Ship Your First Version (Fail Money)

I think more fail money should be flowing through Canada

If you’re not embarrassed when you ship your first version you waited too long. Matt Mullenweg

I had a great off-the-mic talk with Eric Woodward. We’re really aimed at the same thing, just that I try and encourage people in public and crush their dreams in private.

Eric is right about fast follow / barrier to entry, but I think this tension of shipping quickly and iterating is still important.

I remember a time when Leonard Brody suggested getting a bunch of engineers together in a room and coming out 18 months later. This was, of course, something like 5 years ago. My gut said it was wrong then, and I think it’s still the wrong thing today.

I hate that a lot of great entrepreneurs in Canada aren’t getting a chance to fail quickly because money is so tight. For many, it puts them on the downward spiral that leads to consulting revenue and minuscule incremental growth and most definitely no investment. For some, like Freshbooks, it turns them into an overnight 6 year success.

Yes, I think more “fail money” should be flowing through Canada, because ultimately I think this will make for more experienced entrepreneurs and richer investors, which ideally makes the whole thing go round.

I asked Eric what we should tell startups / startup hopefuls in Canada. He’s not a fan of going crawling down to the Valley. Ultimately, neither am I. We have to get the crank turning up here, and figure out what we’re going to be when we grow up. As Brad Feld says, it takes time to build these ecosystems. My gut says we are 10 years out from having our own cranking ecosystem.

Eric says “pay your dues at a startup”. Except, of course, there are very few startups in Canada with money to pay people, and so we are stuck back at the Catch 22. I see some signs that people truly do want to come back to live in Canada and build things here, but there is usually a Valley umbilical cord involved.

There is a lot of suck out there, but I don’t feel for angels / VCs / whatever. THAT’S YOUR JOB sifting through a lot of crap ideas. Also: being an investor means INVESTING. I see very little of that in Canada.

I am (still) excited about the startup ecosystem in Vancouver.

Mack Flavelle says he’s going to start doing Vancouver startup tours - from HootSuite, Bootup, W Media Ventures to the Raven and all stops in between (ref).

Oh, and there are immigrants! Go go Alex and please bring the rest of France with you! Go go Summify and let’s have some more Romanian colleagues! Even ol’ Derek picked up and moved from Chicago.

There are some new faces in town that look like they are going to put money into a few startups. The angel piece of the ecosystem has been a gaping hole for some time, so that’s likely something we’re going to have to build from scratch - import them, grow our own, or just wait for some of the successes to come back and become investors themselves.

Thanks for having me at Facebook Developer Garage. I don’t think I did lean startup and/or Eric Ries justice. I think Mischa probably helped to sell some of Steve Blank’s book at least!

Pro Tip: If any of the above doesn’t make sense, try adding the modifier “for web startups” to some of the sentences. I still think hardware / biotech / cleantech should/could be moving faster than they are, and I would look for signs of that in any investments in those spaces.

Oh, and Matt Mullenweg – great post.

Republished June 14, 2012

This post came up in conversation at lunch today, so I decided to publish it on the new blog. I had a hard time finding it, because while I coined the term “fail money” in the body, it wasn’t in the original title. And really, it had only a tenuous connection to Matt’s post about shipping your first version.

In 2012, my opinions haven’t really changed: we need more people to be writing $50K checks in Vancouver, so that in year 2, we can write some $500K checks.

This fail money pays for itself in the incredible amount of education that comes with it*. This levels up our entire ecosystem: from founders, to early employees, and most especially investors. If you’re waiting around on the sidelines with $500K checks, where do you think those companies are going to come from?

*So maybe I’ll try calling it education money instead.