If You Missed ER 58 with Peter Stern, Your Loss (But We Took Notes)



There’s no shortage of tech pitching events, so it’s refreshing when you go to one where the investor/speaker starts out by saying that his motivation was to make the world suck less by writing cool software. “Most people graduate and want to create startups, but they don’t have a problem to solve,” said Peter Stern, former CEO of bitly, founder of Datek Online and Zenbe, and featured speaker at Entrepreneurs Roundtable 58, which took place last week at Microsoft on floor 0006, according to the building pass (“Are there over a thousand floors in this building?” Stern queried aloud. “Why 0006? )”

That’s the 6th floor, according to the elevator and most of the known universe.  But as Stern pointed out in an example on how to keep things simple, 0006 is not the simplest way to display that.

Building his first startup was not the route Stern took after graduating:  he joined the military and found himself building “cool things that I can’t really talk about,” he said. “But how many laser radar systems do you want to build in your lifetime?”

Which is when he left and founded Datek Online.

“The brokerage industry at the time was about robbing your own customers. We were passionate about what we were doing: letting people trade directly on the stock markets, without being ripped off by their own brokers.

Those were still relatively early days in technology (“I’m exactly almost 46. That makes me pretty f&*^&^g old,” Stern noted): Datek ran on thousands of PCs, stacked on baker’s racks, using DOS and Foxpro. Still, they managed to create a national, multi-billion dollar company.

“We used technology to solve a mundane problem. We made less per trade than anyone else but we were wildly successful,” He was far from being a subject matter expert when it came to the Street. “Anyone could have written the software, but no one had the incentive to do it. We got something right, customers loved us, and we were the fastest growing brokerage ever.”

It didn’t come without stress – and SEC investigations. “We experienced more turmoil and unpleasantness than you are likely to encounter in a dozen careers.

His advice to the room:

Don’t read TechCrunch,Venture Beat, Business Insider or Pando Daily to gauge your success or learn what to do. That would be like reading People magazine to learn about medicine or engineering.

Do read Brad Feld’s Venture Deals (“a few pages are self-serving,” he warned, “but they are clearly marked”).

Do read one of Steve Blank’s books. Or both. “They are packed with wisdom, every mistake I ever made is there along with a technique to avoid it, but they are so hard to read.” Although there’s a new edition (“He changed the margins and the fonts,  – it’s still really hard to read.”) For the record, Stern is not a big fan of the Lean Startup Movement, because it doesn’t yield solutions to hard problems that he likes to invest in.

Sell people on grabbers when you’re pitching. Have three grabbers. Example: Datek:” cheap trades.” “If we don’t do your trade in 60 seconds or less, it’s free.” “We tried talking about how we were not going to rip you off like your own broker will, how effective the system was, but nobody cared. ‘Cheap trades’” was the grabber, everything else were holders.

“All this talk about Startup culture is crap; it’s a distraction from solving hard organizational problems, applying process, achieving your goals in a predictable way.

It’s hard to find people you can work with. Want to know if you can work together? Go out and have coffee and see if you can solve a problem together.”

He likes founders who are excited about changing the world and who want to solve hard problems that are worth solving, and who are “fanatically passionate about what they’re doing.”

“No one wants to work hard so that people can share pictures of cats,” he said. “Is that making the world a better place?”

“Entrepreneurship sucks. Startups suck. It takes a lot of luck and there’s a lot of uncertainty and it’s really hard,” he warned. “People like to throw every feature imaginable into their product. Keep it simple. When you’re building a product, take everything out of it until it doesn’t work, then add only the things you need. Don’t call it Floor 0006.”

The Pitches


Zinbox is an e-mail tool that displays e-mails with a visual and zoomable interface. The application is an attempt to simplify e-mail navigation and management. Zinbox is tablet friendly and makes any inbox an enjoyable experience.


umYum allows diners to make deal-based dining reservations. Diners can connect through their Facebooks. The application provides real-time information about dining events in their area.


Skim.me is a meta application for your smartphone that pipes in data from all your social media, websites and e-mail into one convenience interface. Users do not have to spend a considerable amount of time refreshing their pages.

In addition to Skim.Me, the company’s other product Nudge, adds a new feature to your browser which serves as a reminder of the time you’ve spent on websites. The feature is a thin line across the top of your screen that changes from green, to yellow, to red. Red suggests to users that it’s time to end their session.


Exversion provides data professionals the ability to find or upload open data. The platform enables social collaboration via a unified API and saves programmers time from doing the grunt work.

The Shoplift

The Shoplift is the first online social shopping mall. Shoppers can hang out and browse, without feeling the pressure to buy. The site aggregates things your friends, family, or other people are shopping for and you can “shoplift” something you like and add it to your list. There’s a visually compelling interface with racks of clothes shoppers can sort through.

For full coverage of tech events in New York, visit The Watch.

About the author: Patryk Znorkowski

Patryk Znorkowski studied journalism and psychology. He has an avid interest in emerging technology, their impact on society and is always looking for the next revolutionary idea.

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