After six months of exploration since leaving Red Rover, I’ve narrowed down my list of potential new projects to one that is most exciting. For now I’ll hold off on talking about the idea, but since this is my third (maybe fourth) time ramping up a new business, my goal is to be extremely transparent in the process by reflecting on my thoughts, and actions, on this blog so you all can share in the journey with me because it’s bound to be a fun, bumpy, and exciting ride. I’m calling the series “Founder Lessons.” So let’s get started…

When Kevin and I started Swift Kick seven years ago, I naturally thought we’d split the equity ownership of the company 50/50. Kevin refused and said he would never do an equal split again after some ugliness his last company because without a clear leadership structure both legally, and through an organizational chart, it would cause too many issues down the road. Plus he didn’t believe we were both going into the new venture as equal partners. He wanted to spilt the company more along the lines of 75/25. I understood not being 50/50, but a 75/25 split seemed insane to me. What did he know that I didn’t? Turns out there was a lot I didn’t know I didn’t know. To my benefit, we ended up starting Swift Kick at 51/49, though the equity conversation came up several times again throughout the years and it kept shifting through renegotiations and ended around a 75/25 split. The renegotiations were mostly initiated due to feelings of unfairness around the equity split. But mixing feelings with negotiations creates an ugly stew, especially when it isn’t based on a foundation of tangible facts.

As I ramp up my new idea, I find myself going back over seven years of notes to see what and how we ended up determining the equity each time. In doing so, I came across a little gem that I’m calling The Starting Founders’ Equity Equation. It’s a way create a foundation of tangible facts to determine what everyone is bringing to the table to start and thus what the equity spilt should be.

Here’s a description of each element…

• Idea / Vision – If the idea / vision were a tangible pie that equaled 100, who contributed what amount to the creation and generation of the idea up until this point?
• Capital ($) – If the company needs X amount of money (in this case I’m using 100 for X) to get going, who can put in what amount of that total to start?
• Unpaid Time – In the beginning, founders exchange a paycheck for equity. If the max unpaid time someone could put in is 100, what amount of unpaid time will each person be able to put into the business in the start-up phase?
• Resources – If you listed out the resources (knowledge, skill, connections, etc) that were needed to make the business successful and the max were 100 per person. How close to 100 would each person get?

Once you’ve filled in numbers for each element, add up the totals for each founder and divide that number by the total for all the founders combined and you will get a rational way to spilt up the equity that is based on a foundation of tangible facts. In this case, if founder #1 would’ve agreed to a 33/33/33 split then eventually it would’ve come up that he/she was the only one putting money in, or that he/she was the only one with contacts, or that he/she was the only one working for free. It’s better to work through this equation now than to face the argument later and try to renegotiate.

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Update 4/21/12 – Someone created a nice little calculator that helps you figure out the equity split.

NAME:
Booshaka

URL:
http://www.booshaka.com

WHAT IT DOES:
Attaches a point-scoring system to the activity of your Facebook Fans to help you discover your Top Fans through an engagement dashboard.

MY TAKE:
Long time readers of the Swift Kick blog will know that I talk about the 90-9-1 rule often when it comes to community engagement, so to have a tool that really brings this rule to life is a big deal and something I’ve been waiting for. It’s not perfect yet as it seems to only track month-to-month, but I’m sure in due time, they’ll have a full data dashboard.

The actionable outcomes of having a visualization of your Fan’s engagement will be huge. You’ll be able to identify your trending leaders. You’ll be able to reward the top engaged users every month. You’ll build a game layer ontop of engagement. You’ll be able to…what else? How do you see this being valuable to your work?

SCREEN SHOTS:

Like Joseph Campbell’s famous Hero’s Journey philosophy, we like to divide college students into 5 different stages of engagement based on the Engagement Pyramid below…

Each stage is defined by a different set of characteristics of an individual. Fully engaged individuals display a different set of characteristics than apathetic/uninvolved individuals. Thus, the way we interact with individuals in each stage should be different. A “5″ doesn’t want to be treated like a “Neutral.” And treating a “Neutral” like a “5″ might be too much too soon and thus demotivating.

Once we’ve recognized an individual’s stage, then the next step is to move them gradually up the Engagement Pyramid step-by-step. In our Dance Floor Theory program, we call this X+1. “X” being the stage an individual currently is in and “+1″ being the next step that is challenging enough for that indivdual, but not too challenging (e.g. +3) which might be demotivating. If you think of it like a video game, video games do an amazing job of knowing your current level and knowing what the next motivating challenge is for you. That’s the same thing as X+1.

The hardest step on the Engagement Pyramid is moving someone from a “Neutral” to a “1.” Where a “Neutral” is someone who doesn’t care and is indifferent to anything you do and a “1″ is someone who actually pays attention and is curious. Once someone is a “1,” it’s much easier to continue to move them towards a “5.”

Ask most educators and they will tell you student apathy is huge on college campuses. Campuses are filled with “Neutrals,” however most of the activities we do on campuses are geared towards “1″ through “5″ people because they are the ones who will pay attention to our flyers, emails, and Facebook invites and take the extra effort to actually show up to an event. But what about the larger percentage of our campus that are “Neutrals?” What can we do to engagement them, to give them their X+1 moment, and to move them from a “Neutral” to a “1?”

Enter Free Hugs…

Well actually, Free Hugs is just one example of thousands of examples of events we call Blender Events. Blender Events serve two purposes…

1. Cause people to have a pattern interrupt throughout their day. Or as we say in Dance Floor Theory, get people to go from “Meh” to “Hmmm.”
2. Build peer-to-peer relationships by mixing people together with near-peers. Near-peers are people who are models of success that are just a stage or two ahead. In the Engagement Pyramid, a near-peer to an “X” would be a “1.”

Every time we host a Blender Event on campus and cause a “Neutral” to have a pattern interrupt in their day, or get them to go  from “Meh” to “Hmmm,” or connect them with a “1,” then we are supplying them with an X+1 Moment. The more X+1 Moments they have, the harder it will be for them to stay a “Neutral” as they will start to display characteristics of a “1″ whether they want to or not. And once they are a “1,” then we can work on getting them to become a “2.”

So there you have it, That’s the ‘why’ behind Free Hugs. As you may have noticed, it has very little to do with the actual Free Hugs event and more to do with the introductions/connections/relationships that happen from the Free Hugs event.

It’s the end of August and most schools are gearing up for students coming back to campus. That means it’s also my busiest travel season. As an example, over the past three days I took three flights, stayed in three different locations, and rented three different cars. Fall travel craziness gets insane really fast.

But for me, it’s all worth it. The past three programs were almost euphorically amazing. Three standing ovations at three different schools. I crushed each program. I mean REALLY crushed them. I felt so amazing on stage and the students just got it. I mean they REALLY got it. I can’t tell you how awesome it feels to have people come up afterwards and tell me not just how excited they are, but also tell me how it’s going to change the way they think about their student leadership position…and life! I mean to be in a position where I get to do that to 1000s of students every month is freakin’ awesome.

Over the past seven years I’ve played many roles within both Swift Kick and Red Rover. Every position came with it’s own learning curve and challenges. But the excitement of trying to figure it out didn’t always sustain after I did figure it out. Doing trainings and keynotes is something that took me a long time to figure out, but now that I have, it is still just as exciting to me. I love building a speech from the ground up and then presenting it, and I love growing the Swift Kick community so we can impact even more lives with our work and message.

It took me seven years to figure out what within Swift Kick was most exciting to me, but now that I have, I don’t know why I’d want to do anything else.

Below is a picture of me walking two business owners through how to create, increase, and measure community engagement within their business. It’s a collumination of seven years of hands on work in the area and I have to say, it feels so damn good to have it connect together as well as it does. For those who’ve experienced a Dance Floor Theory training, or read the Swift Kick blog, will recognize some of the key points in the drawings below.

Today we had a last minute new mentor that popped into the #TechStars offices. Kevin was already gone for the day, so Dan and I led the conversation. While there was very little business value gained from the meeting because he was in a totally different industry, I gained a lot of value from being forced to talk through our idea. When Kevin and I are together in a meeting, it’s expected that he leads the conversation. He’s done it a million times and he does it well. I’ve told the Red Rover/Swift Kick story a million times too, but each time I tell it, I get better. I want to tell it more. I want to have mentor meetings where I’m leading because that’s how I get better. I don’t get better from listening all the time. And in the same breath I have a lot to learn and keeping my mouth shut and ears open is a good way to do that.

Some things to note about me even being an option for Wikipedia and thus for deletion from Wikipedia. My brother is a pretty high up editor for the site and thus he was the original person to propose my page based on my accomplishments. Then a group of three people challenged the page multiple times and despite my brother defending each accusation based on Wikipedia’s own standards, the page was eventually taken down. For #5, we were named three time campus speakers of the year, but really who’s counting .

I’m updating my bio to, “Tom Krieglstein; Interesting but not notable.”

In January 2005, Kevin and I wrote the first draft of our Partnership Charter (PC). A PC is meant to be an organic, ever evolving agreement among the business partners that covers just about everything from the Buy-Sell agreement to personal work styles. It’s meant to be done before the business is officially formed to better vet the possibility of working together. As the PC book says in the opening, if there is any doubt in the partnership, don’t.

A big section of the PC is on the personality similarities and differences between the partners. Below is a self-reflection of my personality written back in 2005. It’s interesting to see what has stayed the same and what’s different. The biggest difference that I notice is I’m more present when engaging with other people. I have more patience now, am a better listener, and overall more compassionate.

I tend to be very direct in action, explorative, and enthusiastic. I am also charming and sociable which I recognize as key traits to being a good leader. I enjoy using my wits and skills in situations if not for growth then for the challenge.

I like to control my environment, and often times will make a conscious effort to work with the thoughts and actions of others to achieve my desired environment. I am astute in identifying the motives and desires of others. I will use that information to help reach my goals by better being able to work with them.

I am clear in my head about my desired results. However, before I present any ideas to others, I usually go through some preliminary testing on my own to validate. This does not take away from that fact that I am very open and willing to share even some of my wildest ideas with others. In fact, those who know me best, come to expect such results from me.

At first meet, I am generally charming and people enjoy my company. However, sometimes, I cause them a conflicting feeling of being drawn to me, but yet somehow being distanced at the same time. Most of the time I am very social and willing to talk with everyone, however, there are times when I don’t feel that way and want to sit with my back to the corner and just observe instead of engage.

I am very able in achieving my desired results and in obtaining assistance with the repetitive and time consuming details of the activity at hand.

I tend to be generally well liked by most people I meet and work with. This is true because I tend to use my verbal skills to persuade others rather than demand from them. I try to use a mix of both logic and emotions to get someone to do something, instead of direct force. I prefer to work through others to accomplish my goals, rather then ride over them.

I feel very natural in interpersonal situations and feel it is a great strength. I can be short with people even if they are sharing feelings. This is due to that fact that my mind is not fully concentrated on them, and is instead worried about the current goal at hand. This can come across as being short with someone or disinterested.

I am a self starter and tend to get up rather early, or at least cut sleep to a minimum, to get a head start on the day’s activities. I prefer to start my daily activities right away without prodding or direction from others. My energy usually continues throughout the day. I also try to get other people moving at the same pace as me. I do set high standards for performance of myself and others. Sooner rather than later I like to call out frustrations with others face-to-face to help resolve the situation.

I have a great desire to take projects from the macro to the micro, but once it is on the micro level and the ‘details’ are in play, I would rather pass it on to someone else. I recognize that focusing on the ‘details’ or ‘little things’ are a weakness. Also, because of my self-started behavior, I don’t care much for ‘red tape’ in the decision making process.

I believe in my gut and am fully willing to make a decision based on my gut feeling. On the same note, I do solicit opinions from a team to get input. I then take their information and come to conclusions. I can quickly size up information and reach a tentative decision until actions can prove or disprove the theory.