Path 101, nextNY Charlie O'Donnell Path 101, nextNY Charlie O'Donnell

Lost your job? Laid off? Worried about the economy? Introducing the first Path 101 Career Event on Job Strategies for a Bad Economy

The e-mails are starting to trickle in...

"Help, I lost my job!"

"I've been laid off!"

"Please help my friend find a job!"

 

We're in difficult, uncertain times, no doubt...   and how many of you feel prepared?  Have you ever even been taught how to job search?

And no, uploading and e-mailing your resume everywhere and just waiting patiently for a resumes doesn't count.  Why?   Because very rarely does anyone get a job like that.

I think most people know that but they just don't know what else to do.  That's why we're running a live event about just that:  How to approach your career and job search in a bad economy.

EVENT: Keeping your career UP in a DOWNTURN: Strategies for a Bad Economy

On Saturday, December 13th, we're assembling some really fantastic sessions with top career experts to help you more effectively job search and shore up your career during a very uncertain time.  We've tried very hard to keep our costs low and so we're able to bring you the full day seminar for less than $100. 

Our event will take place at the New York Seminar and Conference Center at 71 West 23rd Street from 9-5PM and lunch will be provided.   Here's the topic overview:

  • Where's the damage and how bad?? Economic reality check and sector focus
  • Keeping a cool head...and mind and body: Recessionary Zen
  • Last employee standing: Making yourself indispensible to your employer
  • When your job is finding a job: A day to day gameplan
  • Going to the mattresses: Budgeting and personal finance tips
  • Old dogs, new tricks: Reinventing yourself and your career
  • Networking 2.0: Using blogs, LinkedIn and other social media to stand
    out and get found

 

Similar events are charging $75 for sessions on social media alone!  Sign up ASAP, because, given the timeliness of the topic, tickets are going pretty fast. 

Please pass this on to anyone you know that has been laid off or just worried about their career who you know isn't conducting a very efficient job search right now and needs help.

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Unpaid internships are a ripoff

There.  I said it.  More often than not, when you "employ" students as unpaid interns, you and the school facilitating this practice by offering credit are giving students the short end of the stick.

Companies say the students are picking up valuable experience, but how many unpaid internships are really worth a damn?  Maybe if they were learning transferable, in high demand/short supply skills, but filing, photocopying, cold calling, getting coffee, answering client gopher requests, and answering phones do not fit into that category.  Those are the things your well paid executive assistant would rather not do and so they get passed off to the free slave...er...student labor.

If you're going to help a student hone their PHP coding skills, then I'd have a different opinion--but funny enough, internships in computer science, where real skills are used and developed, are paid!  It often seems to be the least interesting, most commoditized work that is most often unpaid.

The "getting free experience" argument doesn't hold water. It isn't free for the student when they have to use college credits to justify the fact that they weren't being paid. They're paying thousands of dollars for those college credits. The system that demands that they receive credit if they're working for free, designed to prevent actual slave labor, actually hurts the student. If the experience itself was actually worth it for its own sake, a student would be better off just getting the job on their resume and not having to pay all that money for the credit. In fact, if I were the student, it would be a better economic deal for me to offer to write a check to the company for my own minimum wage salary, because it will probably be cheaper than paying the school for the credit.

The bottom line is that if someone is work of any value to you, you should compensate them for it, even if its just minimum wage. If your organization can't afford the hundred bucks or so a week for 15-20 hours of work because it isn't worth it, then how good is this experience that the student gets?  Plus, if your company can't afford $6 an hour labor, perhaps your business isn't economically viable--and that goes for startups, too.  If it isn't a no-brainer to get that work done for six bucks an hour, I find it hard to believe that work will impress anyone when it's on a resume. 

Companies make out like bandits with this practice. Not only do they get free labor, but they have no incentive to invest in the education of the student. If they don't stick around or don't like the work, who cares? Doesn't cost them anything! Give them an incentive to make sure the student is doing meaningful work.

You know who benefits pretty well from this practice, too? The school! Imagine if for every degree earned with 120 credits, 3 of those credits were earned by completing an internship. That represents a 2.5% reduction in the cost of faculty normally paid to teach them something useful in exchange for those 3 credits. Schools that allow 2 "for credit" internships are cutting their faculty overhead by 5%!

Two of the most common unpaid internships are in private client/high net worth asset management, and marketing/pr. Here are some alternatives for students to getting ripped off at unpaid internships in these fields:

Private client/high net worth asset management:

Lots of folks make a lot of money being entrusted to individuals' savings. Those people bring big trusted networks and financial expertice to the table--two things students completely lack and will lack for quite a while. A great marketing intern could have a big impact on a marketing campaign, but a private client intern isn't going anywhere near portfolios, so they basically get relegated to cold calling and "interacting with clients" (answering phones and being a gopher). Try getting a big investment banking internship with this on your resume.

Instead, open up a fake portfolio on Yahoo! Finance Or Google Finance, or a trading game site like UpDown. If you don't know what stocks to pick, just pick things you either know or that you might be interested in following (food companies, fashion, autos, Apple). Track the hell out of it. Download your daily gains and losses per stock to Excel. Enter the performance for the indexes--the S&P 500, the Dow, etc. Crunch the numbers. Open up a blog on blogspot or similar service with a fun domain name like TickerU or BullMarketMajor or something and write about your portfolio and the market EVERY DAY. Read and comment on the blogs of experienced investors like TraderMike, Howard Lindzon, and Information Arbitrage. Interview your favorite stock bloggers on your blog, even by email. If you do this a whole semester, you will not have wasted paying for the credits to be at a crappy internship. Instead, you could have taken another accounting, financial modeling, stats, or programming class and gained a lot better experience watching and interacting with the market everyday. Plus, you will have put your name out there as an innovative, ambitious self starter, making it much more likely you'll get hired for a better internship.

Marketing/PR:

If you're going to volunteer to market anything, market yourself. Actually you're already an expert on a certain kind of marketing and you may not realize it. Youth marketing, both offline and online (especially on social networks), is a huge lucrative business. Brands and agencies are always looking for people who are up on the latest trends and who have keen insight into what works and what doesn't.

Every single student who has an interest in marketing and public relations should be blogging about how they get approached by marketing campaigns, brands they love, and trends they see.  How about taking a poll at your school to find out what the top brands are and what people's associations with those brands are.  You should use Twitter, too...   You can use it to update your Facebook status messages, but moreover, you can use it to follow the updates of very high level marketing and PR folks

If I was hiring someone to help create a digital presence and brand for myself, I'd want to see them be able to do it for themselves first.  Learning how to do that by attending conferences (you can often go free as a student by volunteering), workshops, informational interviews could be a better learning experience than an unpaid internship.

 

If you're a college student (or anyone else) and you're worried about what you're going to do with your career, you should check out the site my company is working on, Path 101.  Sign up for our e-mail list and we'll keep you posted on what we're doing to help you figure all this career stuff out.

 

 

 
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Path 101, Venture Capital & Technology, nextNY Charlie O'Donnell Path 101, Venture Capital & Technology, nextNY Charlie O'Donnell

Interview and story in The Deal...and another defense of the New York tech community

I was recently interviewed by Mary Flynn of The Deal and profiled in the magazine as well.  It's going to be awesome press for us, so we're really excited, but I did want to add one thing to the article. 

Andrea Orr wrote:

"Path 101 doesn't operate in Silicon Valley, where even in today's tough funding climate, there's a strong fellowship in the startup community that provides at least some moral support when no financial backing is forthcoming."

Oh Andrea...Why the New York community knock?  Actually, we're glad we don't operate in Silicon Valley!  Instead, we're operating right where every startup should be in a difficult environment--right in the middle of where our existing network is, surrounded by supportive people who know us well.

Just the other day, we had an investor meeting with the New York based folks who have supported us from the beginning and I said to Alex, "Jeez, can you imagine if we didn't have the investors that we did.  How tough would that be to just have some random angels that don't know you very well?" 

If anything, there's a stronger fellowship in the New York community, because we constantly get dinged by mainstream media as a "sad assed backwater" of a tech community.  We feel like we're all in it together--NYC tech against the world!

Need more proof? 

nextNY is almost at 2,000 members!

A new co-working space, New Work City, just opened.

Our NY Tech Meetups are filled to the brim and sellout in minutes.

NY's own Fred Wilson won the Donor's Choose Blogger Challenge, beating out Valley competition from TechCrunch, AllThingsD

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It's My Life, Path 101, Venture Capital & Technology Charlie O'Donnell It's My Life, Path 101, Venture Capital & Technology Charlie O'Donnell

People Markets

Why are markets for people horrifically bad?

Finding the right hire? Extremely difficult.

Finding someone reasonable to date? Darn near impossible.

The market makers--job sites, dating sites, extract a lot of value in the middle and never really seem to come through.

I think part of the reason is the lack of data and how to understand it. I want to throw my blog at a dating site and have it understand the semantics: The food I eat, the sports teams I follow, the career I'm in, and the places I frequent. But why stop at my blog? Throw in Twitter, last.fm, del.icio.us, and Flickr, too.

Sites like Spoke, Naymz, and Rapleaf will just point to people and their digital footprints, but no one really takes the time to understand them across various services.

It's pretty obvious that I'm a Met fan, regardless of what I list in any prepopulated field on a social networking site. I've talked about the Mets on my blog and I have Flickr pics of Shea Stadium.

Careerwise, it's also pretty obvious that I know something about social media from my digital presence...but the search that people really want is who in NYC has 4-8 years experience and just talks about "users" the most.

Its not just more data, but also understanding the data in its context.

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Path 101, Venture Capital & Technology Charlie O'Donnell Path 101, Venture Capital & Technology Charlie O'Donnell

Are you anything like me? Where do people like you work?

We now have personality test widgets for the Path 101 Personality Test!   You can share and compare with your friends side by side!  Click here to see if we're anything alike.

 

My Path 101 Personality Quiz Traits

Highest Scoring Traits
Compartmentalization
Empathy
Love of Thinking
Lowest Scoring Traits
Emotion
Openness
Conscientiousness

Like-minded people work in:
Corporate Finance   Venture Capital and Private Equity   Commercial Banking   Aerospace Engineering  

See ceonyc's full assessment and get your own.

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Path 101, Venture Capital & Technology Charlie O'Donnell Path 101, Venture Capital & Technology Charlie O'Donnell

Key to Entrepreneurial Success #234: Find a Crazy Partner

Alex and I were talking about our recruiting strategy over the weekend, which obviously will only happen if we raise our next round of financing.  He sent me these two e-mails...

"I'm thinking longer term though, we're going to raise this money, it's not an option or a question, this company is too good to not continue, I will do whatever it fucking takes."

Then...

"heh, got a little worked up there. ahem. I am prepared to assist, sir, to ensure that this company remains viable, by whatever means necessary, as I believe in it strongly  ;) "

This is why I think it's a bit silly when people post on message boards looking for a partner without much information at all.  You gotta get someone totally psyched about what you're up to, and to me, that means a lot of transparency.  Without insight into why what you're doing is so special, how is anyone going to get this crazy psyched about the company?

In Alex's case, he's psyched because not only is the company just as much mine financially as it is his, but so's the product.  I didn't come to him after all the wireframes were done and say, "Here, build this."  He joined when all I knew I wanted to do was help people figure out what they wanted to do--to solve one of the biggest problems people have in life.  We whiteboarded and explored and built the feature set together, collaboratively. 

Don't expect someone else to get really psyched about building your product.

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Nobody here but us low horses

A friend of mine's dad runs a large landscaping business with over one hundred employees.  While the business has been in the family since 1939, when he took it over in the early 70's, he really took it to the next level.  That often happens when the reigns of a business finally pass on to the next generation.

Anyway, what we're doing at Path 101 doesn't even hold a tea candle (yet!) to what he's accomplished.  This is a real business that sells real stuff with revenues, EBITDA, 100+ employees, trucks, etc!  It would be easy for someone with so much success to dismiss a small angel funded web startup in Alpha, but instead, he took a lot of interest  in what we were up to.  He even brought me up to a neighbor as another guy running a business who knows what it's like to work hardest for yourself.  I really appreciated getting that kind of respect towards our humble beginnings--especially from a friend's parent who might naturally be prone to a more unbalanced power dynamic.  Instead, it felt like two entrepreneurs shooting the breeze and it was pretty cool.

And yesterday, I got a nice note from Marc Cenedella checking in to see how things were going with Path 101 and an invite to come chat about the recruiting market and startup stuff.  I'm sure I'll learn a lot more than I can contribute to the conversation, but similar to my friend's dad, he asked some questions in our exchange about what the sweet spot is for when in a person's life Path 101 is useful. 

I really appreciate when successful folks like this can take a second to think about somebody else's business--but more so than that to take it seriously despite the vast distance between our respective progress.  It's a stark contrast to a recent situation where someone told me how they'd do things completely differently and never really acknowledged the progress we had made or my vision for the company.

At the end of the day, I just don't sweat situations like that.  You can't impress everyone and not everyone is going to care what you're up to.  You've got limited time and resources in a startup, and you just need to work with the people who believe in you and not worry about everyone else.  I guess relationships are kind of like that, too.  Some people are going to accept you and be excited to be with you.  If you spend more time building strong relationships with these people, and less with those who aren't interested, your life will turn out just fine.

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Path 101, Venture Capital & Technology Charlie O'Donnell Path 101, Venture Capital & Technology Charlie O'Donnell

Are prospective investors killing your vision or fueling your fire?

Yesterday, I had an amazing call with a guy with thirty years experience in the recruiting market.  For years, he had a vision of a service doing exactly the kind of things we plan to do with Path 101--not necessarily on the helping people figure out what they want to do side, but on the data-centric, getting to know candidates better side.  We saw completely eye to eye on how badly this market needs to do more than figure out eighty different ways to smash a resume and a job post together, or mindlessly connect people without adding intelligence to the process.  What he also believed in, which we do strongly, was that it needed to be a service people opt-in to--something that provides value to the user every step of the way, encouraging them to participate more and submit more information about themselves. 

What was amazing was that this guy went the distance in terms of describing the power of the vision--referring to it as "one of those four or five big stories..."--while at the same time, he realized that we needed to take small steps to get there, but that directionally we were in the right place.  At one point, the grokking was so intense, we had to pull back and say, "Hey, we need to pull back and let this sink in... let's talk next week." 

While I absolutely believe Path 101 can be one of those companies, there's never been a purpose to describe it as such to anyone like that, particularly investors.  In fact, going through the fundraising process actually forces you into quite the opposite mode of thinking.  Your grand vision starts slowly dying a death by a thousand cuts.  They start nitpicking on features they dislike, or question how long it will take before you drive revenues, or they want to know how are you going to get people to come to the site.  (Which is the most ridiculous question of all time, because every single company has the same answer--SEO, social media tools, PR, or some kind of partnership...and maybe some traffic purchasing... what other traffic is there?  Doesn't everyone say the same thing?)   

Eventually, you find yourself thinking smaller--that if you can't find anyone to believe your big world-changing vision, you try to convince people of small things--how you just want to get to the next product step, how you can pull down some low hanging fruit revenue, etc.  God forbid you should look out further than your next financing in your plan--well don't bother because who's going to believe you, right?

Meanwhile, I was at a panel discussion with four VC's and some of them were talking about "Web 2.0" deals and how they need to do extra diligence on the mindset of the entrepreneur because they need to make sure they're in it to build a big company and don't want the quick flip.  Well, how many game changing companies out there had a clear path to the world changing vision at the point of their angel round? 

Perhaps the reason why so many Web 2.0 companies are small ideas and quick flips is because we've never had so much transparency into the VC mindset as we have now, and what entrepreneurs are hearing isn't "Think big", but "What can you show me now?"  Well, big takes time, and small can be built on Ruby-on-Rails this weekend... and don't expect small to resist a $30 million sale to a media company.   Thus far, no new potential investor has flat out asked me how Path 101 changes the world, and only one has even come close to turning the conversation into how big this gets. 

del.icio.us, for example, was a company where lots of people scratched their heads and said, "Bookmarking?  I don't get it," while at the same time, others, like those of us at Union Square Ventures, thought that people-powered search and discovery was a potential game changer and maybe even a Google-killer.

The key is finding that one person who believes in that vision like you do--even if you haven't previously been #2 at Paypal or built Skype or whatever.  It's hard to do that as part of this process.  I told this guy yesterday that while I totally believed in this vision, as CEO, I also had to deal with the harsh reality that the well runs dry in January, and so no one's changing any worlds without some more cash.  Walking in the door and saying, "I know we're in Alpha and rolling out our product at the moment, but here's how this changes the world", unfortunately, isn't usually the path to solving that immediate need.

I wonder if your expected value increases if you grab your pick ax and go find that one person who believes in the big vision, versus thinking small and incremental and showing what you can do tomorrow so someone will fund you today.  Companies would certainly behave very differently depending on what kind of feedback they get from their supporters, and so I wonder how much the early exit/flip Web 2.0 small idea mentality is a product not of entrepreneurs but of the investment community itself.

UPDATE:

Of course, I really don't want to just come off like I'm complaining.  If you know me, you know I always look for actionable next steps anytime I see an issue.  For me, what this whole experience has me doing is thinking about ways I can better convey the vision and end goal to the folks who need to see what that first step on the path looks like.   Sometimes, though, its just nice to get unbridled support on the vision rather than just spend 99% of your time defending the product plan.

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Path 101, Venture Capital & Technology Charlie O'Donnell Path 101, Venture Capital & Technology Charlie O'Donnell

Real apps for real people with real problems

"So we are thrilled to be an investor in a company that has been organized since its inception around the key insight that we believe will drive the next several years of innovation on the web – the need to solve real problems in the real world for real people."   - Brad Burnham on USV's Investment in Meetup

 

If only there were other companies solving real problems for real people.

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Path 101, Venture Capital & Technology Charlie O'Donnell Path 101, Venture Capital & Technology Charlie O'Donnell

The other side of Paul Graham's Coin: Ideas on the kind of VC we'd like to get funded by

Paul Graham just posted some ideas on what kind of startups he'd like to fund on the YCombinator blog.  I suppose if you're already working in these areas, that's great news for you, but to be honest, if you're not passionate about one of these things already, I never believed in the idea of just methodically picking picking a sector to start something in.  Fabrice seems to be doing a bangup job at it, though, so I could be totally wrong (although his passion seems to be the methodology and the process itself, though).

Anyway,this isn't the first time one of these lists has popped up before--and I'm sure it sends a lot of entrepreneurs scrambling.  In order to provide balance in The Force, I thought it might be better to tell all the VCs some ideas about what kind of partner I'd like to fund Path 101.  Let the VC's scramble around!

So here goes:

1) We're looking for a partner who is really passionate about helping people find their callings--someone who is looked at by others as a great mentor and actively contributes their career wisdom to others.  If we're talking about our career advice tool and you have to ask, "Why would anyone answer someone else's career questions?" that means you don't actually provide that advice yourself when you get random e-mails from your school's alumni or people from your blog, etc.  We want someone who knows what it was like to not know what you wanted to do and feels like we can really make a big impact by helping people with their career.

2) We want someone who really believes in backing people.  Our product will take many public iterations before it ever feels "complete" and there are still many unanswered questions left that we will only be able to address over time.  That means, at the end of the day, you've got a team and a market.  We're sure the market of "people who aren't sure what to do with their careers" is pretty huge, so that leaves you with team as the real bet--and so we need to feel like our team has the confidence and support of our investors.

3) Someone with access to domain knowledge in our market.  It will be some time before we build the recruiting inroads to our userbase, but it would be extraordinarily useful to be able to regularly pick the brain of someone who knows the space or can open up the right doors here.  That's true for any startup--having a resource to go to in order to help grease the biz dev or acquisition wheels is seriously value add.

4) We want a user--someone who participates in the social web to the point where we say, "and this is how it plugs into people's blogs" they'll get it because they blog or know how they work, not just because "blog" is a buzzword. 

5) Someone fun!  I need to be able to pick on you via Twitter.  If we can't laugh about something, hit up a ballgame, or just kick back and genuinely enjoy each other's company, it's going to make things a heck of a lot harder.  We have a fun team (in a geeky sort of way) and we get along with each other really well.  Our backers are going to be joining that team and need to be able to get along with us.

6) A partner who can get their whole firm on board.  Obviously some level of this has to be attained to get a deal done, but sometimes partners change and other times, different partners or junior folks have something to contribute.  I'd like to be able to walk into my VC's office and have just about anyone there be interested in talking to me--and not have to feel like I'm waiting for just one person.

7) Someone principled and ethical.  We're in this because we want to make an impact on people's lives--because the difference in your life between hating what you do and really finding where you fit is huge.  We also think it can be successful, but that's not going to be from taking advantage of others or squeezing every last dime.  I want to feel like we're in good hands with a trustworthy partner and that's what I think I can offer in return.

In return, a VC will get a team that is extremely dedicated and passionate about solving a big mainstream problem with creative, appropriate solutions, that works really hard, and that they can trust in return.

Anything else I should be looking for?

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Path 101, Venture Capital & Technology Charlie O'Donnell Path 101, Venture Capital & Technology Charlie O'Donnell

Sign us up, VC Mike: The Burn/Risk Ratio

Mike Hirshland nails how I feel about the timing of Path 101 (except for the market part--there are more people trying to figure out what to do with their careers than you can shake a stick at):

"For the immediate future, what makes sense is to iterate and experiment. During this phase, product, market and adoption risk remains high. The idea is to learn as much as possible about all three of these, and remove a big chunk of these risks, but to burn as little capital as possible during this phase. In the experimentation phase, we want to learn a ton but spend a little.

Once we think we have learned what product will get adoption in the market, and how we will make money from this product/market match (which nearly always takes a few more iteration cycles than originally thought), we then should kick into execution mode, in order to get real live proof points that the model actually works in practice. This is the time to staff up with the team necessary to go to market.

But until then, no need for the bus dev and sales guys that had been in the plan."

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Path 101, Venture Capital & Technology Charlie O'Donnell Path 101, Venture Capital & Technology Charlie O'Donnell

Fun with data: Personality Test Dropout Rate

One of my favorite things about actually having a live site up at Path 101 is having user data to play with.

Since we started broadcasting the availability of our personality test, we now have some neat data and feedback on it--like the fact that some people think it's too long.  That begs the question of wanting better data or more completed users... and whether or not there are some people who just won't do anything longer than a minute anyway.   I'm sure we could shave a few questions here and there, and provide some better motivation to strike a balance, but here's what we've got so far:

 

So basically, if we can get someone to the midpoint of the test, they're going to finish.  I don't now if that's normal for these kinds of tests, but that's about what I would expect.  At the end, about 52% percent of the people who started on Page 1 actually finish it.  That's pretty good for a 90 question, 25 minute test.

One thought might be to move some of the "filling buckets" to the front of the test.  People seem to really like those and mixing up the questions better might break up the monotony of the test.

Perhaps some teasers, too... like telling them we've found some industry matches for them, but they have to finish to see them or something. 

Any other ideas?

What about letting people save it midway?  Will you lose people who would have otherwise finished it?  Will people really come back?   Certainly that might drive registrations.  Time for testing!!

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My Path 101 Personality Test Results

There are certainly a lot of places out on the web where you can take a personality test, but for the more serious ones (not the Superhero test), comparing results to others isn't always easy.

That's going to be our next update to the test... the ability to compare your results with other people.

For now, though, people have been sending me screenshots of their Path 101 personality test results and asking me what I got on mine, so I figured I'd share:

Interesting that I'm empathetic, but kind of emotionless.  "I understand your problems, but I just don't care about them."  :)

What did you get on your test?

Haven't taken it yet?  What are you waiting for?  A Beta?  :)

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Don't call it a launch... It's an Alpha. WAY different. :)

A lot of people ask me about how Path 101 is doing.  Before today, I've basically said, "Yeah, we're building and making a lot of progress, but we have a ton of work left to do."

Today, I can proudly say, "Yeah, we're building and making a lot of progress, but we have a ton of work left to do, but if you really want to go break something, check out our siteYou can now take our personality test and explore a small subset of our public resume data."

I'm very excited that a part of what we're offering stands enough where it makes sense to send people to it.  We can also use your help with it, too!

The quiz works based off of other people's data.  When you take it, we'll match your personality to others in the system and tell you what kinds of careers they're in.  The more people we have, the better and more specific the recommendations.

So, if all 2600 of you could go over to Path 101 and take a quiz, and save it to an account, I'd really appreciate it.  Feel free to pass to a handful of people in a diverse set of careers.  Explain to them that they're part of a test group, and that the data will be much better with a critical mass of people.  We'll be pinging everyone who took the test when we've hit that mark and recommendations make more sense.

I want to give a HUGE shout out to our great team.  Alex, Jen, and Hilary have been pushing a ton of code--especially since it's really only been a couple of months since the whole team has been on board.  We'll continue to make more progress each day, releasing more features and making the ones we put out there better.  If you haven't already, you should subscribe to the Path 101 blog to track our progress.

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Path 101, Venture Capital & Technology Charlie O'Donnell Path 101, Venture Capital & Technology Charlie O'Donnell

Risk and the Raise

Back in October, Alex and I were two guys and a Powerpoint. 

We raised $350k partially based on that Powerpoint, but *I think* it was more based on the strength of our relationships and the fact that we were working in a big, lucrative space begging for disruption.  The investment was meant to recruit additional developers, carry us to a product, and give us some running room after to iterate.

We're on the verge of accomplishing the first half of that goal.  We hired two great developers and we're literally a couple of days from rolling out some of our product in an early Alpha version.  (No, no, it's not a "launch".  It will probably suck and break on day one, but you've got to start somewhere, right?)

Some entrepreneur friends were surprised and maybe even thought it was unfair that we were able to raise before having at least a demo or something up.  Certainly this is the kind of thing that VCs look for, but angels can be a different story. 

Thinking about risk and value creation in relation to fundraising is interesting to me, because its on the forefront of my mind right now. Since we're about to roll some product out, we have a very clear idea of what the product will look like and where it's going.  Of course, it needs to iterate based on user response/uptake, but that goes without saying.  What's very clear to me, though, is that the iteration and eventual inflection point for the service really depends on additional resources--a kick-ass user experience person and an operational/biz dev person.  These would clearly be our first hires after any kind of a financing, because the product not only depends on seamlessly integrating several complimentary career applications, but also on syndicating our services out to other communities and groups.

So the big question is, why wait?  (Especially if we've identified prospects for these roles, which we have.)

Right now, there's two scenarios:   

1) Launch, iterate with existing team, catch lots of falling knives and try and power our way forward to some arbitrary milestone that brings the term sheets pouring in, not that we or the VC's are even 100% sure what that is.  Then, spend time trying to fill out team.

2) Try and raise a couple million sooner rather than later, since we can very definitely say "This is the product and the near future of the product you are investing in."  We make our hires and hit the ground running, and make a much bigger impact in shorter order.

Option #1 plus a nice hockey stick might bring a higher valuation... but is that really what we should be optimizing for?  Outside of raising ridiculous amounts of money at ridiculous valuations, have you ever heard an entrepreneur attribute their ultimate success to a million or so here and there on interim valuations?  On the VC side, have you ever heard a VC say, "The success of our fund has really depended on waiting another month or so to see more traction on deals and teams we liked"? 

The worst thing that could happen is that we come out, inspire potential partners and employees, and we're unable to take advantage of them because we don't have the resources.  Raising money takes time, focus...   Raising at the moment your product gets really good and people finally get it is probably the worst thing you can do, because then you won't have your ducks in a row for when opportunities knock.  The trick is finding support from folks who see where you are going with something and believe that you have the passion and ability to get it there, even before its a sure thing. 

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Going to California: ERE Expo in San Diego until Wednesday, Bay Area Thursday to Monday

I'm headed out to the ERE Expo in San Diego--I got a very exciting invitation to be a part of their startup panel along with Benjamin Yoskovitz (Standout Jobs), Clint Heiden (VisualCV), and Dan Arkind (JobScore).  What's so cool about our panel is that we all represent different aspects of the job process...

You will be able to discover a career on Path 101, present yourself well with a Visual CV, engage with a company and apply through Standout Jobs and then hopefully make your way through the company's recruiting process, which might be managed by JobScore.  Nice!

Since I was out there anyway, it was startup cashflow-friendly to swing by the Bay Area and stay with friends.  Given the success of our first "Entrepreneurship Listening Tour" we decided to get in touch with a bunch of experienced people to get some feedback and to get on the Bay Area VC radar for later this year.

We're pretty booked during our days, but we'd love to catch up with and meet a lot of people.  On Thursday afternoon, we'll be co-working out of Citizen Space, and then heading out later to 21st Amendment.  Come work with us (or eat/drink with us)!   Tell us you're coming out that night here!

If there's anyone you really think we should meet--smart VC's, entrepreneurs, developers, please let us know.  E-mail us at us@path101.com or follow us on Twitter (@ceonyc and @alexlines). 


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