Raising Money From Friends and Family

This post originally appeared on Forbes.com.

“I’m terrified. I have no clue what I’m doing.” When you’re trying to build an exciting business you would think the description would be a little different but my friend continued. “I have a great idea for a business and I know it will work. I just need $300,000 to make it happen. I want to ask my family and friends for money but I don’t know how. How does it work? Is it a good idea? What if I let them down?”

Starting a business is extremely difficult and like any business, it requires capital. We often read stories about people raising millions of dollars from venture capitalists but most people don’t have access or the means to raise money from a VC. For the vast majority of people, money is raised from banks, from personal savings, and from family and friends. So it’s no wonder my friend was terrified. There’s an emotional tax associated with a capital raise from close relatives. It’s the feeling of losing dollars and trust from your strongest supporters.

Nonetheless, the thought of losing family money shouldn’t prevent you from doing so. So what do you need to know if you want to raise money from family and friends? What are the important things to think about? Here are a few points to consider:

They know all about risk and reward, right? My friend heard about my new business and asked me if he could invest. I said no to him three different times and on three separate occasions. On the fourth time he said something that stuck with me and I ultimately changed my mind. He said, “I’ve invested before and I’m not afraid to lose this money.” Good point, friend. If you’re talking to friends and family that can afford to invest, it’s likely they understand the concept of risk and reward. After all, that’s probably why they can afford to invest some of their money in the first place.

Give fair and favorable terms. Taking money from close friends and family may typically happen in the very early stages of a company. The earlier a venture the riskier it is. If you have a friend or family member that wants to help you get off the ground you should consider giving them favorable terms on their investment. You can make them a larger equity holder. Or perhaps you give them favorable interest rates on a loan they give you. As long as you’re having an honest conversation with them, you can figure out a fair deal structure. Which brings me to my next point.

Be honest. If you’re involved in financial transactions with close friends, it’s extremely important that you are brutally honest and transparent. Sure, you’ll discuss things like terms of the investment and how the business will grow and make money. It’s also important however to talk about expectations. The last thing you want to do is build your business at the expense of a trusted relationship.

Diversify your investment base. When you’re making fundraising rounds with friends and family you may have the opportunity to take money from more then one person. If you do this, you’ll diversify your investment base. You’ll be able to provide some risk protection for your investors even though you’ll be limiting their upside potential. Less money in means less money out. On the other hand, having more investors means managing expectations and communications among more stakeholders. This can get very time-consuming especially when you are trying to run a business. But hey, there is a reason you often hear the word “diversification” when it comes to money management.

Social Proof. Would you invest in a company or entrepreneur that couldn’t raise a single dollar? Probably not. Raising money from your friends and family is a decent indicator that you can successfully convince someone to believe and invest in you. Even if it’s from your parents or your best friend. It sets a baseline precedent that you are capable and trustworthy of managing capital and this is very important for more meaningful capital raises and conversations later on.

Today, there are new technologies that make it easier than ever to raise money. These are crowd-funding platforms that facilitate investments among large networks of individuals. However, it’s often easiest and perhaps most problematic to mix funding with family. If you go down that path, make sure you are thinking about some of the implications. You might all become rich but you also might shake up a relationship or two and that might make for an awkward family dinner.

Have you ever taken an investment from a close friend or family member? Have you ever invested in one? What advice would you give?

Dan Reich is a tech entrepreneur and engineer. He has founded and sold multiple companies, the most recent of which was acquired by Buddy Media, which in turn was acquired by Salesforce. Follow him on Twitter at @DanReich.

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Startup CEO: Ian Monroe on Social Entrepreneurship, Startup Chile, and Building a Tech Team

This post originally appeared on Forbes.com.

Ian Monroe is a lecturer at Stanford University, as well as the founding CEO of Oroeco, a company that’s gamifying personal sustainability (and seeking to incentivize the global economy in the process). It’s a big mission and I was intrigued by what his company is working on so I caught up with Ian to hear more about Oroeco’s trials and tribulations, as well as his relocation to Santiago for Start-Up Chile.

Dan Reich: When and why did you decide to become a social entrepreneur?

Ian Monroe: Well, I suppose my path to social entrepreneurship was part inspiration, part imitation, and part process of elimination.

I’ve spent most of the last decade bouncing around the world while working on projects related to energy, sustainability, and international development. I enjoyed working with non-profits and corporate clients, but I didn’t see many lasting impacts come out of my field research and report writing. I also enjoyed collaborating with academics and government, but the lack of information transfer from research to policy-making and public awareness got similarly frustrating.

As these frustrations were building up, I saw many of my friends start companies I’m convinced are going to change the world, like Lukas Biewald (CrowdFlower), the late Corwin Hardham (Makani Power), and Brent Schulkin (Carrotmob). Being surrounded by entrepreneurship mentors – where I live in San Francisco’s Mission district there are literally dozens in every direction – made the process of founding a startup seem less daunting and more doable. All I needed at that point was an idea worth dedicating a substantial chunk of my life to build into a business.

DR: How did Oroeco become the idea you decided to build into a business?

IM: Oroeco was born out of seeing both need and opportunity. Fundamentally, Oroeco is something I’ve wanted for my own life for a long time. Despite being a supposed “expert” in sustainability – to the point that I’m invited to teach courses at Stanford on the topic, speak at conferences, and contribute to industry certification efforts – I still can’t walk into Walmart or a grocery store and easily quantify which options are best for other people and the planet. And the choices I know make a difference – like driving less and eating less red meat – are often offset by my international flights.

What I’ve been missing is a tool that easily tracks all my choices, shows me how they compare based on the metrics I care about, and suggests and encourages improvements. Ideally this tool would be fun and social too, since it’s easy to get overwhelmed by data, while comparisons to friends are a lot more engaging.

I also found myself increasingly thinking an Oroeco-like service was needed to realign our economy for sustainability. Most large-scale social and environmental issues – like climate change – trace back to companies producing goods and services that ultimately get paid for by consumers. So informed consumption can drive supply chains to become more sustainable, but first we all need the information and incentives to make better choices.

The idea for Oroeco didn’t refine into a social business concept until I saw that technologies already existed to make it happen. First my environmental life cycle assessment research with Stanford and NRDC exposed me to a bunch of great data sets, which quantify sustainability impacts for most products and services. Then I saw technologies like Mint.com make it easy to automatically track all my spending and investment in one place. And the last piece was seeing the opportunity to connect both of these data feeds to the growing ubiquity of Facebook and social gaming.

DR: What are the biggest challenges Oroeco has faced so far?

IM: The biggest initial challenge was building a great tech team. It’s funny, because I considered myself to be more of a “techie” than most with my science and engineering background, but unless you’ve got “computer” or “software” in front of your degree you don’t count as “technical” in the Silicon Valley.

Finding a team of solid technical co-founders took nearly a year. The process was made more difficult by the fact that Oroeco was entirely bootstrapping, so I was essentially only offering equity and enthusiasm for how Oroeco could change the world. On the positive side, we’ve now got a fantastic team that’s both highly qualified – most are startup vets from Stanford, MIT and UC Berkeley – and as passionate about personal sustainability and Oroeco as I am. I’m particularly excited that our primary engineering leads are two awesome women (Yang Ruan and Kirstin Cummings), which is a rarity in the startup world, and something that’s helping us incorporate gender-balanced perspective into design decisions.

DR: Chile is a long way to go for a startup accelerator, what convinced you to leave San Francisco for Santiago?

IM: We considered a few American startup accelerators, but by offering about $43,000 in equity-free investment, Start-Up Chile was by far the best deal we could find, as well as a great opportunity to connect with a network of international entrepreneurs who can eventually help Oroeco go global.

I’m the only Oroeco team member who’s spending a full six months in Santiago, while the rest of our team will keep circulating between the San Francisco area, Boston, and New York. While I’ve had the opportunity to work in much of the rest of Latin America on various sustainability projects, this is my first time in Chile.

On the more personal side, I’m fascinated by Start-Up Chile’s model, and getting a firsthand look at its successes and failures. The program is already being emulated by other countries, like Brazil. Start-Up Chile clones could catalyze entrepreneurship throughout the developing world, and the program is already sparking a tremendous amount of international networking and knowledge exchange.

DR: How has the Start-Up Chile experience compared to building a business in Silicon Valley? Has Chile succeeded in creating a startup-friendly environment?

IM: Overall, Start-Up Chile has been fantastic. The support staff and working environment are great. Santiago is an easy city to navigate, with public transportation on par with San Francisco and many European cities.

Navigating the Chilean bureaucracy has been a bit more challenging. Start-Up Chile has tried to streamline the process as much as possible, but there are still a lot of paperwork hoops to jump through. It took me nearly a month and more than a dozen signatures to open a bank account through a local Citi branch, then another half dozen documents to sign off on just to put cash into my account. In contrast, setting up a Citi account in San Francisco took about 15 minutes, and I’ve opened an account in Beijing in about as much time, despite my Mandarin being much worse than my Spanish!

DR: Oroeco’s mission is to fundamentally shift the global economy towards sustainability. But that task seems quite daunting, particularly for a little startup. What are your biggest challenges ahead?

IM: Our current challenge is to spread the word that we exist. Our big push now is to recruit our first beta users through our Indiegogo campaign – indiegogo.com/oroeco – which wraps up January 1st. So if people hear about us, like what we’re doing, and want to try us out, that’s the place to go. We’ve got a next to nil marketing budget, so we’re relying heavily on social marketing and word of mouth.

Over the longer term, the challenge is to simultaneously grow our user base while keeping our existing users engaged. There’s plenty of market research that shows most people want to live more sustainable lifestyles, and Oroeco can be a disruptive technology that changes how people and companies incorporate sustainability into decision-making. But for that to happen we need to scale to millions of users, ideally hundreds of millions, and these users need to be engaged enough by Oroeco’s user experience that our information and incentives factor into their everyday choices.

Our success will ultimately hinge on our user experience, since a compelling product will market itself. We think we’ll appeal to more users as we add societal, health and environmental impacts indicators beyond climate change, and we should appeal to even more users as we refine our social gaming and rewards. The challenge is to add functionality without compromising on design elegance, and to provide a flexible interface that can accommodate a wide range of user preferences.

A final challenge is protecting user privacy, particularly since we’re working with financial transaction data that can be sensitive. It’s important users trust us with their information, and have faith that we won’t create a great service that changes the rules of the privacy game once it hits critical mass. Users understandably get quite upset when this happens, which we’ve seen most recently with Instagram.

DR: Any parting advice for aspiring social entrepreneurs?

IM: It’s cliché to say, but the most important thing is to be thoroughly passionate about what you’re working on. And don’t be afraid to share that passion with everyone you know. Your honest enthusiasm is what will attract like-minded team members, as well as investors and users. It’s also ultimately what will make the bouncy startup journey fun and rewarding, even if you end up in a ditch.

I’m naturally a pretty laidback guy, with a tendency to engage in long-winded academic discourse, so infectiously exuding my excitement for Oroeco is a challenge. But I’m still happily working long nights and waking up excited, which is only the case because I still thoroughly believe we’re building something that will help craft a sustainable future. Sharing this passion with a great team and crew of awesome advisors has only magnified this feeling. Now we just need to demonstrate there are a lot of users out there who feel the same way.

Dan Reich is a tech entrepreneur and engineer. He has founded and sold multiple companies, the most recent of which was acquired by Buddy Media, which in turn was acquired by Salesforce. Follow him on Twitter at @DanReich.

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How To Prepare for Disasters. Emergency Healthcare and Rescue Tips.

I just finished up my National Ski Patrol refresher over the weekend. This is the 12th year I’ll be volunteering as a patroller at Mount Snow Vermont. For those of you that don’t know what ski patrol is or what we do, you can think of it as an EMT on skis or in my case a snowboard that is primarily responsible for the immediate response, rescue, stabilization, and transport of a patient off of the mountain and to a primary care resource such as a doctor or hospital.

Hurricane Sandy has made everyone aware of the importance of good preparedness and immediate rescue in emergency situations. With that in mind, I wanted to share a few tips that you could use in times of an emergency.

Hands-Only CPR. In times of an emergency or a disaster, it is likely that people around you may go into shock. This could happen for a number of reasons but the result is that a person may experience low blood pressure, a rapid heartbeat, or poor diffusion which means organ’s aren’t getting the appropriate blood and oxygen levels. These issues can lead to death. One serious cause of shock might be due to hypothermia. With many people still out of heat, coupled with another storm coming, it’s entirely possible that you come across someone in need of CPR.

We watched this video (below) at our refresher and it is a great lesson on hands-only CPR. You can do this without being certified in emergency healthcare and it could make all the difference in a life or death situation. As for the video itself, please disregard the emergency number in the video as this was created for the British Heart Association.

 

Have a Plan: In Ski Patrol, we train and plan for a variety of scenarios that are both likely and unlikely to occur. The likely scenarios are things like broken legs or head injuries. The unlikely scenarios are things like an entire chairlift collapsing. In either case, we have a plan and set of tools we can use to handle any situation.

In times of an emergency, it is important to stay organized and have a plan. Hurricane Sandy caught everyone off guard and many were ill-prepared. In 2001 my family was also caught off guard when an F2 tornado hit our house in New Jersey.

Just like the fire-escape route in your office building, your family should have a defined plan of action in the event of an emergency.

Have the Tools: I think we all now understand the importance of preparation so some things to consider include: food and water supplies, clothing for extreme weather conditions, medical supplies like bandages and medicine, tools like knives and shovels, and gas and fuel.

Below is an actual list of items that a Sandy victim is in need of. Might you need these things too in case of another emergency?

  • – work gloves to pick up your sewage soaked stuff
  • – black garbage bags to put them in….
  • – swiss army/leatherman type multi tools
  • – hand sanitizer
  • – plastic grocery bags for use over spackle bucket as toilet. baby wipes and diapers also
  • – paper towels / toilet paper/ zip lock bags all sizes
  • – plastic tarps to lay your good stuff on so it stays off of the wet porch and street while you pack it in your car…
  • – rope to tie down your roof and your hatch back so you can fit more stuff per trip.
  • – rubber boots for cleanup volunteers and the older people wandering the street in their slippers because they will not leave their homes….
  • – propane as people are using their gas grills to keep warm…
  • – flashlights/batteries/head lamps
  • – metal water/paint buckets to boil water on the grill to make cup of soup/canned ready to eat meals (think chef boyardee) especially with pull tops!/tea/hot cocoa/instant coffee also flip top canned fruit!
  • – certified red plastic gas cans… as people are bringing poland spring jugs to the gas station and being turned away .. 2- 1/2 gallon or smaller…. we would love 5 gallon ones too but they are very heavy to carry when full especially if you have to walk a great distance…….. trust me I know!
  • – our “pipe dreams” are for generators and hand trucks but we will work on the small stuff for now…
  • – I know there are more items but these are what WE needed when we were there… clothing and food being brought by local scout troops etc but the above things the stores down there are out of!

So there you have it. Having a basic understanding of life saving skills like CPR, having a plan, and having the right tools can make all the difference in another disastrous situation.

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The Pain In My Throat

There were at least 30 of them just standing there, listening to the tour guide talk about the room they were about to walk into.

Some of them looked between 60 and 70. Some of them looked much older. All of them however were speaking very heavy German. I’ve been to Germany before but this was a sort of different German. It was the type of old, rustic, 2 generations ago German that I’ve only heard a few times in my life. One time when my grandparents said a few words in the language and another time when I was visiting Frankfurt Germany for the 2006 world cup.

This group was about to walk into the room that I had just left. A room that left me with a sharp pain in my throat and no matter how many times I would go back into this room, I knew that sharp pain would always come back.

Auschwitz. Dachau. Treblinka. Birkenau. Bergen Belsen.

These were some of the names of the death camps that Nazi Germany built and used to kill over 6 million Jews, many of which were my relatives.

(I don’t know if the picture above are actual relatives of mine, but with the same last name they must have been related to me at some point in time, right?)

The names of these camps were also engraved on the floor of this remembrance hall. It was a special room of Yad Vashem, the Holocaust Museum in Jerusalem, Israel.

As I walk out of this remembrance hall, I can hear the elderly group very softly asking the tour guide questions in German. It was refreshing to see a group like this visiting the museum in hopes of learning more about those horrible years. Inquisitively asking questions. Looking upon their tour guide and consuming every word as if they wanted to imagine what it would be like to actually be there.

..actually be there..

They were probably about the same age as my grandparents both of which are holocaust survivors.

And that’s when I stopped to turn around.

Then my brain started to fire off questions..

Were they Nazi soldiers?
Did they help the Nazis?
Were they civilians?
What did the see?
What did they hear?
What did they do?
What didn’t they do?

These questions kept bouncing around in my mind. I walked away and concluded that they were probably just innocent bystanders of the war having little or no involvement.

And that is precisely the moment when I felt the worst.

How is anyone innocent when they silently stand by while pure evil or injustice is happening around them? How is anyone innocent when people are packed in to cattle cars only to be shipped off to death camps?

And that brings me to today.

Our world is fucked up. Although we think the world is a better place, which it is, there is still a lot of hate and injustice floating among us. Bullying, antisemitism, racial stereotyping. Even at a lesser degree we see injustice happening in places like work, school, and politics.

And yet many of us including myself sit by and do nothing.

Today we have Facebook, Twitter, blogs (like this one), and it is extremely easy, physically speaking, to take a position and speak out against something you disagree with even if it is only 140 characters long. This is happening all over the world today. It is the cause of new revolutions and uprisings from places like the middle east to places like China. This past week alone we saw a 14 year old girl stand up to Al Queda using her blog.

During the Holocaust there wasn’t an easy way to share information and stand up for something at a large scale. There were many German civilians, and even Jews, that stood by and did nothing.

Seventy years later there are German citizens who are donating their entire estates to Israel due to the guilt that went along with their actions or inactions. Seventy years later I witnessed firsthand the guilt that went along with those actions or inactions.

If we see injustice happening we should use the means around us to take a stand.

Standing up for something today is much better than standing over a memorial tomorrow.

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Five Questions to Ask Before Joining that Start-up

This post originally appeared on Harvard Business Review.

Mark Zuckerberg reinvigorated an entire generation when he added nine zeroes to the end of his bank account before he was 30 years old. He made start-ups great again. He showed the world that youth is not a preventative factor of success and that work can actually be fun. This theme of wealth creation while doing something you love is why an increasingly large percentage of graduates are turning to start-ups over more traditional jobs. It might also be why people are quitting their consulting gigs and investment banking positions to pursue a career in start-up land. Just yesterday I ran into a recent Harvard Business School graduate who quit her consulting gig in order to follow her dream at a new start-up.

Unlike big, established corporations or what we might classify as a “steady job,” start-ups present more inherent risk because there are more variables and questions for a prospect to consider. Things like: Does this start-up have the right team? Do they have money? What if I choose the wrong company? Nevertheless, this risk is often overlooked because start-up employee prospects realize that new ventures are more fun, are intellectually rewarding, and could have big paydays down the line.

But there are practical questions that all start-up prospects should consider when looking to join the next could-be big thing.

How many outstanding shares exist? Joining a start-up can have significant upside if you own equity in the business. That upside is determined by two things: the percentage of the company you own and the valuation or price of the company upon a liquidation event (e.g., the sale of the company). When you join a start-up you are often issued stock options. Maybe you are issued 1,000 options; maybe you are issued one million. This number is only as important as the number of outstanding shares in the company. If you are issued 1,000 options and there are 10,000 outstanding shares, then you may own 10% of the business. Make sure you ask your prospective start-up employer how many outstanding shares there are, so you can understand what part of the company you own. If they don’t want to tell you, then you may want to reconsider the job altogether. If they can’t tell you this, what else might they be hiding?

What is your stock option vesting schedule? Time flies in start-up land. When you get an offer from a start-up, make sure you understand how long it will take to actually receive the equity you are entitled to. A typical vesting schedule has a one-year cliff with a subsequent three-year earn out that vests each and every month. So if you think you might leave within four years, make sure you are comfortable with the vesting schedule. Four years is a long time in a start-up.

How restrictive is your noncompete or non-solicit agreement? I once read a noncompetition agreement that said anything I worked on — in- or outside of the office, during working hours and non working hours — was owned by the employer so long as I was employed there. This is a very restrictive agreement and in so many words says you are a slave to the company. Make sure you understand what this part of your contract says. Employees in the start-up world often bounce to and from various companies, so you want to make sure you’re not putting yourself in a compromising situation down the road.

Does the team have a track record? Winners know how to win. It’s why venture capitalists tend to favor entrepreneurs that have a proven track record (PDF). A VC once told me that he “looks to invest in people with an unfair advantage over their competitors.” These entrepreneurs are people who know the ins and outs of a successful path in a specific domain. Before joining a start-up company, make sure you have a very strong understanding of the team, their investors, and their advisers. This will give you a great indication as to whether or not the start-up has the right ingredients for success. If the team members don’t have a track record, that’s alright, but make sure you understand what it is that will put them on a winning path.

Why am I really doing this? The most important thing you need to ask yourself when joining a start-up is why. Some people do it because they hate their jobs. Some people do it because they want the credentials. Others join because they think they will get rich or it’s the cool thing to do. Ultimately, when you are looking to join a start-up you need to understand the real motivational factors behind your search, because if your reasons do not align with the opportunity, it is likely you will be neither happy nor successful.

With advancements like cloud-based hosting, labor marketplaces, online education, and video conferencing, it is now cheaper than ever to start a company. As a result, we will see continued growth from emerging start-ups and their respective employment opportunities. If you are debating whether or not to join an early-stage venture, make sure you are asking the right questions in order to mitigate your risk and maximize your chances of success.

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America’s Top Colleges List is Broken

This post originally appeared on Forbes.com.

Let me guess. You looked at the recent Top Colleges List published by Michael Noer and suspiciously thought, “this doesn’t seem right.” I know that’s what went through my mind when I first looked at the list and found that my school, the University of Wisconsin – Madison, was number 147 on the list.

Since the list was published, I’ve had over 50 different conversations with people to ask them what they thought about the rankings. Overwhelming, the response was something along the lines of “the list is broken.” That was my feeling too.

As someone with a background in math and engineering, I can say that building out a model like this is not an easy task and I applaud Michael and his team for procuring such a comprehensive and transparent list. However, after reviewing the methodology behind these rankings, it seems to me like we should be measuring the schools on different factors.

If we want to look at “things that matter the most to students,” here are some components we should consider in next year’s list:

College Brand Equity. If you had to do college over again, how many of you would apply to Penn State? Or what would you do if you could attend Harvard? Like everything in life, perception is reality. Associations, prestige, and brand names all matter. For better or worse, people are persuaded by these accolades and if they will help advance your career in the real world, then they should also help advance the rankings of a particular school in this list.

Strength of Alumni Network. I once had a 3 hour meeting where I was pitching a client for new business.  By the end of the meeting I was only 50% certain that I would win the business, until I said, “I’m going to Madison this weekend for a visit.” That one remark sparked another 30 minute conversation because the prospective client also went to Wisconsin for school. That week I won the business and the deal was closed. Connections matter in business and in life. They should also matter in this list.

Number of CEOs or Executives at Companies. How many of you have read the biography of Steve Jobs, Thomas Edison, Warren Buffet, Mark Cuban, Richard Branson or other great business leaders? You’ve probably done this because you want to know what it takes to be successful. There are other great business leaders and captains of industry that are lesser known. These are CEOs and Executives at Fortune 500 companies and promising start ups. If some colleges produce more leaders than others, it’s probably a good indication that other great leaders will emerge from those schools and therefore, this metric should be part of the ranking methodology.

Number of Students Participating in Entrepreneurship Centers. To succeed in today’s global economy you must be innovative, adaptive and independent. Entrepreneurs understand this better than anyone, but the schools that understand this are the ones encouraging and operating those entrepreneurship centers. These schools are the ones that accept and embrace change and they are also the ones that will most likely survive the looming academic bubble.

Student Load Default Rates. Although this is included in the methodology, this component should be weighted much higher than 5%. The concept of school is simple. You go to school to learn and then you use that education to get a job and earn a living. If your student loans exceed your earnings then by definition, your career is less valuable than what you paid for it. Easy math. Easy metric. It should be weighted higher.

What other metrics do you think are missing from the list?

Connect with Dan Reich on Twitter – @danreich.

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Making My Site Mobile Friendly and Responsive

Image representing iPad as depicted in CrunchBase
Image via CrunchBase

I’m in the process of redesigning this site so that it works more seamlessly with mobile devices. In a few short years, I think we’ll see that all web applications will be natively designed for a mobile experience. I think we’ll see that the way we interact with our phones and iPads will be the same way we interact with our desktop computers or laptops. The screens and inputs will be different but the experience will be the same.

Therefore, I needed to make my site mobile friendly and as always I figured I’d learn a thing or two along the way.

To do this, I downloaded a new responsive wordpress theme from themeforest.net called “Reaction WP: Responsive, Rugged, Bold.” You can get it here. I used the admin interface and firebug to make some styling adjustments and also had to make some hard code changes to the php files.

I’m not completely satisfied with the final product but that’s part of the learning process. It will get better as I figure out how to use some of the newer solutions out there. For now, at least the site can work a little better with my phone and with yours.

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Mobile Healthcare for the Consumer

The device includes a stethoscope cut in half and microphones. Researchers say it measures blood pressure with 95 to 98 percent accuracy.

I’ve been thinking a lot lately about the convergence of mobile devices and consumer healthcare. I believe there are three changes happening that are creating a perfect storm for a new wave of mobile medical devices.

1. Standardized Mobile Operating Systems (OS)
Before android or iOS came along, engineers that wanted to build a mobile medical device had to develop the software and the hardware. There were no standard, mobile operating systems in place that made software development scalable for medical devices. Sure there was MS Windows, Linux and other OS in existence, but none of these worked really well for small, mobile hardware. Engineers were required to use Programable Micro Controllers (PICs) and related devices. With the advent of android and iOS, it is now possible to write software without having to worry about the underlying supporting architecture and hardware.

2. Wireless Connectivity
The healthcare industry is inundated with expenses and impossible budgets. This is largely due to high volumes of patient visits and patient readmissions. Many of these visits are for simple physician checkups in order to conduct things like blood pressure measurement or EKG measurement. The information obtained from these frequent tasks are required to make the physician smarter about the patient so that they can implement the right treatment. The combinations of measurement devices and smartphones would allow these simple tasks to be done in the home and relayed back to the physician wirelessly.

3. Consumer Adoption
According to Gartner, total smart phone sales in 2011 reached 472 million units and accounted for 31 percent of all mobile devices sales, up 58 percent from 2010.” It’s no secret that people everywhere are using smart phone devices. If they aren’t, they will be very soon as it’s only a matter of time. Since consumers already have possession of these mobile devices, they are already in a position to buy a third-party accessory. Just like you might buy an iPhone case or a portable speaker, owners of smart phones could just as easily buy blood pressure measurement units or other medical plug-ins. Furthermore, the costs of a mobile medical device would be significantly lower because the consumer already effectively paid for half of the device – the phone.

So I think this market will emerge, but I’m not sure how long it will take. To understand that, there are two big question marks in my mind that need to addressed. The first is whether or not consumers care enough about their health in order to make them proactively engaged with one of these devices. I do think this could be overcome with things like game mechanics. The second is whether or not there will be a favorable environment with regards to governmental regulations, although I do think we are heading in the right direction. The HITECH Act, part of the 2009 stimulus bill, states that doctors are eligible for $44,000 in subsidies if they deploy “meaningful use” of electronic health records (EHRs) – keyword there being “electronic.” So it’s clear that we are moving in the right direction. It’s just a matter of how long it will take before we get there. I don’t know when our phones will be our personal doctors, but I do know it will happen.

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Surfing Big Waves and Big Markets

English: Mavericks Surf Contest 2010. Français...

This post originally appeared on Forbes.com.

“You don’t need to paddle as hard for the bigger waves”

That’s what Kaoki, my surfing instructor, told me during my first surf lesson on the shores of Maui two weeks ago. It was as if he was some executive coach because everything he said to me made complete sense from a business perspective. In the back of my mind I was still trying to digest the Facebook IPO and how a small company realized over $100B in value in just a few short years. So when he started talking about the “waves,” some things he said became immediately clear.

“You don’t need to paddle as hard for the bigger waves.” The pre start-up days of a start-up company are among the most exciting and also, the most terrifying. This is the moment when entrepreneurs decide what they are going to build and what market they are going to be in. Often times this can be very paralyzing to an entrepreneur because their choices are unlimited, so the fear sets in when they start asking, “but what if I choose the wrong idea?” So as an entrepreneur, the real question you should be asking is “what if I choose the wrong wave?” Start by looking at very large markets or quickly emerging markets. You will have more room for error while also having more upside potential. Another friend of mine said, “it takes the same amount of work to build a successful company in a big market as it does in a small market.” He’s spot on. Start with a bigger market. Start with a bigger wave.

“Surfing is 90% paddling and 10% surfing.” In order to actually stand up on a wave, you need to paddle and you need to do so in a way that gives you a chance to surf. In any startup, this is what matters most. Putting in the time, work, dedication and focus beforehand so you can enjoy that sweet fundraising event or successful exit later on. Without the right type of paddling and focus, you’ll never be able to enjoy a wave.

“Don’t just paddle, push the water.” Writing emails for the sake of writing emails is rather meaningless. This concept applies to just about everything you do at your job. When you are trying to get something done, do it with reason. If you don’t have one, ask yourself why you are doing it in the first place. If you aren’t “pushing water” you may never get up on a wave and you’ll just be some person sitting in the middle of the ocean, or industry, bobbing up and down on a fancy looking boogie board.

“Be patient. The good waves will come.” If you are patient, committed, and hardworking, you will eventually find yourself starring at a great opportunity. The question is, will you be prepared? Will you “push the water” and put in the work so that you can stand up on the board and ride it out?

I hope so.

Connect with Dan Reich on Twitter – @danreich.

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