This being my 4th startup, I have quickly learned that company culture is one of the most important ingredients for success.  I work hard on a daily basis to ensure that we adhere to our fun and energetic culture at Alice.

One example of driving this culture at the office is by assigning every employee an animal.  I have this strong belief that everyone’s behavior, temperament, personality and work habits match those of some animal in this world.  I feel this becomes very apparent  after working with someone for about a week.  Once I have had time to observe the employee in the work environment, I get together with the animal naming committee to finalize the choice and setup the unveiling ceremony.  In this graphic, you can see the entire Alice team by title and animal of who we have hired so far.

A few rules, you can’t create your own animal.  If we did that, I would choose a lion or some sort of majestic bald eagle but I have been given a toucan as my animal (not be be confused with the Fruit Loop cereal mascot)   Toucan’s are very unique and you know when one is in the room.  They have very loud vocalizations and can be heard at long distances.   They are also extremely feisty, smart, friendly and playful.  This describes me to a tee (not so sure about the “smart” quality)

Reading this you probably think that you wouldn’t want or care about your animal but I have had on many occasions new employees putting pressure on me after a week to reveal their animal.  They didn’t feel a complete part of our Animal kingdom (I mean team) until they knew what their animal is going to be

The staff then uses these animals on name tags, door signs, Yammer icons etc….In many cases the employee will decorate their work area with pictures of their animal.  We have a ton of fun with it.

I have worked with all kinds of animals over the past 3-4 years at Jellyfish and Alice.  We’ve had house cats, kangaroo’s, armadillos, gorillas, beavers….. and the list goes on and on.  If you have received an animal name from me in the past and are reading this post feel free to introduce yourself and your animal name in the comments

There is a ton written on company culture including the Zappos story and a VC’s perspective. This is just one small example of how much fun we have working at Alice which sets the tone for the overall company culture.  I feel that one of the CEO’s jobs is not only to take a lead in driving the vision but often over looked is to cultivate an overall culture that will ultimately lead to the company’s success.

Brian

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You’re in a start-up, and you’re about to start competing against some giant company. As an entrepreneur, you know the drill. It’s you against Bill Gates or Jeff Bezos or Michael Dell or Howard Schultz, or even a two-headed monster like Sergey & Larry.

Let’s face it–the cards are totally stacked against you. They have SO much in their favor. They have:

• More Brains
• Better Technology
• An Army of Employees
• Buckets of $
• Huge Credibility with the Press
• Lots of Customers

They can outprice you and outlast you in any market they choose.

As entrepreneurs, why do we choose to fight this kind of battle? I’m prepping for a presentation I’m giving tonight at the University of Wisconsin and I asked myself that question. How can a start-up ever carve out a space, let alone win the game? Brian and I have had a few successful start-up’s (Brian has 3 to his name, and I’m working on my 3rd with him right now). Thinking about our experiences, I was able to come up with the ONLY three things that you have going for you as a start-up.

They are:

(1) Speed & Agility. Big companies can’t move as fast as you can. This is by far the most important advantage for a start-up. You may have a great idea, but I’ll bet that the same idea is kicking around the big company competitor too. The issue for them is that they have a huge organization to drag behind them. They can’t turn on a dime. You can. You can get there first. And getting there first is huge. Jellyfish is a great example of this. We hit upon a new, disruptive search advertising model and got to market with it first. Microsoft saw our head-start and liked it. If we had waited, taken too much time, over analyzed, we would have lost. In a start-up, lack of speed kills.

(2) No History. What I mean by this is that in a start-up have no baggage, nothing to protect. In a start-up, you can dream up crazy ideas, without any regard to protecting the company’s revenues/ employees/customers, or upsetting the politics of the organization. You are free to think of the way things should be if you could design the perfect world. You have freedom to try to disrupt the status quo. Most big companies worry what will happen if the status quo changes. They worry about protecting next quarter’s number. They worry about getting stuff through legal. You are completely untethered from these kinds of restrictions.

(3) A Different Kind of Employee. There are lots of really, really smart people that work for big organizations. But there is something that brings the best out of people when they work in a start-up. The start-up environment is so empowering and invigorating when you realize that you have a HUGE impact on the success or failure of your company. It’s on you. You have the power to change a market, and you get caught up in the journey and the mission. I’ve seen the power of a small committed team of start-up employees, and I’ve been fortunate enough to have a business partner that does a tremendous job of cultivating and leading the charge. Small start-up teams can accomplish amazing things.

So there they are entrepreneuers. Your 3 advantages. Use them wisely.

And if you were planning on coming to my talk tonight, I just gave away my best stuff, so you can probably just stay home

We announced our first round of funding for Alice.com today (full release here).

A few takeaways from our fundraising efforts with Alice:

We Were Able to Raise a Large Round with Common Stock
Brian and I are really pleased to have raised over $4 million dollars in common stock financing. We were able to do this by utilizing a couple of great local angel funds and a number of individual angel investors, many of which also invested in us at Jellyfish.com back in 2006-07. I chalk up our success in raising large rounds of angel money (here and at Jellyfish) to the following three things, in order of importance: 1) a track record of success; 2) a disruptive model and clear path for executing on the opportunity; and, 3) a passionate team that effectively communicates the business. If you don’t have #1, the other two become even more important.

We Avoided Venture Capital, For Now
This was a big debate in the company, as we had several VC funds at the table. Alice.com is a big model, and we’ll be looking for subsequent investment to take advantage of our opportunity. So why not get hooked up with a solid VC fund from the outset? It really came down to weighing the negatives of granting VC preferred stock rights and other controls to the positives of getting a long term capital partner with lots of “dry power” to fund the future growth. We opted to stay with common stock, a diverse cap table, and maximum options to pick the right partner for our next round. As one Venture Capitalist put it to us, “if you can get the funding you need with a common round, why wouldn’t you?” I’d be very curious to have readers weigh in on this decision. I still think it was the correct one, but arguments can certainly be made against it.

The Sky Isn’t Falling, But It Is Tough Out There.
We started raising this round on August 28th, before the financial crisis and stock market meltdown hit full steam. I’m happy to report that although the round took longer to complete than we anticipated, we did hit our goal fundraising range. Our biggest issue was not getting turned down from people; it was investors cutting back on the amount they ultimately invested. Bottom line is that the company was still able to get the funding needed, even in this tough environment. I hope others are finding the same thing!

I’m Curious to See Whether the Slow Economy Helps Our Coverage
I’ve heard several commentators mention that one benefit of starting a company in a recession is that there aren’t as many competitors, and there isn’t as much start-up noise to compete against. This will be a first test for Alice.com of that claim. We don’t have a PR firm (yet), so our outreach on this funding news was somewhat limited. I’m very interested to see whether the economic downturn and lack of activity in the start-up world is one element of our coverage. I’ll do a follow up post on what we did to promote the release and a summary of the coverage we get soon.

We Are Poised to Launch in March 2009.
It feels great to get the funding completed and turn full attention back to executing on the business. We’ll be doing a closed beta in January and are poised to launch the first Alice.com offering in March 2009. The pressure to have a successful launch is intense, especially when you have past successes, but that is part of the allure of a start-up.

The folks over at ReadWriteWeb have starting putting up video coverage of the web2.0 Summit (Thanks!).

I just watched a very interesting interview of VC superstar John Doerr of Kleiner Perkins fame, in which he gave start-ups his list of 12 tips to cope with our current economy. You can watch the full interview here, but his tips were as follows:

• Act Now, Act with Speed. If you are adjusting your biz to today’s environment, don’t wait.
• Protect Your Core. Cut fat, not meat.
• Maintain 18 Months of Cash. In addition, know where you stand with your investors. Are they going to continue supporting you?
• Defer Facilities Expansion. Be lean with your facilities, software, etc. In other words, run lean.
• Re-evaluate R&D Priorities.
• Re-negotiation all Contracts. Including real property leases.
• Get Everyone in Your Company Selling.
• Offer Equity Versus Cash.
• Secure Your Cash. Don’t park your cash in anything risky, including money market funds.
• Watch Your Leading Indicators. Figure out the metrics that show where your biz is going and watch them like a hawk.
• Over Communicate.
• Keep the Faith. We will emerge from this stronger.

Thanks for that last tip John; I was starting to get pretty depressed! I just wish he would have added one more to his list. Don’t go to conferences; save your money and watch the videos from the event online