Mentoring at PIE, Your Start Up Opportunity

This topic is being discussed around town and given the respect that we all have for your thoughts it would be good to see the following concerns addressed.

* The most discussed concern is about how W+K taking ownership in a start up will prevent that start up from working for any other ad agencies or clients that might be competitive to W+K clients. If anyone tells you this isn’t a problem they don’t know the agency world or they aren’t telling the truth.

Minority shareholders have vast amounts of power and access to company records. Address this issue and you’ll see many more qualified applicants. The equity component must be removed if PIE is going to succeed for the entrepreneurs who buy into the program.

* For those outside of Portland the promotion of PIE has been misleading. PIE offered free office space and didn’t take any equity for those who’ve had access to the space. Giving the impression that PIE is somehow responsible for six companies being funded or acquired is misleading. Not untruthful, but misleading. The promotional copy sounds like it was written by an ad agency.

* Mentorship is a good thing but where are the mentors who have experience in working with international brands and advertising campaigns? That is the value of PIE, trading equity for the chance to pitch the big guys. Everything rides on that. The rest is insignificant.

* PIE should not be thrown into the same category as an incubator or accelerator. It is new format that does not prepare a company to go out to the market or for future funding. It prepares it for a trial campaign with a large brand. Very few trial campaigns proceed to the next step. All that matters is making any trial succeed beyond expectations.

If a participant doesn’t get a trial campaign or that campaign doesn’t proceed to the next step then it will be nearly impossible for that company or technology to raise money or present to other agencies.

It’s a one shot deal.

* Very few incubators in the past two years take equity on signing. If W+K wanted to look at new technologies for their clients they don’t have to make an equity grab in the process.

As is, this is a terrible deal structure and many of us hope the mentors associated with this venture will mentor PIE’s management and create a fair and honest structure.

My thoughts are simple:

* The entire thing has been an experiment. This is but another version of the experiment. If it doesn’t work, then they can try a new structure.
* All of the things you point out are things that people considering signing up should be aware of. The percentage of ownership is listed on the home page. If it isn’t a good deal, PIE won’t get any startups and they will have to look at restructuring it.
* I disagree with some of the points—in particular if the startup is based around building a product, I don’t think W+K’s clients are a problem and I’ve worked in an agency for years. But who knows you could be right. Again, PIE can adapt.
* And yes, the companies that participated in PIE didn’t get their funding directly because of PIE, but come on, look at the list and honestly tell me there isn’t something interesting going on there.

As I wrote about, when PIE first started, I flat out didn’t get it. I didn’t understand how it could be successful or why it made sense.

Frankly, in its new incarnation, I still don’t know if it will be successful. Like any of the startups that choose to participate, PIE itself is trying to build something that may not succeed.

The only difference is this time I finally get the idea that *experiment* is in the title for a reason, and that this time, I’m along for the ride to lend some of my thoughts on mobile to people trying to get their startups off the ground.

If it’s an “experiment” is should only acquire equity if, when and after it performs and delivers.

People’s businesses, equity, value and their development IP are not so “casual” that they should be acquired by something that is unproven and as you suggest, an experiment.

Acquiring equity upon signing is not an “experiment,” it’s a transaction of trust. The negative ramifications of having an agency owner in your technology needs to be addressed and presented, especially if it’s very junior developers applying. Or leave it as is and see how it goes provided you please disclose the pitfalls to any applicants as a matter of ethics.

You are correct that there “is something interesting going on there.” But it needs to be less casual if it’s going to presume it’s value is worth the cost of admission.

I have to say, I agree wholeheartedly with Molly’s comments. I know and like many of the people involved with PIE, as well as the mentor list. But this whole endeavor is significantly overstating the role it (PIE) had in the individual success of the companies that passed through it.

I get it, marketing is marketing. But I find the way it is being pitched as incredibly disingenuous, and the deal structure that’s been articulated as nonsensical. After reading the Oregonian’s article on W+K’s involvement, I see a lot of fluff and no real substance.

I’ll tell you what I would look for in an incubator – track record and experience of the individuals running it, and a clear program of mentor-ship and advancement. To me, the people running the next iteration of PIE are great individuals whom I respect. But there is no coherent track record of startup success among them (indeed it seems heavily bent towards agencies and small biz), and no clear program beyond a cloud of mentors. PIE needs to spend less time on self-aggrandizement and more on explaining it’s program and deal terms. How, not What.

You can only skate on the word “experiment” so far – I think it’s a cop out. If you’re building a company that is designed to take funding, and scale, and everything associated with that path – I would advise against the current PIE incarnation until they iron out these issues.

I’ll be honest. I haven’t spent much time thinking or worrying about what PIE is or isn’t doing.

As Sasha mentioned, there are good people involved. They’re trying something out. They asked if I would help advise some of the startups that are doing mobile and my general opinion is that anything that I can do to help Portland’s mobile community is something that I should consider.

I’d like to see PIE succeed because of my affinity for the community it created and the people involved, but my involvement is minor.

That may not be sufficient for you, but that’s where I’m at. If you feel strongly they should do something differently, the people involved are easy enough to contact.

@Jason to be clear, I am not faulting you or the mentors. But in trying to get the managers of PIE to address this issue for two weeks, myself and three others have been unsuccessful. Now that the mentors are promoting PIE you wind up in the oven.

@Sasha points out another discussion point that circulates. Those running PIE either don’t have a track record, and for W+K it is not their core business or passion, it’s an experiment they can continue with or abandon.

The presumption that PIE is worth equity, upfront, no strings attached, is beyond presumptuous. Recognizing how equity will inhibit and prohibit participants from marketing themselves to others is the fly in the PIE.

PIE was vacant space owned by W+K that they couldn’t lease during the recession. They were generous and kind to the local tech community and it helped out a few companies who needed a desk, if you befriended the right people.

That’s fine but it’s not like fairy dust was sprinkled upon those working there, bestowing magic from W+K’s Bird’s Nest. We all want PIE v.2 to be wonderful and appreciate the concept. If they serve their PIE with a side of reality, it might taste pretty good too.

Renny Gleeson, who created the concept of PIE as well as its new iteration, has posted his answers to these questions:

http://siliconflorist.com/2011/07/28/filling-details-pie/

@Rick it was encouraging to see that PIE is revising it’s structure and taking a very positive step to value equity more fairly. The ‘per founder’ calculation concerned many as it created uneven valuations and was inherently unfair in relation to equity, even if it made practical sense to offset the higher expenses a larger team incurs.

I was disappointed by the explanation of how other ad agencies will openly work with a company that’s partially owned by a competitive agency, W+K.

I don’t believe it. Ad agencies can’t even take on competitive clients. There is no way they are going to disclose their campaigns and strategy to a company that’s owned by a competitive agency. They would risk losing their client. That is the daily fear that permeates every agency. They won’t risk it.

Renny’s use of Urban Airship as an example was confusing? Do W+K/PIE have equity in Urban Airship? Does Urban Airship even contract with ad agencies? That’s none of my business but it does not seem to accurately address the concern. It side stepped the issue.

The PIE application is tantalizing and sexy beyond belief. But it needs to continue to revise it’s structure and it’s sales pitch in order to succeed. It needs to approach the relationships as if it’s beginning a marriage not a hot weekend in Cabo.

There are other more appropriate venues to continue this conversation. I’m closing comments on this blog.

If people want to discuss PIE with Renny and Rick, do so here:
http://siliconflorist.com/2011/07/28/filling-details-pie/