Regardless of the title your company’s top technology executive uses — CTO, CIO, Chief Product Officer or VP of Engineering — your company will ultimately look to this person to produce the software and technical products upon which your business success depends. Through our earlier career experiences (at Quigo, eBay and PayPal), and now through our consulting practice (AKF Partners), we’ve noticed that there are five consistent reasons why a tech executive fails.

Perhaps the most commonly assumed “failure scenario” is that the CTO is simply not technical enough to inspire confidence in the engineering team. This is not the case. In fact, it is actually rare that a CTO is removed because he or she lacks technical acumen. The truth is that your senior technology officer does not need to be the brightest technical mind in the business, except, potentially, during the startup phase of your company. Over time, he or she need only be geeky enough to challenge the strongest technical minds in your company to add value to technical decision-making. Most often, we find that senior executives come to a bad end when they spend too much time relying on their technical brilliance and not enough time cultivating other important aspects of their job.

The Top 5 Tech Exec Failure Scenarios we list below are not mutually inclusive, but they all support one very important conclusion: when technology executives fail, it is not because they lack an individual skill. It is because they lack an an adequate balance of the many technical, operational and leadership skills necessary to make them a complete manager. Continue »

Ivan and Abby Kirigin founded their startup, Tipjoy, to give consumers of free content a new way to pay for the stuff they really like: by leaving a tip. While the idea sounds simple enough, what the Kirigins want to do is actually far more ambitious than their quaint company name suggests. With Tipjoy they aim to exploit the commercial power of micropayments, a hip, Long Tail business concept in which consumers pay for things in tiny increments.

Until now, micropayment systems have proven most useful for philanthropy. No more, say the Kirigins. The couple (they are married) believes Tipjoy’s version of micropayments, which involves consumers paying for products in increments as small as 10 cents, but paying — and here is their innovation — voluntarily, is powerful enough to help Tipjoy become the next PayPal.

The Kirigins developed Tipjoy’s model as participants in Y Combinator’s winter 2008 startup class. Below the couple shares some lessons learned through YC’s collective iteration process. Continue »

When I began my career in corporate law 10 years ago, I was floored by the amount of time, money and paper consumed during the closing process of a business transaction. Every deal produces multiple sets of original documents and signature pages, so each party (and sometimes their lawyers, too) can end up with a bound volume containing a full record of everything, just for safe-keeping.

I recently worked on a financing for a young tech company that involved parties in Washington, Paris, San Francisco and Santa Clara, Calif. When the terms were finalized, I assembled the relevant documents and signatures, fed them into a scanner and sent the parties a digital PDF of the deal record. But one party decided they wanted a complete set of originals for their records. So after waiting days for more signature pages to arrive from France, we reassembled everything and physically shipped out a much thicker version in hard copy.

A financing like this one typically costs about $15,000 in legal fees. I’d estimate that the extra documentation and billable attorneys’ hours added another $1,000 to my client’s tab, for zero legal benefit.

Startups, especially those that are bootstrapping, are heavily burdened by such legal costs. The good news is that it’s getting easier, and more acceptable, to use scanned signatures for your transaction documentation. Doing this can save your startup a lot of pain – and thousands of dollars. Continue »

My Chicago-based startup, The Point, helps people start campaigns for collective actions of all kinds, from organizing a poker game to boycotting a multinational corporation. We’ve been fortunate so far, enjoying steady growth, happy users, and money in the bank. (In February, we raised a $4.8 million round of venture funding from New Enterprise Associates). But hindsight is 20/20 and any entrepreneur, given the chance, would do some things differently.

In our case, we spent nine months developing extra features to accommodate our grand vision instead of focusing on what our users would really need. This cost us precious time, delaying our launch, originally planned for June 2007, to November of that year. Even after launch, the costs lingered — maintaining the extraneous features was a time-consuming distraction from improving the parts of The Point that people were actually using.

Thankfully, we caught on to what I call the curse of “vision overload” — when you put your vision ahead of your users — and quickly reversed course.

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Clever founders always eke the most out of every buck. But economic conditions being what they are, even the best bootstrappers could use a little extra help.

By now you’ve probably heard of web sites like GasPriceWatch.com, GasBuddy and MSNAutos, which help consumers find the cheapest fuel prices at gas pumps in their geographic area. Such “cost-optimization” sites are now proliferating across all sorts of verticals directly relevant to your most basic startup operating expenses. We’ve assembled a list of a few we like that can help you shop for everything from health insurance to web hosting to wireless service plans and more.

If you’ve discovered, or possibly even built, additional tools for cutting commodity costs, please add them to our list via the comments section.
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Many entrepreneurs fear being a flash-in-the-pan success — achieving an exit once, but never again. (Some might call this being lucky rather than good.) But while the allure of success inspires us to do great things, achieving it can have an ugly aftereffect: complacency. Vigilance, my friends, is the only path to serial-founder bliss. Here, in descending order, I offer nine leading indicators that you’re headed for one-hit wonderdom.

9. You went and got all tricked out.
I mean with your next business, not your fashion sense. But remember how you got your first hit — with a kindergarten-level UI that any neophyte could comprehend. Sure your friends called you Forrest Gump and sneered that you were lucky; that’s their problem. Trying to prove to your friends that you’re really, truly smart isn’t good business. Delivering a simple, usable concept that solves problems and makes money is. Continue »