Category Archives: Venture & Start-ups

UPDATE  while I have the unfair advantage of knowing the winners of Nov @nycSW:

1. GRAND PRIZE –  Waag.it
2. Design –  Postd.com
3. Tech –  CK Tech
4. Biz –  Reading Buddy
5. Microsoft – (same as GrandPrize)
6. My Turnstone – JDecker, JBerman
7. Mashery –  MotiveList
8. CloudMine –  TaxiNomi
9. Twilio -  ClosedCapp

CONGRATS to you all, great work, great weekend.  VERY tight call in the judges room!

I thoroughly enjoy Start-up Weekends.

Having been to 4 now (mentoring & judging two), I’ve generalized some strategies / approaches that seem to derive the most value from the rapid-paced 2 day hack-a-thons.

Like any event, haters are gunna hate.  The only major problem I’ve seen is misaligned expectations about the event (usually from first-time participants).  Come to SW with the understanding that:

1. Your idea will (probabilistically) not be picked.  This is NOT a problem.  I can’t tell you how many sore loosers with pipe dreams of building the next $xB business over the weekend stomp away after the initial pitch session muttering how much they’ll show everyone.  Don’t be a sore looser – that’s not the point NOR the main value of the event.
2. Don’t pitch the wrong idea.  Certain ideas are better lent to making significant progress over a weekend.  Apps, eTailers are.  New cars, new drugs aren’t.
3. Landing amazing tech talent is (still) hard.  Just cause you bought at ticket, then made it through/joined a team, you’ll still have to fill out the team.  Just because someone says they are technical, doesn’t mean you should automatically take them
4. Weirdness around equity is foolish and counterproductive.  Join a team, chalk it up as a learning experience, and make new friends.  Obsession about who owns what is a waste of time and shows you aren’t there for the right reasons.  It’s a WEEKEND.  You aren’t going to build anything worth fighting over that couldn’t be replicated in ANOTHER WEEKEND.  Do your best to be an awesome teammate and people will want to work with you in the future (when it matters).

STRAT #1:  Working on progressing a (real, existing) start-up.  Some people come to get free help on their existing startup.  This tends not to work for several reasons:  a) Other participants realize they are unlikely to really be a part of the team, just a mercenary.  b) Even if they do join, the end discussion is now a bit harder as there is more at risk.  The way this CAN work: carve out a small project within your general business that can serve as validation to the bigger idea or a specific strategy.

STRAT #2:  Fun weekend idea.  IMHO – the best strategy is to come with a bordering on silly / fun / potentially viral idea that could be thrown together quickly.  Why?

• You can actually get a MVP up by the end, and things that work tend to do much better in the final judging
• Use it as a pseudo-audition.  You’ll work with these people in a situation that roughly replicated some of the stresses associated with building a business.  Check out how you work with your teammates – are they potential long term partners?  A missed opportunity is walking around and briefly checking what others are making and how they are working.  Are there people on other teams that are rockstars that you can keep in touch with?
• You’ll enjoy your time if it is fun and something that the other participants will want to try.

STRAT #3:  From scratch -> big, complicated biz.  Given all the other comments, it should be obvious why I’m not such a fan.  Unclear if you can make meaningful progress or validation.

…and props to my friends at CloudMine for their newly announced Gold Sponsorship!  They help you with the backend to quickly build your mobile apps – use away!

Just for fun…

To highlight many of the common the mistakes I see in pitches… I thought I would publicly share my mock business pitch made for Genacast & GA’s “VC’s unleashed” event.  It was a fun event where 4 VC associates made fake businesses that the partners publically tore apart.  Now it’s your turn, can you spot all the major errors?

SlideRocket of MoBowl

One of the reasons I work for Genacast Ventures (besides the main reason: Gil Beyda himself) is that my personal biases are 90% aligned with the fund’s investment thesis:

• Early Stage
• Internet Tech
• Disruptive / innovative tech
• B2B models   

Early-Stage

Who doesn’t like being on the cutting edge of technology and business?  That being said, not everyone has the stomach for the inherent risk.  Betting on businesses this early means you are relying on gut and your judgment of the founders’ character traits more than tangible data.  Many companies Genacast considers have no revenue, little traction, and an incomplete product.

Let me emphasize, although early sounds sexy, most people are frustrated by “filter fatigue”(tm) of being the first line of defense against the droves of crazies.  For me, the excitement of these unknowns outweighs the enormous risk and effort required to find the needles.  Further, as you move from early to later stages, the work (and associated skillset) morph from emphasizing team, addressable market, and product vision into a deeper analysis of what’s been built, the financials, and likely exit opportunities.  Ex-bankers (or corp. dev. types) excel at these tasks (read: most MBAs trying to get into VC are probably a better fit here).

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Internet technologies

Obviously, Internet adoption continues to grow at a tremendous rate (esp. internationally).  More business is transacted online, the amount of data is growing exponentially, and the resulting white spaces are vast and uncharted.   Areas like Cloud, SaaS, eCommerce, Mobile, Security, BI/analytics, even Gaming will continue to grow as the demand online (including mobile access) expands.

All that being said, the opportunities and risk with more traditional industries (services companies, physical products, [debatably] real estate) are statistically better bets to create & capture value (amass wealth).  These sectors are neglected by many of the most enterprising among us.  Like moths to a flame, many of us flock to these sexy internet/tech/start-up spaces admiring the huge successes (often ignoring the countless failures).

And here, I am GUILTY as charged.  I have always had a penchant for tech & startups and it’s hard to fight with this passion to get excited enough about one of these other spaces.

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Innovative & Disruptive Tech

I am particularly excited by unique and innovative technology.  Genacast’s thesis revolves around interesting tech that serves to un-level the playing field for some amount of time.  Like I mentioned from my 3Qs post, these should not be immediately replicable or transparent when viewed by a savvy user of your service.  Having something truly different translates to a competitive advantage, potential for acquisition, and frankly ability of the team to identify a gap and create rather than replicate.

My qualifier here, (I hope) I am not obsessed with innovation for innovation sake, but realistic about its application.  The tech that sparks my interest most tends to be commercially viable in the short term (1-2 years) where I can see the real-world impact playing out.

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B2B Business Models

In B2C, you could have 2M “users” without any revenue.  Numeric user traction is only an indicator, not real validation of a business until ‘consumers’ start paying (convert to ‘customers’) or you are able to monetize in other ways (ads or emails are pitiful justification).  Whereas in B2B models, having a customer usually means something in terms of large checks in the door.  These customers have considered a capital outlay, gone through a couple meetings and decided you could bring more value to them than the cost.  They act fairly predictably and constructing a pitch that hits their needs is increasingly transparent after learning the dynamics of the space.  Furthermore, your potential customers are identifiable and easily found.  Yes, sales cycles can be long and taxing, but this type of traction is much more indicative of success.

Similarly, the ‘picks & shovels’ approach is a bit of a hedge in a particular model.  If you create the platform that all the couponing sites should use, you are more likely to succeed than the thousands of daily deal, geo-local coupon, discounted shopping, social shopping apps are, since you are linked to many of them.

Since B2C is easily understood by everyone without deep tech or industry expertise, it seems to be the default approach.  Sadly, there is a dearth of good companies pursuing B2B approaches.

Clearly, this is a preference rather than a hard line – have fallen in love with many B2C companies as well…

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East Coast

Personally, I don’t really care about this filter, but it makes sense.  Proximity to young companies is more important than one might think – ability to be there when needed, help make introductions or conduct interviews, proximity to the core of your network tends to be somewhat regional, physical presence at board meetings, etc.  I’m a West-coaster originally, but agree that seed-stage investing should be relatively close if an investor plans to have a substantive impact on progress.

The better VCs usually have fairly pointed questions while maintaining a fairly friendly exterior (many fail on one, if not both, of these metrics – though most tend to be friendly, despite the stereotype).  Our goal is really not to proceed lock-step through the basic mental checklist I mentioned earlier, it’s all about identifying the key issues and gaining comfort you’ve addressed those concerns.  Neophytes or amateurs (myself often included) will march through down this list, but it does show inexperience if they are asking questions with obvious answers.

For example:

• If you come to me saying mobile bowling lane booking – I’m asking about market size, not whether it is going to work (that’s assumed).
• If you come to me telling me about a insulin delivery device, I’m not worried about market size.  I’m probably worried about IP and approval, possibly go-to-market strategy.

Other major concerns that I see very often: scalability, crowded competitive/substitutes space, addressable market size, revenue/business model, long-term defensibility (an acceptable answer is “it’s not” rather than defending something that’s not).  Think hard about the top one or two gut issues investors will have with your idea and be prepared to NAIL them.  This is your best chance at success.

Furthermore, investors (possibly irrationally) love metrics:

1. Traction (uniques, page views, etc.)
2. Cost per acquisition  (relevant search term costs, conversion rates, etc.)
3. Customer’s lifetime value  (revenue per customer, churn rates, etc.)
4. Engagement metrics  (number of returns, social sharing or virality coefficient)

If you don’t know yours – get on it!

30 mins = 30 mins: use it wisely!

Similar to my post on 3 Questions Entrepreneurs Get Wrong, entrepreneurs often fail to use their initial (usually only) shot with a VC effectively.  Given the length of the post, I’ve split it into parts: general tips on your meeting, a rough breakdown of time use, and tips for specific groups of entrepreneurs based largely on stereotypes.

At Genacast, we give anyone in the door 30 minutes for a first meeting.  Here are the rather unfortunate truths that many entrepreneurs usually fail to realize:

• Our days are packed with pitch meetings.  We love them, it keeps us fueled to hear about each exciting idea, but the end time is usually a hard stop.  Even if we are late, that doesn’t mean we can go over (or it would cascade into large delays at the end of the day).

• Whether admitted or not, we have fundamental questions we check-off in our mind, usually before we want to delve deep into your specific solution: (roughly, and in no particular order)
  • What is the core value proposition?
  • Is the market big enough?
  • Is this the right team?
  • How will it make money?
  • How will they go to market?  Acquire customers?  Build a network/marketplace?
  • How does the competitive landscape look?
  • Do they have some type of sustainable competitive advantage or is this an execution play?
  • …Seems like quite a list, but hit these quickly!*  Just the headliners will suffice to start off. We will drill deeper where we feel the need or move into the more interesting nuances in the business.

• Prepare
  • (At least) read their website,
  • know what they invest in (our investment profile),
  • who a couple of their portfolio companies are,
  • if they have a competitive portfolio company,
  • the background of the person you are speaking with
  • …We know you pitch many VCs/Angels, and we can’t expect you to know much detail, but the vast majority don’t know anything.   Those that don’t do this basic step waste precious meeting time covering these bases (and frequently spark a realization that it’s not a fit with the fund’s stated thesis).

• Move slides to backup.  If you have awesome data, customer feedback quotes, detailed financial models, numerous screenshots, etc. these are best left in backup to be referenced as needed.  Don’t assume we want all this until we ask about it, usually they are not essential in a first meeting.

• No monologues!  I can’t tell you how many meetings I’ve had where the entrepreneur gets started, and I don’t have an opportunity to jump in for 10-15 minutes.  At some point, I have to be a bit rude and cut you off so I can cover some of the gaps you left along the way (and everyone’s perceived holes will be different, don’t assume because you are hitting the points that came up in the last 3 meetings, you’re telling me what I what to hear).      PAUSE.        Yes, pause.       Frequently.      Leave these opportunities for questions or subject changes.

• Listen carefully  as investors are usually driving at specific concerns they need to allay.  Make sure you understand what they are really asking before launching into a long explanation.  Entrepreneurs get similar questions a lot, so a buzz word can launch a canned response, missing the vital nuance differentiating the question.

Example meeting profile (by minute):

• 1 – friendly banter
• 2-3 – Me: intro to our fund, maybe myself if I can squeeze it in
• 3-4 – You: Additional questions about our fund
• 4-6 – Your background, maybe a bit about your team
• 6-7 – Headliner of what your building
• 7-10 – Major value proposition & best use-case scenario
• 10-12 – Addressable market size
• 12-15 – Revenue model
• 14-17 – Go-to-market
• 17-22 – Competitive landscape & your sustainable competitive advantage
• 22-25 – Investment amount and use of proceeds
• 25-30 – Buffer if any section runs over or a chance to get to the good stuff.

Throughout, keep the door open (verbally, with devices like pauses or upwards inflection that begs a response) for our input.  Throughout (and especially if the meeting does NOT go well), ask for advice.  BY FAR the best meetings are fairly rapid exchanges where we are able to cover some of the interesting parts of your business together (again, don’t assume you know what those gems are), so try to answer questions fairly concisely.  Ideally, you want to be talking no more than 2/3rds of the time.

* One potential strategy: start your deck out with a slide that hits on the major 5-10 points you know we will ask about.  My friend Mark Davis (DFJ, Kohort) first showed me a deck starting with such a slide, but rarely see this tactic used.

Typical Old & Young Mistakes; demographically specific hints

(I admit full guilt of stereotyping, bias, etc. I KNOW that these are gross generalizations with many exceptions, I hope they are helpful, not offensive)

Newbie, YOUNGER entrepreneurs:  You tell us nothing about team relevance.  Often times that is because it’s a bit of a stretch, but we’d love your best attempt.  We’ll expect you are going to put in the all-nighters, survive on a shoestring budget, live and breath your space, and hustle.  We want know how you are positioning yourself to beat others and are passionate about your space, even though you don’t have years of expertise to back it up.

You usually haven’t prepared enough – market dynamics, competitor deep dive (not just their pricing, but their rough costs and future strategy as best you can guess).  You tend to think like the end-user which is great, but usually you are the target of your proposed solution, make sure there is a broader appeal.  Validate that the business is attractive given the economics and external dynamics.

Newbie, OLDER entrepreneurs:  You spend too long explaining your background – your path through life, how much you know about the space, etc.  We know (and expect) you’ve been around the block, we want to hear the 1-minute, high-level summary.  If we want to know more, we’ll ask, believe me.  One unique item you should hint at (maybe not explicitly say): what is your risk profile given your personal responsibilities (family, mortgage, etc.)?

You also tend to come prepared in the wrong ways: decks too long (esp. over 20 pages!) and overly specific (how do you know the IRR or that your 4^th year revenue will be $63.7M).  I’d encourage you to think more from the perspective of the customer (how and why they’ll use it) and nail that – as you come from a generation focused on pushing products.  Read Steven Blank’s stuff.

REPEAT entrepreneurs: Why are you reading my blog?  Pitch me your next business, you know we love ya!  But seriously, don’t ride on your laurels – we know you understand the risks and emotional rollercoaster that is part of the course.  Highlight the biggest one or two mistakes you made, prove to us you can be self-critical and you are just as hungry this time around.

Many will claim to be ‘seasoned/repeat entrepreneurs’ that probably shouldn’t – be honest about your past business.  People claiming to be ‘successful’ entrepreneurs that are quickly revealed to have sold a piece of software they hacked together on the side of their day job for $10K in a fire sale just as you were shutting it down is interesting & relevant, but doesn’t quiet count and a successful exit or real start-up pursuit if you were holding down your normal job.  If we like what your building, we are going to do research on you, so all will be revealed…

Likewise having failures, of course, count positively (as long as you havent had a string of 10) – we’ll want to hear about these t0o.

Albeit, I am a neophyte to the investing scene, but have quickly learned that investors ask fairly repetitive questions to address obvious concerns.  In turn, the answers received start sounding similar as well.  A couple questions that startups frequently struggle with (or, more importantly, think they have good answers to, but usually aren’t compelling):

(there aren’t necessarily wrong or right answers, but worse and better answers – of course these can shift depending on the industry, business, etc.)

Question 1: Addressable Market Size?  

What’s being asked:  If you sold your product to everyone in your target market (at the proposed prices), what would your annual revenue be?

Key: It does not have to be exact – order of magnitude is almost close enough.

Worse answers:

• “I don’t know”  -  do your research!  We expect you to be close to an expert in your space
• # people, # companies, # transactions, etc. in the space  -  these are metrics that help build to an addressable market size, not the final answer
• Industry spending numbers  -  “$200B spent on enterprise IT solutions”…these numbers are easy to find, and way to broad.  Define exactly what you do and calculate only that part. 
• “It’s huge, definitely over a Billion”  -  yes, it’s well published that VCs are seeking companies in $xB dollar markets, but unjustified, approximate numbers are a sign that you don’t know the space (see #1)
• “$2.37Trillion dollars”  – Do a sanity check, if your number is larger than the GDP of most industrialized nations, Houston, we have a problem
• “10M”-  hinted at before, if your addressable market is really this small, then it is probably not a relevant venture opportunity unless it is growing at over 1000% per year

Better answers:

• “We’re addressing a ~$2.5B market, let me quickly take you through the math and share my (multiple, reputable) sources that support this estimate”
• “There are three incumbents in this exact space, and their aggregate revenue is around $5B”

Question 2: Sustainable competitive advantage?

What’s being asked:  How do you un-level the playing field, for the next ~3-5 years?

Key: it is a question about today – what are you holding that is special

Worse answers:

• First mover  -  a quick copier often can get more things right and learn from your mistakes, little advantage here except in very specific industries cases
• Network effect & traction  -  besides the fact these are often unsustainable, you can’t cite things that you don’t currently have.  “We will have a lot of users and they won’t want to switch” is not an advantage until you get those users.  Don’t confuse switching costs with competitive advantages.
• Software IP  –  possibly a controversial statement, but generally considered not sustainable, as most software patents are fairly easy to work around

Better answers:

• Vital, exclusive partnerships with the major customers/suppliers/partners that constitute a significant % of the space
• Access to proprietary information/data that others won’t be able to gain
• Hard to replicate technology at the core of the business
• An incredibly difficult problem that your team is uniquely qualified to solve (you have guy that built the only working quantum computer)

Question 3: Competition?

What’s being asked:  Who will fight you for anything you need to transact business

Key: Don’t focus on today but over the next 3-5 years, especially once you grow to a decent size.  Other startups at the same and/or earlier stage as yours should be mentioned, but not usually our chief concern.

Worse answers:

• We don’t have any  -  Most probably wrong, sure you know the space?  Besides, no competition might also indicate that this is not an interesting or profitable space.  Don’t forget what folks are doing today to address the need.
• “(insert large, existing player) won’t move into this space because they are focused on their core business”  -  might be true, but thousands of entrepreneurs said that about Google and social and now local…  These players are not dumb and capitalists – they’ll go after where the money is, sure some through acquisitions, but usually a small number for a given space.  What happens when you get some traction and show this is a great space?

Better answers:

• “Let me walk you through the players in this space that have me most concerned and tell you how we stack up on these key dimensions.”
• “Given the looming threat of (x big player) entering, here is our strategy to continue to stay 3 steps ahead”

There has been a lot of debate on whether an MBA makes sense for aspiring entrepreneurs.  The general buzz on the Internet is that it makes no sense to get an MBA by pointing to the cost, what you learn (or don’t), the opportunity cost of the 2 years, etc.  I had many similar doubts upon entering my MBA as well.

Honestly, most of these seem valid.  However, I think a good deal of the real benefit is either unknown by those that did not attend or ignored.  Does an MBA degree really add any value?  It all lies in leverage of the right opportunities.  Even going through the same program, same core classes, you’d be surprised how different an experience two MBAs have. If there was one thing an MBA provides, it is rich and unique opportunities for those with little relevant background in a field.  How else could you fly to Brazil, meet with the CEOs of the top 5 companies in a couple days or go to Silicon Valley and get time with 10 of the top VC firms over a weekend without any background or individual connections.

Beyond that, I’d ask for a little more rigor around these claims, especially with regards to MBAs being inherently risk adverse (purely by attending).  Look at the rate of started companies from the top undergrads/high schools (whatever stage of education you’d vouch for) and compare that to the rate of businesses started after an MBA program.  My gut GUESS would be that Stanford GSB, HBS, Wharton, MIT Sloan, Haas produce more founders per graduate than almost any other programs (baring say MS Engineering at Stanford).

With the advent of sub-communities in the various schools (e.g. Startup Tribe at HBS or Founders’ Club at Wharton), students are focusing on actually building things rather than generating more ideas they leave sitting in little black books (self jab).

To say the least, I see numerous companies started by my classmates and am proud to know 10 students that are dropping out after a summer where they saw significant traction or validation on their projects.   The broader start-up community applauds this as sticking it to the B-schools and I see it completely opposite.  I applaud their departures because they came to school to figure out their next move, became impassioned by an idea, leveraged the resources at hand (alumni, classmates, research for classes) to get validation, test the market, raise funds, get into accelerator programs, etc. (most of which they didn’t even know existed or how to access before they come to school).  I admire their departures but see them as a testament to the value of the very MBA they are leaving.

To departing MBAs – Congrats guys, go kill it!

To other MBAs – build stuff, leverage your time at school make actual progress

To non-MBA haters – stick to critiquing what you know and don’t dismiss MBAs off-hand, they tend to be some of the scrappiest people you could hire (just check their egos, unfortunately a few have given the rest of us bad names)

(aka: I am a hypocrite) 

I’ve been lucky enough to work at Genacast Ventures as the right hand of rock-star Gil Beyda (founder Real Media, Tacoda, etc.).  Turned down some awesome early-stage start-up opportunities to take the role, and will always wonder, but am very happy with the choice.  Only 2.5 weeks in, happy to share some surprises and advice:

In short, I’ve loved it – BUT probably don’t recommend pursing VC immediately to most others (esp. newly-minted MBAs).

For those looking to get a job in VC, I will repeat the advice I get from almost every VC I’ve talked with: [Why VC?  Don’t.  Go start a company, get some scars or (preferably) success stories and come back in 5-10 years.]

Sure, it’s hard to get a job in this small (and shrinking) industry, but that’s not a good reason not to try.  After only a short while on this side of the table, I see why this advice makes sense:

1)   MBAs, Undergrads, Consultants, etc. generally don’t have the depth of expertise or experience to quickly screen companies.  Unless you’ve started a couple companies, it takes a while to develop the right gut to not waste the partners’ time.  I am getting better, but still occasionally show deals to Gil that are fairly clear passes for our fund, just to make sure.  The best VCs are such because they can filter faster than anyone.

2)   Joining at this point in your career means you are (generally) on a non-partner track.  Meaning you’ll stick around for a couple years, maybe get a promotion, but end up having to go start a company or work as an operator at a portfolio company before you could be considered for further advancement.  Why not do that now?  Especially given the market conditions…

3)   Lack of carry + not the best compensation compared to other options make the opportunity cost high – you shouldn’t be in this for the money anyway.  If you are, go to banking or PE, even consulting over VC.

4)   The VC skillset doesn’t directly translate into an entrepreneur’s skillset, if you ever want to go that route.  It does help you screen your own ideas and make great contacts, but these are attainable if you are scrappy without a VC job.

So, why am I doing it?  I always have had a penchant for early-stage investing as you are potentially seeing the most innovative stuff (in reality, almost all are incremental improvements), are almost fully aligned with the founders, and can actually help a bit with feedback while they are still iterating.  That being said, the difficulty of finding these needles in haystacks without a metal detector is not to be understated.

I quickly realized after a few weeks that early-stage screening consists of sifting through more ‘non-ideal’ plans than you can imagine.  Clearly, nothing is perfect, but most aren’t close and consume the vast majority of your time, even once you learn the art of how to pass quickly.  For many this results in what I’ll call FILTER FATIGUE.

Later stage investors have the luxury that (even though all will claim to have the same problem) their predecessors have done some level of screening.  They see deals that an (at least somewhat savvy or rich) individual(s) vetted and believed could succeed.  Sure, there is still a fairly sharp funnel at each stage, but the mouth of the funnel deals with all the crazies.

What this all means: hustle & search broadly and filter as quickly as possible.  Even more than an entrepreneur, your job is to hit the street, network like crazy, develop a presence in the ecosystem, etc.  In Gil’s words: ‘the VC game is filled with a bunch of cowboys.’  We often pass each other on the Amtrak in and out of NYC, spending the vast majority of our time with entrepreneurs rather than discussing deals or working together.

I hope that sheds some light on what it is like to work at an early-stage VC fund and hopefully deters many…the few that are undaunted will have a tough enough road ahead.

(subtitle:  Start-ups’ Biggest Hurdle = Recruiting Tech Talent)

For a start-up, finding good tech talent is tough.  It’s a near universal problem these days, but nowhere is it worse than at MBA programs.  A school of 1000-2000 ambitious, enterprising, idea generating machines without skills to execute on them.

Sitting in positions both as a VC and club president in the start-up space, I get asked the question every day: ‘do you know someone who knows x coding language?’ or ‘ where are tech people hiding?’ or ‘I’m outsourcing my coding to x foreign country, think it’s a good idea?’.

  (NOTE: I did this Prezi along this topic.  High level, but prettier than a blog post)

Just to offer a couple thoughts:

1)   Don’t outsource your core tech to a development house, aboard, anything…  I know it is tempting due to the cost differences, not having to give up equity, etc.  If you don’t have someone with the same motivations as you, the road ahead is going to be very tough.  Sure, outsourcing  non-vital parts can be fine, and outsourcing pieces of the core managed by a local CTO on your team is a doable option.

2)   Prepare for meetings with tech talent by knowing (at least roughly) what you need.  Research or talk to friendly tech savvy people that can help you determine what skills are required.  That being said, be open to their suggestions, even ask how they would solve a particular problem that you already have a decent answer for – see what they come up with.  These meetings show that you are serious and practical about how to make your idea come to fruition.  Wireframes & tangible examples go a long way!

3)   Know your approach.  One of the common failings (esp. of MBAs) is in the way they interact with potential tech talent.  Treat them like second class citizens, they won’t help you (and rightly so).  Even if you perceive they my need you, they may not realize it yet.  And you definitely need them.  Treat them with respect, a future partner, and if they can’t help, maybe they know someone.  See this blog curated by CS undergrads sick of their treatment by Wharton Undergrads and MBAs alike:

  – DON’T be a Whartonite Seeking a Code Monkey!

- Also some great commentary found on friends’ blogs:  start here

4)   Know where to look.  Go to events like: (sorry, regionally & school focused)

1. Startup Weekend
2. NY Hack Days / TechCrunch Hack-a-thon
3. Drexel entrepreneurship sessions
4. Philly Tech Meetup
5. Philly Startup Leaders
6. Technically Philly
7. PennApps hackathon
   
8. Sign up for PennLaunch
9. Weiss Tech House: Pennovation
10. (tell me what I am forgetting off the top of my head)

5)   Get your hands dirty!  As much as it is a scarce resource, coding is actually not that hard to pick up.  The basics of most languages are simple.  Elegant and fast coding is much more of an art that you master over time with experience.  Showing that you are willing to help, feel their pain and understand the hurdles they might hit goes a long way.  Start Hacking!