actually should change your brain, change your approach. How do you deal with your investors, your board of directors, how to use them as opposed to them using you? And, first of all, what I will share is that it's a learned set of behaviors, and so if you're an entrepreneur listening and you're just starting, or you're getting started early in the journey, and what I'm going to tell you probably don't know what you don't know yet. And so go find people like myself or JD or others who have been through the journey and ask them what it's like. Most times when we step in a hole did you say pothole? I don't remember. When you step in a pothole, it's because you didn't know the pothole was there. So the first thing is ask people where all the potholes are. Let's run this metaphor all the way into the ground, jd. But just ask, and the idea of figuring everything out of your own, that's going to slow you down and you're invariably going to step in more potholes and I want you to avoid those.
Speaker 3:And there's good books and there's podcasts. There's so much out there. So the issue is especially in places that you and I work in Ohio, north Carolina, that don't have the most they're not Silicon Valley's in terms of its maturity, and where the language and this awareness is just kind of permeates every coffee shop. It's incumbent upon you to get outside your town of Columbus or Cleveland or Sinssey If we're talking Midwest right, indianapolis and Knoxville and Nashville and Richmond, I'm just thinking about all the places that aren't called the valley and aren't coastal.
Speaker 3:It's your job to figure out and go learn from others that have gone one year, two years, five years before you and ask those questions. The knowledge is out there. I mean it's out there. Brad's written a great book called Startup Boards how to Work with your Board of Directors. I've given that book out more times than I can remember. So, however you like to consume information, it's out there. I guess our point of this is you better go out and look for it, because if not, you're going to step in potholes which will either derail you or make your feet really wet Right, exactly.
Speaker 2:Well, and what I often tell entrepreneurs because entrepreneurs are very, very intelligent people but if you have not played the monopoly game of venture capital and building what I like to call your capital stack, because you start with angels and then maybe you get somebody gets a grant or you get a little micro VC and you work your way up the ladder, but customizing that is very much a discipline in and of itself and so understanding the monopoly game and you don't need an MBA to do that I've done over a billion and a half dollars of deals and I don't have an MBA. The nice thing is I did have sort of an unfair advantage I started as a CPA at KPMG, so I got to do deals that way. But that's why what I primarily teach is the Dealmaker Academy, and it really is just monopoly of venture capital and how to build your capital stack in an efficient way. And they're really smart people. They learn very quickly.
Speaker 3:Yeah, it's not like super rocket science. It is a language. There's language, there's words, there's understandings, there's expectations, and I think the biggest problem that people found is that they don't realize that sometimes the decision to make today is going to impact them two deals from now or two rounds from now. You're like, oh, I didn't know, that's the way they're going to play that game, and so that's kind of the knowledge and awareness we're talking about.
Speaker 2:I think one of the most important things is to get alignment between the CEO, founders and investors. Talk a little bit about because you've sat on both sides of the table. Talk a little bit about examples where you've seen really good alignment on where we're going and what are the KPI measurements that we're going to use for the next round, how we're going to define success, and maybe an example, anonymously, where there was misalignment and what the outcome was.
Speaker 3:Yeah, I mean, I think it comes down to communication and how you kind of communicate.
Speaker 3:So here's the let me talk about the mistake I believe every new founder makes and what the good ones do and what the bad ones do. So you're raising maybe your first professional round, venture capital, and you've talked to 60 people and you've sold your heart and soul, right, and you are selling, selling, selling right. You're trying to find that balance between vision and actual traction. And so you get to this place and, let's say, you go and raise $2 million from four investors, three investors, whatever. At that point there's a little inflection point and this is what the bad founders do and what the good founders do. The bad founders, these people then invariably take a couple of board seats. You have a board meeting every month or every quarter, every couple months. They get updates and if you're new to it, what you still do is you're still thinking you're selling your investors. Now you're selling your board, and that's the wrong thing to do, because you are going to step in potholes. You are gonna do-do in the bed, right, and if that's gonna be a surprise to them, they're not gonna be happy, and that's when they realize that you don't know what you don't know and that you lack the right communication kind of vehicle.
Speaker 3:Let me go over to the more positive. I've counseled so many entrepreneurs and I learned this from Tom McMurray of Sequoia Capital, longtime friend. Investors only have one tool in their toolbox, that is, to replace you. They don't want to, but if you give them an excuse to, they're going to have to and they're waiting, looking to see whether you continue to grow. And one of those growth inflection points is when you raise money from them is moving from selling to them to literally peering and partnering with them, using them even in the darkest moments.
Speaker 3:I can't figure this out. I don't know why this isn't working. I'm having trouble with my co-founder or my CTO or whatever it is. These guys or women have seen it all. They're there to be a counselor to you, but if you're still in selling mode, you don't. You miss that whole piece of them. And so when the crap hits the fan, then that's when you're in trouble. And so I kind of caps that in a communication, in a broadly stated communication. Word like that's one thing you have to learn how to do, and so the good ones do it and I've seen the bad ones not do it and then all of a sudden be like they're firing me. I don't know what happened.
Speaker 2:Well, you know, it's interesting because I talk with entrepreneurs about this a lot and I've been at that table many, many times and one of the things that I encourage them to do is to get that alignment from the beginning. But when you close the round, you need to transition in your mind from we were sitting across the table from each other and now you have symbolically moved. Now we're on the same side of the table and now we're collaboratively solving problems instead of I'm no longer transacting with you, we just got married.
Speaker 3:Yeah, that's a great, great, great. I'm gonna steal that. That's a great kind of visual and metaphor in terms of marriage. Yeah, I mean, you really have to partner with them and, by the way, if you think about it in that right mindset, that's an advantage. You now get to leverage all of those experience. They've looked at thousands of companies, right. They have each of them have, specific skills in marketing or operations or finance. Here's like a free book for you to peruse and dive into at any moment's notice. So, gosh Darnit, go use that.
Speaker 2:Right. Well, not only that, and that's how smart money ventures came to be. The whole idea is that it matters who your investor is. Don't just get money, get smart money, people that bring relationships, experience, prior investments, prior exits. Because you can't buy that. I mean the first check. I mean go do the friends and family and take $5,000 from Uncle Bob and all that kind of stuff.
Speaker 2:But when you take your first $100,000 check, get a lead investor right who has subject matter expertise, previous investments, previous exits, because they're gonna bring experience to the table. That will, number one, catapult you into the next level, because if you select the right ones, they're gonna bring the next layer of investors and they have a network of people that you have no idea. I can't tell you how many times I've sat with board members and advisory board members and say, man, if we could just get an introduction to, for example, the CTO of Cisco, right, and I can't tell you how many times they'd be like, oh yeah, I just sat next to him at a panel at the Aspen Institute a couple of months ago and I'm like, wow, yes, that's why you need smart money investors, because the person who made all their money in real estate at the country club that gave you a $50,000 check should not be in charge of your strategic planning.
Speaker 3:Yeah, no, please, please don't. Yeah, I just saw that play out not too long ago and you know, or you know, you know, same thing. Like, the guy at the country club was an old, you know private equity guy. Sure, he's like, well, he was giving me good advice. I was like, well, no, he wasn't, because you're now, you're closed, you had to shut the thing down, so it wasn't good advice, right, you know?
Speaker 3:Maybe, if I can add this part about like mentorship and advice, not all mentorship and advice is created equal, right, yes, yes, just like there's good dollars and there's bad dollars, there's good advice and bad advice. So, as I counsel founders oh how do I know which one to look for? I said ask this question whenever you're seeking advice from someone. Right, ask. The question is have you ever lived through this challenge or issue Exactly? And not to say you're not going to listen to what they say, but just wait that answer less than someone who's been through it. And so it's a simple little question have you seen this? Have you had this play out for yourself in your career? And that's just way of kind of maybe, yeah, waiting the words that come back.
Speaker 2:Well, I completely agree, because I often say that if you want to go to the Super Bowl, the best thing you can do is surround yourself with people who have already been to the Super Bowl and you know no offense to people that are very well meaning and they want to give mentorship and advice, and they should, but please refrain from giving heart surgery advice if you're a dentist. Yeah, yeah.
Speaker 3:Yeah. Or, as I say, you know, if your arm hurts and you go to a surgeon, don't be surprised when they want to do surgery. Exactly, exactly.
Speaker 2:Right, that's exactly it. So what is? You know a lot of our audiences. You know early stage entrepreneurs. What is the one piece of advice that you give the most frequently that you believe early stage entrepreneurs need to understand as a foundational principle?
Speaker 3:Well, I'll couch this by saying I got to ask the question. You know all the business I've run. Do I have any regrets? Almost every business. When I look back on I say to myself I wish I would have spent more time in sales.
Speaker 3:At my heart, I'm a builder and I love the process of kind of crafting a service or a product. I obviously don't write code anymore and have them for years, but I can think about how to apply technology. That's in my heart. I'm a product guy, right, you know I'm a product manager. You know, posing as a CEO when I did it, and I wish I would have some more time out with customers, potential customers, out in the market to really understand what they're seeing, what they're using, what they're liking. So that's my advice I usually give is you know, don't overweight your time in terms of product development.
Speaker 3:Back to the Steve Blank, alexandra Wosterwalder, ash Mora. You know, spend as much time. And I usually say like, if you divide all your tasks into two buckets product development and customer development make that at least 50-50. And earlier I kind of want you more like 70 product or sorry, 70 customer, 30 product, and because if you understand your customer or your potential customers and your target. If you get that part right, I think we all have the brains to figure out the right product and service that fits that, but it's trying to jam our idea of a product service into a market that's not ready or doesn't understand. I think that's where most startups fail.
Speaker 2:I completely agree. Well, that's an excellent jumping off point, Chris. I sure have enjoyed our conversation, but before we go, I want to make sure that our listeners know how to find more information about your book.
Speaker 3:Sure, so it's available on Amazon. You can look under Chris Hively or Bill Defour. Both books are up there and there's also an audio version, which is me speaking, by the way, which is another fun challenge. That's great. It's in your own voice. Yeah, it's my own voice. When I wrote the first book, people said, god, it's like you're talking to me and, by the way I write like I talk. And so when I did the second one, I'm like I have to do the audio version, obviously a Kindle version. So those are available at all the different price points.
Speaker 3:I also have a website at Hivelycom. I probably have over 450 to 500 blog posts. They're short, pithy, one idea concepts. So use the search button to find anything from networking to capital to complex systems, and then I invite anybody to email me. So it's chris at builddefourcom. I typically answer everything within two to four days. I have open office hours. You can schedule them right on the website. They're 20 minutes via Zoom, typically booked a couple of weeks in advance, but I'll talk about whatever you want to talk about. That's how I stay current. By the way, jd, as her you talk to and they come from all over the world, so I get to hear different founders, different cultures. So lots of ways to engage, and I wouldn't have let all those out if I didn't actually use them. So don't be shy.
Speaker 2:Well, I love that spirit and thank you for being a resource and thank you for being an entrepreneur that continues to give back. We are definitely like-minded kindred souls in that spirit. I think, as we touched on earlier, when you get kicked in the teeth as a founder, you have a very soft place in our hearts for those founders that are probably about to get kicked in the teeth but at the same time, we understand how essential it is to create an environment where they can get back up. You bet we're here for you. Just ask Exactly Awesome. Well, that's great, chris.
Speaker 2:Thank you again for taking the time to join us today and my name is JD David. It's our host for the Smart Money Ventures podcast. Our guest today has been Chris Hively, co-founder of MapQuest and senior vice president of ecosystem development formally at Techstars, and founder and managing director of the startup factory in North Carolina and author of Build the Fort, and you can get that book on Amazon or on his website, buildthefortcom. Thank you for joining us and we look forward to seeing you on the next episode of the Smart Money Ventures podcast.