All Good Things: SXSW Will Die Someday and So Will You

iris plans home page

Let’s talk about dying. Like being born, we all die.

I, for one, don’t expect this fact will change anytime soon, despite what Ray Kurzweil and others hope.

That’s why I’m eager to tell you about Iris Plans, a new startup that is officially launching at SXSW Interactive 2016, although it’s founding team have been working on the venture since late 2015. I’m an active advisor for the company.

The team has developed a way to combine a variety of technologies and services to make a highly tailored form of personalized medicine — known as Advance Care Planning (ACP) — to nearly everyone in the US who would want it, no matter where they are located or when they are available.

The best way to understand a real life situation for ACP may be to watch the video (produced and directed by my son, Andrew Guengerich).

 

A DIET for New Ventures

diet - hand holdingLast month, I had the pleasure of speaking on a SXSW panel about “Impact Investing.”

In preparation for that panel, I framed out some notes to use for my remarks. In advance, to help promote the panel, I also write a post entitled “DIET and Exercise” based on the notes.

However, I recently realized that I never elaborated on what my meaning was behind the words Demand, Idea, Excellence, and Team that make up the acronym DIET in the title. I discussed them during the Southby panel, but forgot to write it up for the blog.

So, here’s the meaning behind the words. Remember: the context is these words were meant to provide easy-to-remember guidance for social venture founders on the attributes that impact investors seek.

DEMAND

Working backwards – most known to least, you might say – the first question is understand if there is demand for the product or service? In lean startup methodology, this is “product/market fit” – have you built a product that anyone wants to use and/or will pay for?

My Austin colleague Josh Baer likes to say that proven “customer traction trumps all.” If you can show a meaningful number of customers using your product or service, then that makes a decision about investing in you the easiest of all.

IDEA

Continuing to work backwards, if the product or service is still in development, then the next best thing investors will want to know is details about the idea. In lean terms, this is “problem/solution fit” – do you have a problem worth solving and what can you can offer about your product or solution that makes it novel, compelling, and important?

Investors will want to understand your knowledge of the market, your competitors, why you think certain features of your solution produce valuable benefits. They will want to know how well you know your customers and any evidence you can provide that your idea has merit with them.

EXCELLENCE

Short of a minimally viable product or evidence that supports your idea, the next thing investors can look towards is excellence in what I call the small things: these are both tangible and intangible. On the tangible side, how much have you thought about the design values that matter to your idea? What should the experience be like for your users and why? Have you created rough sketches to show UIs, flows, ecosystem interactions, etc.?

On the intangible side, I find it instructive to observe how founding teams communicate, prepare, follow-up and other aspects of their personal style.

  • Do they arrive on-time or are they always late?
  • If late, do they let you know in advance?
  • Do they take notes in meetings?
  • How quickly do they follow-up with you on the notes?
  • What’s their eye contact and how do they show you that they are listening?
  • How do they interact with each other? etc., etc., etc.

Sports analyst and former Dallas Cowboys coach Jimmy Johnson used to get asked why he required his players to hold hands in the huddle. The reason, he said, was because he believed that the “little things” were good indications for how the “bigger things” would turn out.

In the case of his players’ huddles, having them hold hands – even if only each other’s pinky fingers – was a little way of reinforcing the big theme of “team over individuals” before each and every play. The same “little things” thinking goes for startup founders, in my book.

TEAM

Lastly, if the investor has nothing else to go on – no product, no research results, no track record of interaction with the founders – then they are left only with the team. Some would say (and I’m one of them) that, taking all other things into consideration, the most important element of a startup is the team.

There are two dimensions I’d offer for evaluating the team, especially the founders.

The first is a more experience-based evaluation that I’d call the “it” factor. As an investor, after you’ve met with hundreds of startup founders and prospective entrepreneurs, you begin to get a sense of what you’re looking for in the person across the table from you and if they have “it” – the “it” being the total sum of what it takes to go through the startup process and emerge with a product or service that has the potential to be truly meaningful (which usually means: profitable at scale).

diet - connerThe second dimension for evaluating team members comes from the work of a change expert named Daryl Conner and the research his firm ODR did a couple of decades ago. Conner and ODR observed hundreds of successful people and documented a set of attributes shared among them:

  • positive,
  • proactive,
  • focused,
  • flexible, and
  • organized

Taken together, Conner referred to the people who possessed these attributes as “resilient.” To the ODR list, I’ve personally added a sixth attribute of a moral code. Besides the main reason that working with people who have a moral code matters to me, it also helps me to remember the attributes together as a single exaggerated acronym: PPOOFF!

Which, in my mind, is mental noise that is made in your head if the team lacks the potential to stand up to these attributes. If they don’t, well then “ppooff” …there goes your chances of the venture being a success, as far as the investor is concerned.

So there you have it. That’s my meaning for the words composing the DIET acronym.

Good Impact Investing Requires DIET and Exercise

BSG logo - smallI moved to Austin in the mid-1990s as part of an expansion of BSG Corporation, a company for which I was a co-founder. In 1996, two things happened that shaped my engagement in community and social ventures for the next 20 years to present day.

First, BSG was acquired by another large services company for several hundred million dollars. Second, I was accepted into the 1996-97 class of Leadership Austin.

Up until then, my only community activity had been supporting my church and the schools my young children attended. Outside of those activities, all of my energy was poured into helping BSG grow and succeed. Consequently, while I traveled around the country to our offices in locations like New York, Atlanta, Chicago, and Seattle, I didn’t even know the names of the streets on the adjacent blocks around my new home in Austin.

So, when we sold BSG, I had a hunger to get to know my community better and was blessed with the means to take the time to do it. After some discernment, mightily enabled by my Leadership Austin experience, I thought that lending my services as a non-profit leader could be a worthwhile way to get engaged in a high impact way.

easter-seals - 75 yearsLong-story short, I interviewed for and won the CEO position (equivalent to Executive Director for many non-profits) at Easter Seals – Central Texas. This is the “Exercise” part of good impact investing, per this post’s title.

Being the CEO of a major regional non-profit (we had a $multi-million annual budget with a 22-county Hill Country territory) gave me the opportunity to see the social services sector from the inside, for which I’m grateful.

The experience was critical for learning the importance of exercising head and heart in different ways. It also enabled me to see how business practices I had learned and considered second nature were under-valued, under-represented, or completely absent in social services.

At the end of my one-year tenure as CEO, performing the real-life exercise as a hands-on social venture leader also helped shape the opinions that I carry today about the strengths and weaknesses of the sector.

Since so much of the non-profit sector competes for social venture dollars, I’ve learned to guide my criteria for judging an organization’s ability to succeed by criteria that are not unlike those of any other new venture I evaluate — non-profit or for-profit.

In fact, I don’t really think in terms of non-profit or for-profit. I think of high-margin, low-margin and no-margin ventures…to me, the financial side of evaluating a venture is all about growth and sustainability.

But, even before the financial sustainability question and its corresponding element, the business model, the four most important issues that I look for can be summed up with the acronym DIET, standing for : Demand, Idea, Excellence, and Team. (Yes, this is where the “DIET” part of the DIET and Exercise title comes from.)

Having been a both social venture leader and in the business of launching new ventures, as I have for years as a principal with Powershift Group, I’m looking forward to going deeper on the DIET and Exercise concepts, sharing my perspective as an impact investor, during our SXSW panel, Sunday, March 15. I hope you can join us and I look forward to your questions and comments!

wannabe_1024pxPS: If you have a moment, and are an educator, a student, or the parent of a high schooler, please take a look at one of Powershift Group’s most recent social venture projects: the Wannabe mobile app. You can download it (free) for all iOS devices, from the iTunes AppStore.

Austin Social Ventures Map

About 15 years ago, for the first time, I took time to get better acquainted with my community.

The catalyst for doing so was participation in the Leadership Austin program.

LABeing selected in the 1996-1997 class was transformative for me.  Previously, I had been 100% focused on my career and family.

Whatever community-oriented activities I’d joined were directly tied to those priorities, e.g., a professional association “volunteer day” as part of my work-related networking.  Or, a church youth activity, related to my kids’ participation in the youth group.

But, Leadership Austin led to a new chapter of my life, through deep introductions into multiple dimensions of the Austin community: healthcare, education, housing, transportation, faith communities, homeless services, and more.

Ever since that experience, I’ve maintained a nearly continuous parallel path of one foot each in corporate and community (or you might say for- and non-profit) ventures.

Since returning to Austin this summer, after a year and a half of living in and traveling to Shanghai China, I’ve had a greater appreciation than ever before of the broader responsibility and accountability to which our business ventures — our corporations — must be held.

austin svp mapSo, I’ve begun drafting the initial branches of a new Mindmap for social ventures in greater Austin.

It’s part of my personal journey to go even further than before bringing community and corporate interests together, manifested in social ventures or social enterprises.

If you see something that you think should be added to the Mindmap, let me know.

Or, if you would like, create a free Mindmeister account and make the change yourself!