Tips On How To Hit The Startup Powerball

SXSW Sunday

In the wake of the jaw-dropping 19 billion dollar Whatsapp deal, everyone either wants to work at a hot stealth startup -- or start one of their own.

This trend was already percolating back in 2011 when the Kauffman Foundation conducted a survey on entrepreneurship. More than half of Millennials -- 54 percent -- wanted in on The Bubble V.2. Given the growing list of baby billionaires, the lure of a startup is tantalizing. Even to me. As a serial entrepreneur and hardy veteran of the Dotcom Disaster, I should have learned my lesson by now, right?

Many of us, plus a new crop of hopefuls, keep coming back, keep generating what we pray is the next new thing because well, you never know. I've cavorted with enough winners since I've been in the game to know for sure that people like me can and do: buy a Pebble Beach dream house; sail the globe; collect vintage cars; retire to Sonoma to paint; buy a sports franchise, and mingle on the red carpet with celebs whose films they funded. Some of these pals are certifiable geniuses but many more were simply in the right place at the right time.

So how do you get to be Employee #4 of the next gazillion dollar acquisition?

You might guess there's a formula to this innovation madness, or at least there should be, but the truth is: the odds of hitting the Startup Powerball are pretty similar to those of the actual lottery. But with one encouraging difference. There's only one thing you can do to increase your odds of winning the lottery: buy more tickets. But in the Startup Powerball, there are plenty of tangible tips, tricks, and tools you can use to pump up your possibilities.

Location, Location, Location

While finding a hot startup is easier if you live near one of the many Startup Zones, especially San Francisco, Seattle, New York, Boston, Austin and DC, it doesn't mean gems aren't popping up all over the map. Apple's 2010 iPhone App of the Year, Hipstamatic, was born in snowy Wisconsin over a weekend of frenzied coding. Millions of $1.99 downloads later, the company has boomed into a creative powerhouse. The founders met at UW-Stevens Point. Not Harvard or Stanford or MIT.

My advice: Go where the nerds are. Get yourself to the closest university or college in your area. Nose around. Take a class. Go to a Meetup. Search CareerBuilder to see what jobs crop up. Take an online course on to up your skills. Find a coffee shop or co-working space and just listen. Where smart, curious, geeky folks commune, things happen. You want in on that.

Tech Buzz and Trends

Despite what legions of "insider" bloggers would tell you, the tech media is not infallible. There are countless bloopers, duds, and blush-worthy predictions about hot technologies (QR Code), social (MySpace) and "disruptors" (Ashton Kutcher). Buzz burbles up from the uber-sizzling incubators and accelerators, YCombinator, TechStars, 500Startups, ASTIA, and more. Still, a win at legendary "pitch" conferences like TechCrunch Disrupt or Demo does not guarantee much beyond exposure to funding -- and chatter.

My advice: Chatter is valuable when you're in the startup search mode. Invest 30 minutes per day to immerse yourself in what's trending on tech. Follow sites such as Mashable, industry pros like Mary Meeker, Jennifer Jones and healthcare visionary Lisa Waxman Suennen. Check out Crunchbase for background on founders and funding. Lurk on social, particularly Twitter during the infamous #SXSW. Don't forget global buzz. The BBC and Guardian are favorites and so is Alibaba, the giant Chinese e-commerce site. If you're really up for an eye-opener, visit the Japanese Trend Shop.

The Company Culture

A friend of a friend of your second cousin told you about a hot startup. How do you evaluate the company's potential to determine whether it's the one for you? You might start with getting answers to these simple questions:

  • Who are the founders and their backgrounds?

  • Who else is on the team?

  • Company mission and business model (revenue-generating is nice)

  • Competitive landscape (who out there can crush you)

  • Is the startup bootstrapping?

  • Does the startup have funding? The source of funding?

The answers to these questions are pivotal to your decision. But there's a grey area that's harder to evaluate and yet is crucial to both success and your well-being as an employee: Company Culture. In my years as an Advisor to startups, I've seen well-funded companies with smart teams flounder, flail and gasp because they've ignored this aspect. Many figured the culture would grow organically. Many didn't take the time to even think about it.

Then there's Pulse. When I first learned of this company, the popular newsreader app was the proverbial hot startup in a cool Refinery 29 style San Francisco office. The founders, Akshay Kothari and Ankit Gupta, met at Stanford and created Pulse as a side project. Both had solid geeky backgrounds plus an impressive stable of investors. I've seen this before. As always, I was skeptical. Then I heard about the weekly Friday afternoon debrief. Akshay explains one of the ways they evolved their team culture:

"Early on, when we were only a few people, it was easy to debrief over a drink or ramen. As the team grew, it was necessary to put more structure to this weekly debrief, so that all team members (especially the quieter employees) get an opportunity to speak up. The team stands in a circle and discusses the past week, the only restriction being that each person must start his or her statement with "I like...", "I wish..." or "I wonder...". Here's an example of a hypothetical Friday debrief:

"I like that we had sushi for lunch yesterday."

"I wish that we all looked at metrics daily."

"I wonder if the sun's going to come out today."

"I wonder if Apple is going to approve our iOS app anytime soon."

I should mention that Linkedin acquired Pulse last year for $90 million.

What are you doing to hit the Startup Powerball?