

Hacking AngelList (or "social proof") - wensing
http://wensing.tumblr.com/post/11062968069/hacking-angellist-or-social-proof

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jonmc12
Ugh. To put this advice in context, social capitalists raise money based on
reputation, hackers raise capital based on results of their startup / product.
Pragmatically, success needs to be a mix.

To me - this is very clear distinction in Bay Area. The guys I know that are
most impressive (and build the best startups) shut their doors, code like
crazy and don't waste time with what other people other than their customers
think of them. The product speaks for itself.

Then you have another set of entrepreneurs leveraging credentials, friendships
and their previous successes to 'hack' the fundraising process, it detracts
from delivering user experience.

Don't fall into this fundraising mindset - "if you want to raise money,
there’s no substitute for working hard on your reputation". There is a
substitute - its delivering measurable benefit to customers. Work hard on
delivering value to the rest of the world. Its an important distinction
because thinking about what investors think of you detracts from a maniacal
focus on product.

Its pre-mature reputation optimization. You want to build your rep after
you've proven delivering value to customers.. the product should speak for
itself.

I consider social capitalism an evil because it creates conflicts of interest,
and detracts from goal-oriented thinking. However, like politics and
bureaucracy - it is an evil that startups have to confront at some point, or
be confronted with. I balance this with a maniacal focus on delivering value
while staying at low profile - its tough to create a professional persona in
line with your startup before you have accomplished measurable customer value.
Without this kind of timing, its very easy to detract from your startup goals
because you personally have to conform to a misinformed notion of a
professional persona. I'd be curious if others have had challenges along this
line..

One last thought, social capitalism gets multiplied by orders of magnitude
when you leverage the hub. ie, relationships for finance, advertising are
going to be much more valuable in NYC. In optimizing reputation, spend cycles
where they have the highest return.

~~~
aresant
It sounds like you're disagreeing with the post and say "success needs to be a
mix" but that's the point of the article.

Don't miss that:

a) They've been working on the product since 2004 and it's best in class as a
result of an insane amount of product development.

b) Every single lead they've generated has come through their "freemium"
model, they've never spent a nickel on marketing.

c) Only recently have they learned that a best-in-class product isn't enough
to get investors excited without talking about the market.

Matt wrote an incredible post here about the blood, sweat, and tears that went
into building a market leading product:

[http://wensing.tumblr.com/post/1215873671/bootstrapping-
stor...](http://wensing.tumblr.com/post/1215873671/bootstrapping-stormpulse)

~~~
_delirium
This part is strange to me:

> c) Only recently have they learned that a best-in-class product isn't enough
> to get investors excited without talking about the market.

Isn't the whole _point_ of there existing a separate class of tech-oriented
investors and investment managers, who get paid pretty well for their work,
that they are knowledgeable and well-positioned to evaluate things like market
prospects? If who they fund depends so heavily on social proof and slickness
of the pitch to investors (as opposed to the actual product and market
potential), seems like capital is being allocated pretty inefficiently...

~~~
mcherm
Yes, that's it exactly!

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nivi
Hey, this is Nivi from AngelList. I am very happy for Stormpulse and I'm glad
to answer any of your questions here.

A couple things:

1\. We're getting out of the "gatekeeper" business as quickly as possible.
Over 70% of the intros on the site are now driven by code and community -- not
us. It took a lot longer than we thought it would. We're working on the
remaining 30%.

2\. We don't think of it as "applying" to AngelList any more. We think of it
as creating a startup profile. Applications made sense when we reviewed and
distributed every startup. Now startups create profiles and they live on
AngelList well before and after they raise money. For example:
<http://angel.co/42-floors>

~~~
wensing
Thanks Nivi. My post is meant less as a criticism and more as a fundraising
how-to for others like us. I think the changes you are making are good.

~~~
nivi
Totally agreed. And I didn't thank you for writing the post. So, thank you. =)

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lrm242
In other words, it pays to be the pretty girl in the room. The fact that the
underlying product, business, and people did not change highlights how most
venture deal flow is filtered by relying on relativistic gauges of peer
interest. It's pretty sad, honestly. Of course, not all are like this, for
example YC and other programs with formalized processes.

~~~
wensing
We did change by committing to B2B, but insofar as we didn't change the
foundational product, team, or market, you are correct. Which is why I call it
a hack -- doing what it takes rather than what you think is important.

~~~
jasonkolb
I wouldn't call it a hack so much as learning to sell to your market. Just
like showing you that Tide will take the stains out of your clothes better
than the next detergent, or that Bud beer will help you attract women,
whatever. In this case your market is VC's and your product is your company,
you finally started pushing their buttons.

Congrats!

~~~
wensing
Yes! Well said.

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auston
This post makes it seem easy, I've met Matt in person, here's what is not very
well pronounced in the article:

1\. Matt is an amazing speaker, in person he is captivating when he discusses
StormPulse.

2\. He has been iterating on the idea for 3-4 years now? He actually launched
it on HN IIRC.

3\. His customer development skills are NO f*%kin' JOKE - he has been becoming
intimate with his customers needs for a good while now.

4\. He is very approachable, there are many people that you get a weird vibe
from & may feel like you don't have their full attention - Matt is not one of
them.

So basically - this is less of a hack & more of a culmination of years of hard
work!

~~~
wensing
Thanks, auston! Speaking at RefreshMiami and the South Florida HackNTell were
big confidence boosters that also contributed to the good outcomes.

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tptacek
The IBM SmartCamp pitch is _extraordinarily compelling_ ; like a good resume,
it feels like you had to work hard to cut all the awesome things you had to
say into a small space. It's also really well paced; for instance, the logo
slide with the FedEx quote is set up to be a payoff moment for all the
previous slides, which build up from smaller customer testimonials.

So my question is: it obviously took you awhile to get to this point, but
don't you feel like, if you can put together a pitch like _this_ , there's not
a whole lot of additional "hacking" required?

~~~
wensing
Wow, thanks.

I'm definitely getting more comfortable with pitching, but don't consider
myself a master by any stretch. I think the next frontiers are frame control
and getting a better grasp on market sizing and pricing.

But yes, hopefully not much more hacking required to close this round of
funding. :)

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naval
So, our fault for not having caught it the first time. But the reason is more
innocuous than you might think. On a busy day, we can get 50-100 startups
showing up. That's a lot of applications to read - so we run an algorithmic
filter to decide what to even look at. My guess is that your initial pitch
didn't make it past the filter. The second time did, but not because you had a
ton of offline traction with press and investors, but because you had a
referrer who's known to the community - Joshua Baer. Yes, that's a bit of
social proof (knowing an entrepreneur who's respected in the community) but
not a particularly high bar. We'll try and do better in the future, and
meantime, congratulations!

~~~
wensing
For the record, I have looked at our first application again and I can see how
it left something to be desired. I do think AL is working great for us now and
I think hustle can create enough social proof to make things happen. The bar
isn't too high, even though it is a barrier. Geography is huge, probably too
much. But a few flights can overcome that sometimes.

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mikegreenberg
Regardless of your feelings on cashing in on your social capital, it's clear
that reputation goes a long way. Yes, it doesn't come cheap but the results
come from long-term, compound effort. I don't doubt the 25,000 hours Matt
quoted in that pitch. But the long-term, compound effort is an important
catalyst. (You guys might know it as 'hustle'.)

I can second what auston (and others) have echoed about Matt. I had the
pleasure of having Matt do a presentation on Price Hacking for Hack and Tell
in South Florida (where he's very active in the community) and it was easily
one of the best presentations we've hosted.

~~~
wensing
Thanks Mike ... really liked doing that HnT and was glad we could veer away
from tech topics and talk about the biz. Hope we can cross paths again soon.

~~~
mikegreenberg
I'm sure we will, my man! ;)

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callmeed
I've pretty much given up on AngelList for the time being. I'm not in in the
valley (although not too far) and not in a large metro. All of my past success
has been bootstrapped so I know no one in the VC community.

I did reach out to a few people I met at conferences but that got me nowhere.
I thought being a TechStars finalist might help too.

Meh. I decided it's really not worth the time/effort now. Maybe I'm doing
something wrong (yes, I've read all the relevant posts on "hacking angellist")
but for now, I'll focus on the product and growth. Perhaps I'll try again
later.

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alain94040
It pays to pitch in person and connect with people for real. That's what I got
from the article. And having traction helps win the in-person pitch.

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rayhano
That is incredibly good advice. Thanks!

Excite them about the Market so they are intrigued about the product.

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aresant
Don't miss one of the best "are you sure you've got what it takes to build a
start-up" posts chronicling Matthew's 7-odd year journey with SP to date:

[http://wensing.tumblr.com/post/1215873671/bootstrapping-
stor...](http://wensing.tumblr.com/post/1215873671/bootstrapping-stormpulse)

For a guy that's spent 7 YEARS building his product he does a remarkably good
job talking about the market, great write-up and post Matt!

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Hisoka
Did you guys get any writeups prior to Gigaom? Was is the case that you had
lots of customers but just not a lot of glamour?

~~~
wensing
We did appear in TC in Sept 08 but nothing on the order of the GigaOm writeup.

