Found+READ: Stories by Ursula Schwuttke

Risk Everything

Ursula Schwuttke — Tue, 07 Aug 2007 16:45:11 GMT

My story evolved over the course of eight years, but can be summarized in very few words. I founded a software company with technology I developed at NASA. I licensed the software, raised two rounds of venture capital, and ran the company for seven years. Then, as a result of increasing differences with my investors, it became clear that I needed to leave. End of story.

That was two years ago. I am often teased by the prospect of returning to business. But since then I have been dedicating time to things I never made time for before. I have invested in my personal relationships. I learned Spanish. I bought a half interest in a 50’ sailboat, and I am learning to sail.

I have another story to tell, one that is chronologically short. It transpired in less than an hour but it requires more words. It isn’t a story about me, but it left a mark on me. We were sailing the boat to Belize from Fort Lauderdale, in my first blue water trip.

With a two person crew, we had to take two-hour night watches. That meant two hours of sleep in between. REM was out of the question. At night, alone on deck, I developed an urge to whirl around and see who was behind me. Of course there was never any one there, we were hundreds of miles out to sea. I had heard that people get weird after days spent out of sight of land, and I was getting paranoid as a result of sleep deprivation.

Two days from Key West, just after dawn, I saw a rock out in the distance off the starboard bow. Had I added hallucinations to paranoia? We were in deep water; no islands or rocks charted anywhere. I peered through the binoculars. The rock looked like small boat. I hurried below to wake up my sailing partner, Dave, who has crossed many oceans and would know what to do. By the time we made it back the cockpit, there was not doubt: This was a small boat, with people inside, waving a red flag.

The prevailing wisdom for this seafaring situation is “Don’t Stop.” The possibility of armed pirates makes it unsafe, particularly for a small crew. But Dave and I hardly ever follow conventional wisdom. So we changed course to allow them to approach us.

When we were within 10 or 15 yards of the little boat, we saw that there were actually 10 men on board, packed in like sardines. Some lay in the bottom of their craft, the rest were standing. They were disheveled, dirty, a wild-looking bunch, and appeared in age from 20 to 40. They screamed hoarsely above the noise of their engine, which seemed to have been converted from a piece of farming equipment and was missing any semblance of an exhaust system.

“Water! Agua! Water! Agua! Agua….” There was a hysteria in those shouts of mixed Spanish and English that made me strangely uncomfortable. Something didn’t feel right about it, we both noticed. We prepared the can of mace, just in case. Dave tossed them a line, and indicated that they were to take it but hold their distance without coming closer than ten feet.

The conversation was limited, but we learned that they were six days out of Havana. They’d had no water in 24 hours. Five other vessels had passed them without stopping since they drank their last drops. That inexplicable ‘something’ in their shouts that didn’t ‘feel right’ was the sound of terror – the terror of those who believe they might die. Dave filled their five-gallon water jugs, urging them to drink at least one jug on the spot. We needed my Spanish to convince them that this was ok, that we would refill it. They were in the mindset of conservation—or preservation. They believed our water supply was limited.

I asked if they needed food, they declined. But we didn’t see any food in their boat, so I rushed below for provisions that, orginially packed for two, might be suitable to share between ten. I sorted through packages of gourmet cheese, piles of fresh vegetables (what were they going to do with a bag of arugula, an artichoke, or asparagus), bags of chips and roasted tomatillo salsa, microwave popcorn… I settled on fruit – to feed ten, I needed all of it. I poured a dozen apples and some oranges into one of those plastic grocery store bags, and added a box of saltines, and some chocolate. When we handed it over, they took it gratefully, with looks of wonder. They declined fuel, pointing proudly at their reserves. One made a gesture of lighting a cigarette. He still had some smokes, but no lighter. We found him one.

The only other thing they needed was to confirm their course. They were headed for Cancun. “Why Cancun?”, I asked. The response was simply, “Los Estados Unidos no son buenos para nosotros…” The U.S. Congress was debating legislation to build a wall across the Mexican border at the time, so they weren’t going to American shores. The GPS told us we were 60 miles due east of Cancun. Our Cuban friends had no GPS. They had no nautical chart. They had only a simple hiking compass, but they were more or less on course.

With water in their bellies and food in their boat, the men were beginning to sound friendly rather than frantic. A few kept asking about direction. I began to discern that it was the youngest among them who was in charge. He had a quiet confidence: He only needed to confirm his course once. The rest were less certain, maybe less familiar with the sea and the currents. Maybe a little less confident in their captain than when they had first set out. But with 60 miles to go, at four knots they would arrive in Cancun a few hours after dark. The luminescence of the city lights over the water would guide them after sunset.

When they set off again, releasing our line with smiles, renewed hope in their eyes, and calls of “Vayan con Dios”, my eyes filled with tears. (They sometimes still do when I think about it.) I wonder what has happened to them. I hope they made it.

I think of myself as a risk-taker. An inventor. A dreamer even: I sail open water; I scuba dive with sharks; I founded a company; I am an entrepreneur. But I re-learned a few things about risk-taking and dream-seeking from those men, in that hour, on the open ocean. I think these are things valuable to all risk-takers or dreamers—to all founders.

Boldness is risking everything, meaning that which you cannot affford to lose, to pursue a dream.
Inventiveness is finding the will to be creative when necessity demands it—not when it comes to you.
Motivation is finding the spirit to hang together when resources are depleted and plans run awry.
Honor is maintaining a sense of fair play and not asking for more than you need—even when it would be excusable.
Leadership Real leadership is demonstrated when one at the ‘helm’ finds the confidence not to waver, even when the confidence of the team has wavered.
Luck On a day when it really counted, they had some of it. But it dawns on me that luck is just the product of all these other qualities. (Think about this the next time you feel ‘lucky,’ or dismiss someone else’s success as ‘lucky.’)

When I share this story with other sailors, they are universally aghast that we helped these refugees. But I’m proud that we took a risk to alter a situation that might have meant life or death to someone else. I didn’t know I was capable of that before. And I’ve never stopped thinking about the qualities of these men: the intense drive to achieve something better and to risk everything to do so. I can’t help wondering if my own business venture might have turned out differently if I had been able to instill in my team more of a make-it-together-
or-die-trying attitude…or maybe if we had had just one more lucky day.

A great piece of advice I got -- and tried to give.

Ursula Schwuttke — Tue, 11 Sep 2007 16:58:43 GMT

The best advice I got on my first business plan was also the hardest to swallow. A CEO whom I respected took a look at it and told me, flat out: “Tear it up and start over.” In the end, this feedback helped me get my first software start-up funded. But years later, when I tried to pass on my experience to someone else, it wasn’t very productive. These episodes have become linked in my mind as a lesson on the value of knowing not just how to receive criticism, but also how to give it. So I offer my success with the former and failure with the latter, not as two lessons, but as one.

The truth is that my first business plan was pretty lame. It was 1996, and I didn’t know anyone who had written a business plan well enough to ask if I could see it. So I bought books, followed templates, and wrote what I thought was a pretty good plan. The husband of a close friend of mine had, over the prior decade, raised $20 million dollars for his biotech start-up in Boston. I called her, and she volunteered that Charles would be happy to help me out.

Charles didn’t like my plan. With my best game face, I said: “OK, what do you suggest?” He was nothing if not confident and direct. He said: “Really, and I mean no offense, I think the best thing you can do is throw it away and start over.” Then he proceeded, in that same style, to give some reasons for his advice, along with other less-than-encouraging salvos, like: “If you’re not prepared to be turned down at least 100 times, you don’t have what it takes to get funding.”

During the weeks it took me to absorb the impact of all this, I ceased to be a great fan of Charles’s. But then I did start over, and wrote what became the early draft to my first real business plan. Along the way, I received a lot more input: much of it came indirectly, from potential investors who ultimately declined to invest; some came from members of my team, some from board members and advisors. At that point, I was steely enough to take input from anyone who would offer it. I considered every comment, and incorporated most of them. The business plan evolved and matured, and eventually, after about eleven months, it produced my first $2 million in venture capital funding.

Next it was my turn to give advice.
Nearly 10 years later, while changing planes in Dallas, I met Marvin. He was full of enthusiasm – to do an animated film. He was coming from Hollywood, and had gotten enough interest in his concept to convince him to write a business plan. I told him a little about my own background, and before long he had cornered me into agreeing to provide some consulting, including a review of his business plan. In the weeks that followed, he was brimming over with enthusiasm. I read his script—and he surprised me by having an engaging story. I saw sketches of his characters – they were adorable. Finally, after months of salesmanship about how great his business plan was going to be, I received it. What can I say? It wasn’t terrible, exactly. It was something more familiar. In fact, I recognized it like an old friend: his first business plan was much like mine had been … lame.

My personality is not like Charles’s. I think of myself as a positive person who sees the strengths in others. I offered what was intended as an initial commentary, from which we would work forward. I based my advice on the experience from my own three business plans, each honed and hammered until they resulted in three successive rounds of funding. Some of what I suggested to Marvin is similar to what I have suggested to others. Some is unique to his situation. But instead of summarizing it here, I’m including a redacted and abbreviated version of the email that I sent to Marvin, so you can see some of it yourself:

Hi Marvin-

I’ve taken some time to review the package you sent me. I realize that it is not a final version, so my comments may very well prove to be in line with what you currently have underway in the form of revisions. You probably know that it is not yet what it needs to be in order for you to sell it. Here are some initial thoughts. If you feel they are valuable, more will follow:

1. The image on the business plan cover is captivating, and the intense look from [your animated character] holds one’s gaze to the point where one is reluctant to look away. I would go all the way with it, filling the entire page. This cover will get the reader to open your plan.

2. The plan does not make sufficiently clear how you will get from cashing the investor’s checks to a finished or raw product. As part of their due diligence, investors will want to know that you have a firm grasp of such things as: What are the tasks? Who will complete them? What are the challenges? How will they be surmounted? What are the key roles? Who will fill them? What is the rough schedule, in months after funding? All of this should be developed and laid out, as it will be much more difficult to sell on the “trust us, we will figure it out” model.

3. I don’t feel that your description of the team is consistent with all of the resumes. For example, you say, “Attached are the resumes of the people who have worked on blockbuster projects and who have the knowledge and expertise required to make this film a sure success.” This is a bold statement, and if we are going to make it, we need to be able to defend it.

Let me comment on [the first guy]. I see that he has been a “Video Asst” in most of his assignments, and that he has worked on a lot of well-known animated pictures. Ok. Good. [But] how does this qualify him as a producer? Or [the second guy], who has previously “assisted in the production of commercials”? Is he qualified for the Digital Studio Director role? Maybe they are hugely talented, as demonstrated in past innovations and results (we need to say what these are) that parallel the unique needs of your film.

The alternative is to modify the claim about the team, and to have a more realistic, defendable paragraph that describes the actual team and how the individuals you believe in synergize to benefit your project.

and on it went…

…So these are some initial thoughts about modifications we need in order to have a good chance of funding your project. In any event, you are off to a start, and you should be pleased with the progress you have made. Congratulations.

Best Regards,
Ursula

That same day Marvin responded. And it turns out he was far less pleased with my feedback than I had been with that from Charles.

Ursula,

You excel at what you do but I don’t think movies are quite your cup of tea and I frankly do not see the point of burdening you with the vagaries of an entertainment start up operation.

Again thank you for your interest and input,
Marvin,

He fired me on the spot, and I never heard from him again. I never heard more about his film, and I never saw his characters on billboards or gracing DVD casings on a video store shelf. As far as I know, his film has not been made. Oddly, every year or so I look for it, hoping that Marvin found someone else from whom he could contemplate input, perhaps someone who had been down his particular industry’s “startup road.” I say this because he had a really good idea—and it would be a shame if it had not gone anywhere only because he was uncomfortable with feedback.

So this is what I’ve learned: When it comes to advice, criticism is as important as encouragement. Like all diametrically opposed forces, they should exist in balance. So take in all the feedback you can. And then pass it on to someone else.