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Growing up in Tallahassee, FL there wasn’t much industry in town. It’s a great city to raise a family and always has the lowest unemployment in the state since life revolves around the state government and Florida State University. At my high school, Lincoln, there was a program for seniors called a gifted externship. People in the gifted program could take the last two periods of the day to participate in an off-site, un-paid internship and get honors credit. It was a pretty sweet deal.

Through a connection I had the opportunity to intern at the oil change franchisor Super Lube where I spent time partly with the COO and partly with the VP of Marketing. The COO was skeptical of having a high school senior around and didn’t give me much attention. Looking back, my biggest takeaway was that technology, and simple business intelligence software, would have automated a good chunk what he did. He would literally spend hours pouring over printed spreadsheets of KPIs from each store location manually looking for unusual deviations and trends. The most common thing he looked for was signs of theft based on different numbers not making sense (e.g. oil expense vs revenue).

The VP of Marketing enjoyed having me around as I would help her with computer issues and desktop publishing projects. Learning about marketing and advertising options, like a certain high-profile billboard in town costing $500/month at the time, was fascinating for me. As expected, there was no focus on return on investment or ability to measure the effectiveness of different campaigns. A certain budget was dreamed up for marketing and the money was spent based on what seemed the most appropriate. Unfortunately, it still works that way for many companies.

My first internship, in retrospect, drove home the importance of software. Here were these smart executives at one of the top companies in town, and so many aspects of their job were manual, but had the ability to be significantly enhanced by software. Software is truly eating the world.

What else? What was your first internship like?

This weekend I was talking to an entrepreneur about his startup and sharing war stories. Towards the end of the conversation I asked him if he’d thought of joining an organization like Entrepreneurs’ Organization (EO) or Young Presidents’ Organization (YPO). He said he knew of both but didn’t know many details or requirements.

Here’s how I described each organization:

Entrepreneurs’ Organization

• For co-founder and owners that are actively managing the company and own at least 20% of the equity
• All entrepreneurs and business owners
• Multiple people from the same company are allowed in
• At least $1 million in revenue
• No employee minimum
• Frequent monthly events, workshops, and socials
• ~8,000 members worldwide

Young Presidents’ Organization

• For presidents, CEO, managing directors, etc that’s actively running the company but doesn’t need to own any equity
• 1/3 later generation family business, 1/3 hired president, 1/3 entrepreneur
• No more than one person from the same company allowed in YPO
• At least $11.5 million in revenue
• At least 50 full-time employees
• Three large events per year
• ~17,000 members worldwide

Previously I mentioned the power of peer groups in startups and can’t recommend joining one enough. These organizations are truly life changing.

What else? What’s your experience with EO or YPO?

Recently I was talking with a friend of mine who was thinking about raising money for his startup. He’s self-funded the business to date but is finding out that it’s going to take twice as long and cost twice as much to reach break-even. The topic of dilution and how much to sell came up, prompting me to introduce the concept of return on founder equity that I learned from a different friend.

Return on equity, as defined by Investopedia:

Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.

So, the return on founder equity can be thought of as the amount of money the founder made relative to the amount of money the founder invested in the business. As an example, say you invest $5,000 and turn it into $1,000,000,000 like the Spanx founder did, you’d have a return on founder equity of $1b/$5k = 200,000. A more modest, but still very successful example would be investing $50,000 and turning it into $5,000,000 for a RoFE of 100.

The next time an entrepreneur mentions raising money, ask about their expected return on founder equity.

What else? What are your thoughts on the concept of return on founder equity in startups?

Recently I was talking to a technology entrepreneur and we got to talking about why we do the things we do and what drives us. He offered up an approach that really resonated with me by dividing things into goals based on four chapters of what he wanted to do with his life.

Here are example goals representing four chapters of life from a tech entrepreneur whereby each chapter is approximately a decade long:

• Chapter 1 – Learn the Startup World
  The goal is to join a startup that becomes very successful and run a team or department in it.
• Chapter 2 – Start a Startup
  The goal is to start and run a successful technology company that goes public or has a big exit.
• Chapter 3 – Help Entrepreneurs
  The goal is to be a super angel investor and help in multiple successful businesses as an investor.
• Chapter 4 – Philanthropy
  The goal is to use the wealth generated in the previous chapters to give back to the local community and region.

Creating value and giving back makes sense — I hope he’s wildly successful.

What else? What do you think about these four chapters of life from a tech entrepreneur?

Angel investors are a unique type of person in that they’ve been successful financially (or won the gene pool lottery) and enjoy taking more substantial risks by investing in startups as opposed to standard investment options. As angel investing is more art than science there are a number of quirks or interesting rules that angels come up with based on experience or intuition.

Recently I heard a new angel investor rule that I hadn’t come across before: the angel must have known the entrepreneur at least one year before investing. The best time to raise money is when you don’t need it, and needing it in less than one year is the case for most entrepreneurs raising money. For this angel investor, requiring the one year minimum works well in that there’s a fair amount of time to see progress with the business, build rapport, and show value to the entrepreneur. On the other side, the opportunity to invest might not present itself again, the valuation could go up substantially, or something else might happen. There are always pros and cons.

What else? What are your thoughts on the angel investor’s rule to have to have known the entrepreneur for at least one year before investing?

A few weeks ago I was talking to an entrepreneur about personal goals and he said he swims his age in laps in the pool three times per week. The idea is that as he continues to age he’ll push himself further and add another lap each year. After the conversation it got me thinking that incorporating personal age makes sense for goals so that each year you stretch yourself a bit further.

Here are some example goals that incorporate personal age:

• Ride age number of miles per week on a bike
• Donate age times 50 in dollars to alma mater each year
• Spend age times 100 in dollars on vacations each year

Age, as a changing variable, works great in personal goals.

What else? What are your thoughts on incorporating personal age in goals?