I don't do resolutions, but reminders are another thing altogether. And before I head out to celebrate the arrival of Twenty-Ten, I thought I'd make a special note of the one consistent criterion for success (especially for entrepreneurs).
A few years ago I'd met the owner of an insurance company (he brokered our company's insurance needs) and he mentioned that his guiding principle for success in business was 'showing up every day'. I must confess that at that time I was unimpressed and thought that what worked for his industry surely couldn't apply to the dynamic world of startups.
With a little more startup experience under my belt, I now believe that the guy was on the money (and I'm more open to non-traditional sources). What I have seen over and over again is that success comes to those who stay engaged, those who 'show up' to get the job done - those who don't give up or get side tracked. The past year has been a tough one for many, especially early stage entrepreneurs, but the ones who have ridden it with some degree of success are those who decided to stay in the game and just play it, without hankering for spectacular moves or quick wins. Companies with limited funds hunkered down and focused on the basics and those with no funds got creative. The teen entrepreneurs I mentor (read more about them here) are a shining example of this: they don't have a smooth-talking CEO or snazzy marketing material or even an eye-catching product, but they did make it to every single meeting and diligently worked on their weekly checklist - and managed to outsell all other teams, even ones with more flash.
As an added bonus this concept could apply to just about anything - from startups to Pilates to making new friends. So, a simple new year's resolution/reminder: just 'show up' to whatever you choose to do in your life and all kinds of goodness will follow. Cheers!
Channeling the inner entrepreneur who views life as a startup. Musings about people, their spirit, the startup ethos and the entrepreneurial attitude, with an emphasis on education and social ventures. The 'how-to'? Not so much. But definitely the why, the what and the whatever.
Innovation matters
Innovation is must-have for entrepreneurs for sure, and entrepreneurs have been anointed the potential saviors of our sluggish economy so innovation's been rather news-worthy lately. There was a recent Newsweek article on how Americans and the rest of the world (the part that was polled that is) view the state of innovation and the American economy and this stuck with me:
On some issues there is widespread agreement: two thirds of respondents believe innovation will be more important than ever to the U.S. economy over the next 30 years. But the survey shows some striking contrasts as well. Eighty-one percent of Chinese believe the U.S. is staying ahead of China on innovation; only 41 percent of Americans agree. To find the next big breakthrough, Americans are focused on improving math and science education, while Chinese are more concerned about developing creative problem-solving and business skills.
(You can read the article here.)
Good news: we believe that innovation is important. Bad news: many Americans believe we are not staying ahead of China in this. Worse news: more Americans focus on science and math education while more Chinese are thinking about 'creative problem-solving'.
Why is it bad if Americans think they're falling behind? True, you don't want to be smug or delusional, but perceptions should be based on reality and the reality may be not that the US is falling behind, but that the others are catching up faster. The downside of this belief is the rush to change the way we do things, even the ones we do well, particularly the good part of US education (yes, it's there!) that develops non-conformist creative thinkers.
Math and science are important, actually, critical - in fact they are the foundation for problem-solving and there's not only a knowledge deficiency in these subjects among US students, there's a marked lack of interest in these purportedly nerdy areas (something that is not the case in most of Asia). But the US didn't get to be an innovation leader sticking to a "just the facts ma'am" approach. Facts are within the box and need to be known, but it is the ability to look beyond the facts and think outside the box that drives new concepts and quantum jumps in innovation. Innovation is not a bunch of theorems and formulas - it is spotting opportunities and then knowing enough about theorems/formulas to build on them. So the US should not only focus on math/science skills, but also on creative thinking and make sure students have plenty of unstructured time when they can exercise their right brains and dream up new ideas.
But, it's not all bad news. One of the best stories of 2009 is this one about DARPA (Defense Advanced Research Projects Agency) and it's forty red balloons challenge to celebrate the 40th anniversary of the Internet (also a DARPA result). The balloons were tethered in 40 locations across the US and the first team (it was just not possible for an individual to do it) to identify all locations won a substantial cash prize. The goal? To learn how the power of crowds can be gathered quickly and productively - and possibly more things that are not even understood yet. You can read more about the red balloons and the MIT team that won it by checking the press release from here. What is amazing is the idea that the Department of Defense, which one would assume would be stodgy and secretive, created this wacky public challenge. It is so cool and I believe this is how the US can stay ahead - being innovative about driving innovation and making it fun.
On some issues there is widespread agreement: two thirds of respondents believe innovation will be more important than ever to the U.S. economy over the next 30 years. But the survey shows some striking contrasts as well. Eighty-one percent of Chinese believe the U.S. is staying ahead of China on innovation; only 41 percent of Americans agree. To find the next big breakthrough, Americans are focused on improving math and science education, while Chinese are more concerned about developing creative problem-solving and business skills.
(You can read the article here.)
Good news: we believe that innovation is important. Bad news: many Americans believe we are not staying ahead of China in this. Worse news: more Americans focus on science and math education while more Chinese are thinking about 'creative problem-solving'.
Why is it bad if Americans think they're falling behind? True, you don't want to be smug or delusional, but perceptions should be based on reality and the reality may be not that the US is falling behind, but that the others are catching up faster. The downside of this belief is the rush to change the way we do things, even the ones we do well, particularly the good part of US education (yes, it's there!) that develops non-conformist creative thinkers.
Math and science are important, actually, critical - in fact they are the foundation for problem-solving and there's not only a knowledge deficiency in these subjects among US students, there's a marked lack of interest in these purportedly nerdy areas (something that is not the case in most of Asia). But the US didn't get to be an innovation leader sticking to a "just the facts ma'am" approach. Facts are within the box and need to be known, but it is the ability to look beyond the facts and think outside the box that drives new concepts and quantum jumps in innovation. Innovation is not a bunch of theorems and formulas - it is spotting opportunities and then knowing enough about theorems/formulas to build on them. So the US should not only focus on math/science skills, but also on creative thinking and make sure students have plenty of unstructured time when they can exercise their right brains and dream up new ideas.
But, it's not all bad news. One of the best stories of 2009 is this one about DARPA (Defense Advanced Research Projects Agency) and it's forty red balloons challenge to celebrate the 40th anniversary of the Internet (also a DARPA result). The balloons were tethered in 40 locations across the US and the first team (it was just not possible for an individual to do it) to identify all locations won a substantial cash prize. The goal? To learn how the power of crowds can be gathered quickly and productively - and possibly more things that are not even understood yet. You can read more about the red balloons and the MIT team that won it by checking the press release from here. What is amazing is the idea that the Department of Defense, which one would assume would be stodgy and secretive, created this wacky public challenge. It is so cool and I believe this is how the US can stay ahead - being innovative about driving innovation and making it fun.
Design the startup
I've been attending a course/lecture series at Stanford this quarter on 'the ecosystem of design'. It's been very enjoyable and almost always instructive and relevant. I do like the fact that it gets me to 'think different', something that one needs to be reminded about when in heads-down tactical mode.
This week the lecture was by Brenda Laurel, the chair at the graduate school in design at the California College of the Arts. She was entertaining and informative, and I found her perspective particularly interesting as she'd been an entrepreneur and done a couple of startups herself. When she stepped through the design methodology used in her design projects, I was struck by how similar the sequence was to what one goes through when launching a startup:
Though 'design' for many conjures images of cool post-modern shaped everyday kitchen gadgets in the MOMA, the process is still a structured exercise in defining a problem and designing a solution - just like a startup. And it is imperative that design be a part of the process when building that startup. It is a challenge for pre-funded early stage startups that don't have access to high-priced design outfits, but design principles and methodology can be adopted by just about anyone quite successfully to achieve at least a first level of design sense. I've found it helps to get everyone involved in the product to think of themselves as a potential user/customer and that has generated a ton of good ideas - mostly on what not to do. Though it does take a little bending of the mind to get an engineer to think like a designer, it can be lot of fun and the results are more, well, friendly.
This week the lecture was by Brenda Laurel, the chair at the graduate school in design at the California College of the Arts. She was entertaining and informative, and I found her perspective particularly interesting as she'd been an entrepreneur and done a couple of startups herself. When she stepped through the design methodology used in her design projects, I was struck by how similar the sequence was to what one goes through when launching a startup:
- opportunity space
- secondary research
- primary research
- analysis
- findings
- values
- design principles
- design
- change
Though 'design' for many conjures images of cool post-modern shaped everyday kitchen gadgets in the MOMA, the process is still a structured exercise in defining a problem and designing a solution - just like a startup. And it is imperative that design be a part of the process when building that startup. It is a challenge for pre-funded early stage startups that don't have access to high-priced design outfits, but design principles and methodology can be adopted by just about anyone quite successfully to achieve at least a first level of design sense. I've found it helps to get everyone involved in the product to think of themselves as a potential user/customer and that has generated a ton of good ideas - mostly on what not to do. Though it does take a little bending of the mind to get an engineer to think like a designer, it can be lot of fun and the results are more, well, friendly.
Getting down to business
When I'd last written about the team of 10-graders that I'm mentoring on entrepreneurship through BUILD (read my posts here and here), they were re-visiting their business plan as their world-view and team had changed over the summer. They were frantically re-doing their presentation as they had to pitch to a VC (a real one!) in order to get the few hundred dollars of 'seed funds' they would need to get their idea off the ground.
There was a bunch of writing to do - presentations, business plan, even team bios, and these students were stressed as they had to do it all on top of their regular school work (remember, they are in this program because they need all the help they can get to stay in school). My co-mentor and I were dismayed by their lack of enthusiasm - it seemed that they were just going through the motions and had lost their excitement, and we were hoping it would come back.
It sure did! All it took was practicing their 'elevator pitch' while meeting and greeting at a 'mock-tail' party and pitching to a VC who showed real interest and asked relevant questions. The team was floating after the presentation - they were thrilled that they could field questions on pricing and market surveys entirely on their own. And yes, they got their seed funds - this is modeled after the real world, but is a much more sheltered one after all, propped by generous donations.
Now that they're getting down to business, not just creating PowerPoints, the excitement is palpable, and they're very much fired up as in my 'fire in the belly' post. They're nervous, they have tons of questions, but they don't think they can fail - in fact, they believe they have already won, which is the most empowering feeling a teenager could have.
As someone who's cares about education, I'm happy to see how starting a business brings so much to these under-resourced teens: they're motivated to stay in school, they experience supportive relationships with successful adults who care, and they build the confidence they need to aspire to college and get there. As an entrepreneur, I'm thrilled that they're learning the fundamentals of business now and know that they will not be scared to start one if they had a mind to do so in the future. And the fact that I get to participate in this, however minor my role, is the scrumptious icing on the proverbial cake.
There was a bunch of writing to do - presentations, business plan, even team bios, and these students were stressed as they had to do it all on top of their regular school work (remember, they are in this program because they need all the help they can get to stay in school). My co-mentor and I were dismayed by their lack of enthusiasm - it seemed that they were just going through the motions and had lost their excitement, and we were hoping it would come back.
It sure did! All it took was practicing their 'elevator pitch' while meeting and greeting at a 'mock-tail' party and pitching to a VC who showed real interest and asked relevant questions. The team was floating after the presentation - they were thrilled that they could field questions on pricing and market surveys entirely on their own. And yes, they got their seed funds - this is modeled after the real world, but is a much more sheltered one after all, propped by generous donations.
Now that they're getting down to business, not just creating PowerPoints, the excitement is palpable, and they're very much fired up as in my 'fire in the belly' post. They're nervous, they have tons of questions, but they don't think they can fail - in fact, they believe they have already won, which is the most empowering feeling a teenager could have.
As someone who's cares about education, I'm happy to see how starting a business brings so much to these under-resourced teens: they're motivated to stay in school, they experience supportive relationships with successful adults who care, and they build the confidence they need to aspire to college and get there. As an entrepreneur, I'm thrilled that they're learning the fundamentals of business now and know that they will not be scared to start one if they had a mind to do so in the future. And the fact that I get to participate in this, however minor my role, is the scrumptious icing on the proverbial cake.
Dream of sea turtles
Last week I attended a cool gathering - a smallish group of people gathering over wine and munchies not just to network or socialize (that happens anyway), but to hear and discuss stuff outside of the regular work milieu. Kind of like the salons of a past century, but more oriented to ideas and trends than art and philosophy, though that would be cool too.
Last week's topic was 'Strategic Philanthropy' and there was a panel of leaders of different kinds of local successful non-profits. Each of them talked about what they do, why and how they do it, and how they're managing in the bog of the Great Recession. They were all very engaging, and provided fodder for some very interesting post-panel discussions, but I felt that one speech in particular had a strong entrepreneurial appeal and it's message was transferable to just about any endeavor.
Wallace J. Nichols, ('J'), is the director of Ocean Revolution, an international program using creative techniques to preserve our oceans. His was a very well-constructed pitch with high impact - started with a story, outlined a few key take-aways that he elaborated, and ended with audience participation and a very simple call to action with strong emotional appeal. Anyone looking for funds (for or non-profit) could learn from him. What I liked about his speech, was not just the delivery or the message of saving the oceans (a biggie), but his four guidelines for making things happen:
All of these are excellent reminders for any entrepreneur, and I believe the turtle story would be a great one for any young person wondering how to hold on to a dream. The closer was memorable too - J gave a blue marble to everyone in the room and told us that it was a symbol of the earth and to cherish it and pass it on to the next person who would benefit from it. To really understand the spirit behind the blue marbles, I recommend checking out his post here - it's an awesomely simple way to get across a big idea.
Last week's topic was 'Strategic Philanthropy' and there was a panel of leaders of different kinds of local successful non-profits. Each of them talked about what they do, why and how they do it, and how they're managing in the bog of the Great Recession. They were all very engaging, and provided fodder for some very interesting post-panel discussions, but I felt that one speech in particular had a strong entrepreneurial appeal and it's message was transferable to just about any endeavor.
Wallace J. Nichols, ('J'), is the director of Ocean Revolution, an international program using creative techniques to preserve our oceans. His was a very well-constructed pitch with high impact - started with a story, outlined a few key take-aways that he elaborated, and ended with audience participation and a very simple call to action with strong emotional appeal. Anyone looking for funds (for or non-profit) could learn from him. What I liked about his speech, was not just the delivery or the message of saving the oceans (a biggie), but his four guidelines for making things happen:
- Don't be afraid of the unconventional/radical/revolutionary
- Collaborate with others to make things happen
- Build networks actively
- Use networks to spread the word/do the work
All of these are excellent reminders for any entrepreneur, and I believe the turtle story would be a great one for any young person wondering how to hold on to a dream. The closer was memorable too - J gave a blue marble to everyone in the room and told us that it was a symbol of the earth and to cherish it and pass it on to the next person who would benefit from it. To really understand the spirit behind the blue marbles, I recommend checking out his post here - it's an awesomely simple way to get across a big idea.
Opportunities everywhere
This post has two parts: first a really messed up situation where rules collide with reality resulting in an unacceptable outcome and the second is about the opportunity this provides.
Last week there was an article in the San Francisco Chronicle about schools that have had their federal lunch funding withheld due to 'egregious' violations. You can read the whole story here, but here are some of the examples of what appear to be clueless bureaucracy:
The bureaucrats are not evil. They are trying to make sure that there are no abuses like kids being marked as having lunch when they didn't, or being forced in their food choices. All valid goals. And they have chosen the standard method of letting the 'consumer' make the choices and confirm the transaction - except that they forgot that the consumer here could be a distracted and overwhelmed six-year old. It appears that whole school lunch program, especially the free lunches, could be ineffective for older students too. As I have been mentoring teens recently, I learned that the ones who qualify for free lunches often do not want to get them as doing so requires 'special' handling, like picking up cards after an announcement on the PA system. High school is hard enough, and teenagers would rather starve than make their straitened circumstances visible to their peers.
Which brings me to the second part. This is a situation where the solution may benefit from some classic design focus, the kind many entrepreneurs bring to their products. There are many stakeholders here, federal agencies, state agencies, school districts, schools, staff etc., but ultimately there's only one goal - children need to given a healthy lunch. It needs to be such that it's easy and appropriate for the children first, and then one can add on all the accountability, auditability and other requirements to ensure fiscal and operational integrity.
Maybe this is an opportunity for a startup. It is entirely possible, with today's technology, to build something user (read 'kid') friendly, discreet (for the teens) and providing instantaneous and accurate reporting on usage. It could be a money-maker, given the number of schools that need to be served. Of course, it would help if VCs could be persuaded to invest in ventures outside the beaten path, or if someone would step up to some strategic philanthropy or mission-related investing. Most of all, it needs a passionate entrepreneur and a socially-minded one who'd love the idea of making it easier for kids to get lunch. Maybe the solution is already there - that would make a great follow up story.
Last week there was an article in the San Francisco Chronicle about schools that have had their federal lunch funding withheld due to 'egregious' violations. You can read the whole story here, but here are some of the examples of what appear to be clueless bureaucracy:
- No adult is allowed to hand a tray of food to a child, no matter how young the child.
- Teachers cannot handle the students lunch cards, or if they are more wired and have touch screens, they cannot touch the screen for a child, again no matter how young.
The bureaucrats are not evil. They are trying to make sure that there are no abuses like kids being marked as having lunch when they didn't, or being forced in their food choices. All valid goals. And they have chosen the standard method of letting the 'consumer' make the choices and confirm the transaction - except that they forgot that the consumer here could be a distracted and overwhelmed six-year old. It appears that whole school lunch program, especially the free lunches, could be ineffective for older students too. As I have been mentoring teens recently, I learned that the ones who qualify for free lunches often do not want to get them as doing so requires 'special' handling, like picking up cards after an announcement on the PA system. High school is hard enough, and teenagers would rather starve than make their straitened circumstances visible to their peers.
Which brings me to the second part. This is a situation where the solution may benefit from some classic design focus, the kind many entrepreneurs bring to their products. There are many stakeholders here, federal agencies, state agencies, school districts, schools, staff etc., but ultimately there's only one goal - children need to given a healthy lunch. It needs to be such that it's easy and appropriate for the children first, and then one can add on all the accountability, auditability and other requirements to ensure fiscal and operational integrity.
Maybe this is an opportunity for a startup. It is entirely possible, with today's technology, to build something user (read 'kid') friendly, discreet (for the teens) and providing instantaneous and accurate reporting on usage. It could be a money-maker, given the number of schools that need to be served. Of course, it would help if VCs could be persuaded to invest in ventures outside the beaten path, or if someone would step up to some strategic philanthropy or mission-related investing. Most of all, it needs a passionate entrepreneur and a socially-minded one who'd love the idea of making it easier for kids to get lunch. Maybe the solution is already there - that would make a great follow up story.
Entrepreneur idols
A little news item that caught my eye: Junior Achievement conducted a poll among 1000 students between the ages of 12 and 17 and asked them to pick their most admired entrepreneur from a list of famous ones (all US based). And guess what, Steve Jobs was top of the list, way ahead of Oprah!
This poll is both fascinating and frustrating. It is amazing that Steve, nerdy though brilliant, outshone 'traditional' celebrities. He is an entrepreneur (and design genius) who became a celebrity instead of an entertainment celebrity who used his/her fame and fortune to build a business. And even more interesting is the fact that a third felt he made a difference in people's lives and a quarter felt he made the world a better place - and these are among the qualities that they most admired about him. Wealth and fame were way down the list. Steve Jobs as a do-gooder is unusual image for most techies, which leads to one of the frustrating things about this poll: the pre-selected list of entrepreneurs. It would have been interesting to see how Bill Gates would have fared in this poll. Apart from creating the Microsoft behemoth (the 'evil empire' bit is softening a little with competion), Gates continues to help improve the lives of people in a major way - but do teenagers know about it?
You can read about the poll here - there's not much to it, but it raises all kinds of interesting questions about the impact that iPods and iPhones (and maybe Macs too) have had on teens' worldview. But the good news is that JA is focused on teaching entrepreneurship to teens and is one of the handful of organizations (check out this previous post for another one) using business training to boost academic performance. What I find encouraging about all this is that so many teenagers are drawn to entrepreneurship, not just celebrity, which bodes well for more innovation and risk-taking in the future. Who'd have thought that the iPod could inspire so much by being the coolest personal music player ever?
This poll is both fascinating and frustrating. It is amazing that Steve, nerdy though brilliant, outshone 'traditional' celebrities. He is an entrepreneur (and design genius) who became a celebrity instead of an entertainment celebrity who used his/her fame and fortune to build a business. And even more interesting is the fact that a third felt he made a difference in people's lives and a quarter felt he made the world a better place - and these are among the qualities that they most admired about him. Wealth and fame were way down the list. Steve Jobs as a do-gooder is unusual image for most techies, which leads to one of the frustrating things about this poll: the pre-selected list of entrepreneurs. It would have been interesting to see how Bill Gates would have fared in this poll. Apart from creating the Microsoft behemoth (the 'evil empire' bit is softening a little with competion), Gates continues to help improve the lives of people in a major way - but do teenagers know about it?
You can read about the poll here - there's not much to it, but it raises all kinds of interesting questions about the impact that iPods and iPhones (and maybe Macs too) have had on teens' worldview. But the good news is that JA is focused on teaching entrepreneurship to teens and is one of the handful of organizations (check out this previous post for another one) using business training to boost academic performance. What I find encouraging about all this is that so many teenagers are drawn to entrepreneurship, not just celebrity, which bodes well for more innovation and risk-taking in the future. Who'd have thought that the iPod could inspire so much by being the coolest personal music player ever?
Words Shape the Venture
No, it's not the other way about, even though it seem counter-intuitive. Ideally, you should write down your business plan early enough in the game just so you can makes sure that you've answered all the obvious questions and you know there's a business there. You think of your idea, you start to build it (whether it's a product or service) and somewhere along the way, you have to write down what your idea is all about, either to get funding or to market to customers. But apart from the plan, there's the description, often the elevator pitch or one-liner or even the tag line, that you start working on the moment you're ready to talk to other people about your idea and you'll soon find out that these words are more than just 'marketing', they're critical to your business.
First, the very act of trying to describe what your business is about turns out to be a most challenging exercise. It could take you weeks of creating, analyzing and re-creating to come up with something that you believe represents what you are doing. And doing it in clear language takes a little bit more (help from more 'literary' types). Finally it's done and you're excited as you can now build 'a widget that keeps people from losing their marbles'. (Maybe the figurative kind? That would be something.)
So what you have is a nifty way to track marbles, and you think you have a great way to distribute to a large market and make money so you're marching along. And one day, you are putting together a brief summary to send to a business acquaintance who knows someone who is involved in a fund where a partner is super interested in marbles (this is how it often goes). You read your description again and decide that all this time you've been working on the tracking but haven't paid attention to how people would use it. So now you decide you need to focus on the user experience of using the tracking to find the said marbles. Still, it's early enough in the game and it's all good.
And you keep going, and you're reviewing your presentation that you'd be making to a VC soon and the word 'people' hits you. Do you really want to say 'people' which may mean individuals, consumers, or are you really focusing on selling to organizations which may then help people with their marbles? This warrants a sit-down with your team and discussions on which would be the better market, and you decide to focus on individual consumers, especially since your sales and marketing guy assures you that there's not much profit in selling to middle-men. By this time you feel that your team knows exactly what to do and you've laid it all out, and you can confidently answer when the VC asks you 'which people?' or anything else about your product.
You are getting deeper into your business and now you find that there are others out there who are also positioning themselves as having marble trackers like yours and, crushingly, it's not just a startup or two, but a big gun (or two) with the means to take you out before you get established. Since you're a true entrepreneur, you don't just throw up your hands in despair, but you go back to the fundamentals and look at what you set out to do: provide a widget that keeps people from losing their marbles. And the bells clang in your head - your differentiator is in 'keep from losing' - you're not just going to track marbles and help find them once lost, you are going to keep people from losing them in the first place. Maybe that would take not only a widget, but a service, but your team thinks that's great because the big guns aren't going to bother with that and would leave the field to you and the other smaller fry. And as an added bonus, you now have a new exit strategy as maybe one of those abundantly sized guns could buy you out in the future.
Articulating your business and vision in clear terms is critical, not only for selling it to others, but to keep you and your team on track by providing a solid touchstone for every strategic decision you have to make. Not to mention, it may keep you from losing your marbles!
First, the very act of trying to describe what your business is about turns out to be a most challenging exercise. It could take you weeks of creating, analyzing and re-creating to come up with something that you believe represents what you are doing. And doing it in clear language takes a little bit more (help from more 'literary' types). Finally it's done and you're excited as you can now build 'a widget that keeps people from losing their marbles'. (Maybe the figurative kind? That would be something.)
So what you have is a nifty way to track marbles, and you think you have a great way to distribute to a large market and make money so you're marching along. And one day, you are putting together a brief summary to send to a business acquaintance who knows someone who is involved in a fund where a partner is super interested in marbles (this is how it often goes). You read your description again and decide that all this time you've been working on the tracking but haven't paid attention to how people would use it. So now you decide you need to focus on the user experience of using the tracking to find the said marbles. Still, it's early enough in the game and it's all good.
And you keep going, and you're reviewing your presentation that you'd be making to a VC soon and the word 'people' hits you. Do you really want to say 'people' which may mean individuals, consumers, or are you really focusing on selling to organizations which may then help people with their marbles? This warrants a sit-down with your team and discussions on which would be the better market, and you decide to focus on individual consumers, especially since your sales and marketing guy assures you that there's not much profit in selling to middle-men. By this time you feel that your team knows exactly what to do and you've laid it all out, and you can confidently answer when the VC asks you 'which people?' or anything else about your product.
You are getting deeper into your business and now you find that there are others out there who are also positioning themselves as having marble trackers like yours and, crushingly, it's not just a startup or two, but a big gun (or two) with the means to take you out before you get established. Since you're a true entrepreneur, you don't just throw up your hands in despair, but you go back to the fundamentals and look at what you set out to do: provide a widget that keeps people from losing their marbles. And the bells clang in your head - your differentiator is in 'keep from losing' - you're not just going to track marbles and help find them once lost, you are going to keep people from losing them in the first place. Maybe that would take not only a widget, but a service, but your team thinks that's great because the big guns aren't going to bother with that and would leave the field to you and the other smaller fry. And as an added bonus, you now have a new exit strategy as maybe one of those abundantly sized guns could buy you out in the future.
Articulating your business and vision in clear terms is critical, not only for selling it to others, but to keep you and your team on track by providing a solid touchstone for every strategic decision you have to make. Not to mention, it may keep you from losing your marbles!
Beyond the business plan
A few months ago, I'd written a post about the team of teens I was mentoring in presenting their business plan. A quick recap: these are under-resourced high-school students who get substantial support and guidance in making it to college, along with hands-on lessons in entrepreneurship. They're supported by the non-profit BUILD and you can read my previous posts on these teen entrepreneurs here and here. Those 9th-graders have now moved on to 10-grade and have opted to continue with their business idea (and more importantly, high-school - yeah!) and I'm back to mentoring them in their trek from plan to product and having a lot of fun in the process.
So, we're picking up where we left off before summer started - the team had pitched their idea (personalized clip-on charms - no IP to protect here), their differentiators and their business plan, and it all looked viable, so come fall, they were green-lighted to start their business as long as they kept up their academic commitments. But, the three months between summer and fall is a long time in the life of a teenager, and many things changed. Most dramatically, the team's CFO and CMO dropped out of the program and the rest of them were not confident about the product/process anymore.
Surprisingly, this did not cause them to doubt their ability to start their company. A while ago, I'd written about how startups have to be flexible to survive ('The Adaptive Startup') and it is so refreshing to see how these teens are re-shuffling their plans with alacrity. They are not stuck on their old plans and show no inertia or resistance to change. They got two more kids to join their team, reassigned roles, got inspired by one of the newcomers' football charm and are re-doing their 'manufacturing' plans. My co-mentor and I are amazed at how quickly they dropped the one-off, custom-everything approach they were leaning towards when they figured out how much time (and money) that would take and are now measuring everything on a feasibility scale. They're energetically trying to balance practicality with coolness (essential to teendom) and us mentors cheered (silently) when they dropped the idea of buying their own $1000 metal engraver in favor of outsourcing but kept their original designs. Another familiar startup lesson here - focus on your value-add and get others to do the routine/commodity stuff.
As these teens are reminding us, life, and startups, can be unpredictable, and resilience and adaptability seem to trump conformance and control in bringing success - and satisfaction.
So, we're picking up where we left off before summer started - the team had pitched their idea (personalized clip-on charms - no IP to protect here), their differentiators and their business plan, and it all looked viable, so come fall, they were green-lighted to start their business as long as they kept up their academic commitments. But, the three months between summer and fall is a long time in the life of a teenager, and many things changed. Most dramatically, the team's CFO and CMO dropped out of the program and the rest of them were not confident about the product/process anymore.
Surprisingly, this did not cause them to doubt their ability to start their company. A while ago, I'd written about how startups have to be flexible to survive ('The Adaptive Startup') and it is so refreshing to see how these teens are re-shuffling their plans with alacrity. They are not stuck on their old plans and show no inertia or resistance to change. They got two more kids to join their team, reassigned roles, got inspired by one of the newcomers' football charm and are re-doing their 'manufacturing' plans. My co-mentor and I are amazed at how quickly they dropped the one-off, custom-everything approach they were leaning towards when they figured out how much time (and money) that would take and are now measuring everything on a feasibility scale. They're energetically trying to balance practicality with coolness (essential to teendom) and us mentors cheered (silently) when they dropped the idea of buying their own $1000 metal engraver in favor of outsourcing but kept their original designs. Another familiar startup lesson here - focus on your value-add and get others to do the routine/commodity stuff.
As these teens are reminding us, life, and startups, can be unpredictable, and resilience and adaptability seem to trump conformance and control in bringing success - and satisfaction.
Dealing with deafening silence
The previous post was all about asking - the entrepreneur shouldn't be afraid to ask for suggestions, resources, contacts, office space and the ever-important funding. You can expect different responses of course, and maybe I'll cover them another time, but this post is all about a specific response: silence.
It was only after I started a company that I found out that many people seem to believe silence is an acceptable response in the business world. It's perfectly understandable as a go-to solution for invitations from people you want to avoid, especially when you're thirteen years old and haven't got the art of the white-lie down yet ("I'm washing my hair and it's a personal religious ritual"). And I am eternally grateful I can 'ignore' any number of requests and invitations on Facebook - I mean, actively getting a sense of closure by clicking 'ignore' instead of just sighing and looking away. No, this is not about silence as a avoidance technique in awkward social situations, where it definitely has a respected place.
In the startup world, silence as an answer seems ever so common. So you are introduced to a potential investor who wants your exec summary, your PowerPoint stack and maybe even a meeting. And possibly follow up emails asking probing questions on marketing plans and competitive pressures. All good. You're excited that there's so much interest and have kept pace, changing your pitch to answer the questions and doing rapid research to back up your claims. You think that even if there's no investment you'll find out what you need to improve, after all, you've been in almost twice daily contact if you count the emails. And then - nothing. A week passes. You give the investor the benefit of the doubt - he's busy, she's traveling, they have an offsite retreat. So you send an upbeat email, carefully worded not to sound desperate, and yet inviting a hit on the reply button. Still nothing. You wait another week and send another 'anything else I can do?' message. Nada. Depending on your fortitude, you could keep up the 'ping! remember me? what do you think?' one-sided messaging going on for quite a while.
This doesn't happen just when asking for money. You are introduced to a great customer referral and after the initial enthusiasm of demos and deep-dives, it all fizzles out. Or the candidate who thinks yours is the best company in the world who disappears in the middle of the interview cycle. It could even be the independent contractor who's dependably provided you with services (and been dependably paid by you) for a long time who seems to have gone off the grid and doesn't reply to your latest project request.
That's it. You don't get a 'No, not interested'. Or even a qualified 'Not right now'. Just silence. So what do you think/feel/do? First, don't take it personally. Or then again, do - in a good way. Use this to improve your own follow up and closing the loop track record. If you look back at your own actions, there must be someone you just plain forgot to respond to, even though you intended to follow up. It happens to everyone. Which is why it is perfectly OK to send a reminder or two - understanding, not accusatory, ones. And if that doesn't work, you should realize it's not about forgetting, but mostly about not knowing how to say 'no' gracefully and professionally without closing any doors. You could indulge in rants from "B-schools don't teach business etiquette" to creative name-calling, but that's not going to get you anything except heartburn. If you check out TheFunded.com you'll find many entrepreneurs who give props to VCs who reject their pitch quickly and cleanly, and it is likely this kind of feedback would have an impact - in the investor circles at least. So, if the reminders still elicit silence, it's time to stop reaching out. It's not about angrily deleting the 'silent ones' from your contact list - but instead adding them to the distribution list for your newsletter, or blog or other cheery updates about your business. Maybe they will click on one of these some day, see how you're doing, and get back in touch with you. After all, they never said 'No' and you know better than to close any doors.
It was only after I started a company that I found out that many people seem to believe silence is an acceptable response in the business world. It's perfectly understandable as a go-to solution for invitations from people you want to avoid, especially when you're thirteen years old and haven't got the art of the white-lie down yet ("I'm washing my hair and it's a personal religious ritual"). And I am eternally grateful I can 'ignore' any number of requests and invitations on Facebook - I mean, actively getting a sense of closure by clicking 'ignore' instead of just sighing and looking away. No, this is not about silence as a avoidance technique in awkward social situations, where it definitely has a respected place.
In the startup world, silence as an answer seems ever so common. So you are introduced to a potential investor who wants your exec summary, your PowerPoint stack and maybe even a meeting. And possibly follow up emails asking probing questions on marketing plans and competitive pressures. All good. You're excited that there's so much interest and have kept pace, changing your pitch to answer the questions and doing rapid research to back up your claims. You think that even if there's no investment you'll find out what you need to improve, after all, you've been in almost twice daily contact if you count the emails. And then - nothing. A week passes. You give the investor the benefit of the doubt - he's busy, she's traveling, they have an offsite retreat. So you send an upbeat email, carefully worded not to sound desperate, and yet inviting a hit on the reply button. Still nothing. You wait another week and send another 'anything else I can do?' message. Nada. Depending on your fortitude, you could keep up the 'ping! remember me? what do you think?' one-sided messaging going on for quite a while.
This doesn't happen just when asking for money. You are introduced to a great customer referral and after the initial enthusiasm of demos and deep-dives, it all fizzles out. Or the candidate who thinks yours is the best company in the world who disappears in the middle of the interview cycle. It could even be the independent contractor who's dependably provided you with services (and been dependably paid by you) for a long time who seems to have gone off the grid and doesn't reply to your latest project request.
That's it. You don't get a 'No, not interested'. Or even a qualified 'Not right now'. Just silence. So what do you think/feel/do? First, don't take it personally. Or then again, do - in a good way. Use this to improve your own follow up and closing the loop track record. If you look back at your own actions, there must be someone you just plain forgot to respond to, even though you intended to follow up. It happens to everyone. Which is why it is perfectly OK to send a reminder or two - understanding, not accusatory, ones. And if that doesn't work, you should realize it's not about forgetting, but mostly about not knowing how to say 'no' gracefully and professionally without closing any doors. You could indulge in rants from "B-schools don't teach business etiquette" to creative name-calling, but that's not going to get you anything except heartburn. If you check out TheFunded.com you'll find many entrepreneurs who give props to VCs who reject their pitch quickly and cleanly, and it is likely this kind of feedback would have an impact - in the investor circles at least. So, if the reminders still elicit silence, it's time to stop reaching out. It's not about angrily deleting the 'silent ones' from your contact list - but instead adding them to the distribution list for your newsletter, or blog or other cheery updates about your business. Maybe they will click on one of these some day, see how you're doing, and get back in touch with you. After all, they never said 'No' and you know better than to close any doors.
Ask away
Entrepreneurs need to be comfortable doing all kinds of things, selling, managing (firing) etc., but one of the most important is asking. Last weekend I’d gone with my family to Gualala, a charming little town on the northern California coast, and we drove into town to have dinner and pick up a few groceries. This is a really a tiny town and we thought we’d have dinner first before the restaurants closed. There was one casual cafe, Trinks, that was supposedly closing in three minutes, but they offered to stay open and serve us dinner – which was super nice of them (more small town charm!). When I got the check I asked the waitress how long the grocery stores would be open and she said that they were all closed. We needed only two things desperately, a little milk to lighten the morning tea and a little butter for the morning toast (we already had the tea and bread), so I asked if I could have a bit of both. The waitress was helpful and cheerful as she had been all through dinner and gave me a couple of packets of butter and some milk in a to-go cup – and in return, I gave her a big tip as the tea/toast picture for the next morning had brightened.
So I step outside with the butter and milk and my family is collapsing with laughter at my asking for these ‘odd things’ from a restaurant. Eh, I said, it’s no big deal. After more chortling, they decided that’s why I could be an entrepreneur – I didn’t mind asking for things from anyone anywhere.
There's some truth to that. Entrepreneurs have to ask – for money, for resources, for team members, for references, and so on. I can assure you it doesn’t come naturally to everyone though. There are some who breeze along never having any difficulties with the ‘ask’. But way too many people are reluctant to ask for any number of reasons ranging from ‘I don’t know this person’ to ‘what if they say no?’. Really. What if? Many of us - by the way, I think more women then men have ‘askophohia’ - in our training to be well-mannered, have jettisoned the art of the ask.
But for an entrepreneur the end result of growing a successful venture should overcome any qualms about getting turned down, ‘looking funny’ or, even more likely, the perception that you’re giving up power by asking for something. So it is imperative that s/he gets comfortable with the fact that asking is pretty much the surest way to getting. And a ‘no’ is not life-ending. Three things that have helped me side-step mis-guided manners: keeping the goal in mind, knowing that most people are reasonable and open, and watching other successful people ask with ease and comfort. You can’t build a business if you’re uncomfortable asking. Doing it nicely helps of course, so ask away – even Miss. Manners would approve.
So I step outside with the butter and milk and my family is collapsing with laughter at my asking for these ‘odd things’ from a restaurant. Eh, I said, it’s no big deal. After more chortling, they decided that’s why I could be an entrepreneur – I didn’t mind asking for things from anyone anywhere.
There's some truth to that. Entrepreneurs have to ask – for money, for resources, for team members, for references, and so on. I can assure you it doesn’t come naturally to everyone though. There are some who breeze along never having any difficulties with the ‘ask’. But way too many people are reluctant to ask for any number of reasons ranging from ‘I don’t know this person’ to ‘what if they say no?’. Really. What if? Many of us - by the way, I think more women then men have ‘askophohia’ - in our training to be well-mannered, have jettisoned the art of the ask.
But for an entrepreneur the end result of growing a successful venture should overcome any qualms about getting turned down, ‘looking funny’ or, even more likely, the perception that you’re giving up power by asking for something. So it is imperative that s/he gets comfortable with the fact that asking is pretty much the surest way to getting. And a ‘no’ is not life-ending. Three things that have helped me side-step mis-guided manners: keeping the goal in mind, knowing that most people are reasonable and open, and watching other successful people ask with ease and comfort. You can’t build a business if you’re uncomfortable asking. Doing it nicely helps of course, so ask away – even Miss. Manners would approve.
Believers needed
Belief sells. If you think that what you're selling is the hottest thing since sliced bread (now, that's a sales job! does bread need to be pre-sliced?) you're much more likely to convince everyone else that is exactly so. No room for quibbling or diffidence when collecting converts.
I was reminded of this when I read about how Mozilla's Firefox recently reached it's one-billionth download. Keep in mind that Microsoft Internet Explorer was the browser when Firefox came out. But scores of the Firefox faithful took it on themselves to spread the word and stuck with it until it gained momentum and snowballed on its own. While a good (preferably great) product is necessary for good sales, it is not sufficient. You need to evangelize, exalt, exhort and extol with passion and dedication to get others to think, better yet, to believe, that your product is the best for them. Even the free stuff, like Firefox, needs a movement to get market share.
On the surface, Firefox may not seem to be the right story for an entrepreneur - no big exit, open source, etc. etc. But it is an encouraging, even inspiring, story of a grass roots campaign by a veritable army of believers which enabled it to get established in the market and grow to an amazing 31% market share competing with IE, the proverbial 800 lb gorilla in the space. The story outlines an interesting marketing tactic and has good lessons, especially for web apps seeking vast audiences. Firefox is still my favorite browser and I look forward to its continued success and am happy to share the RWW post here.
I was reminded of this when I read about how Mozilla's Firefox recently reached it's one-billionth download. Keep in mind that Microsoft Internet Explorer was the browser when Firefox came out. But scores of the Firefox faithful took it on themselves to spread the word and stuck with it until it gained momentum and snowballed on its own. While a good (preferably great) product is necessary for good sales, it is not sufficient. You need to evangelize, exalt, exhort and extol with passion and dedication to get others to think, better yet, to believe, that your product is the best for them. Even the free stuff, like Firefox, needs a movement to get market share.
On the surface, Firefox may not seem to be the right story for an entrepreneur - no big exit, open source, etc. etc. But it is an encouraging, even inspiring, story of a grass roots campaign by a veritable army of believers which enabled it to get established in the market and grow to an amazing 31% market share competing with IE, the proverbial 800 lb gorilla in the space. The story outlines an interesting marketing tactic and has good lessons, especially for web apps seeking vast audiences. Firefox is still my favorite browser and I look forward to its continued success and am happy to share the RWW post here.
Field of expertise
ReadWriteWeb has a continuing series on startups and entrepreneurs which makes for good reading, especially if you're interested in tech startups. A while ago they had a post on 10 things to be clear about before you start a company - and I thought of it today as I was thinking about a startup idea (just for fun). All 10 points are worth considering, but I'm not convinced that everything is as clear cut as it is made out to be. In particular, I have a somewhat different take on #3, does your venture involve something you understand really well?
On the face of it, it makes sense. You can't do what you don't know. Mrs. Fields had wowed friends and family with her cookies before starting her company. Thomas Fogarty is a cardiac surgeon and knew exactly what he was about when he created the balloon catheter and then went on to launch numerous medical device companies. And he also built a successful winery, a far cry from medical devices (though red wine is supposed to be good for your heart). My friend Gillian Verga was inspired by her own weight-loss experience to start an online community in WeightCircles. So does the entrepreneur always have to be the subject matter expert? Or just know enough to know when to bring in the experts? And what is 'enough'?
I am personally partial to the idea of an entrepreneur being one who sees an opportunity and pulls together the resources to grab it. The entrepreneur does not have to be, and is often not, the one who knows it all about the specific area - too often an expert does not see the proverbial forest for the proverbial trees - but obviously s/he has to know enough to figure out what's a real opportunity, the challenges, the market etc. You the entrepreneur need to know enough to figure out if there's a business there. And of course you need access to the people who are masters of that domain so you can get the smarts you need when you need them.
That said, I also believe that any half-way decent entrepreneur would be at least familiar with what their venture is all about. You have to know the problem you want to solve, either having experienced it yourself or being close up to some one who has. In fact, I don't think it is even feasible to develop an entrepreneurial opportunity unless you're familiar with - not necessarily immersed in - a space. The sequence is pretty much: see the opportunity in something close to you, dig in and get comfortable that there's really a venture there, get access to the market, take the leap.
And finally, unavoidably, you need passion. If you are not passionate about the space you are in, expertise alone won't keep you in the game. You'd be inclined to give up the first time you believe you're running out of money and use your expertise to polish up your resume instead. And passion can be used to direct your entrepreneurial itch too. If you're really interested in an area (global warming, education, health care) but don't know too much about it, you can spend some time getting familiar with it - taking classes, volunteering, networking, mining the web. And then, you'll either find your own 'eureka' idea or hitch yourself to someone else's. Bottom line, that has to be the holy grail: making an impact in something you really care about.
On the face of it, it makes sense. You can't do what you don't know. Mrs. Fields had wowed friends and family with her cookies before starting her company. Thomas Fogarty is a cardiac surgeon and knew exactly what he was about when he created the balloon catheter and then went on to launch numerous medical device companies. And he also built a successful winery, a far cry from medical devices (though red wine is supposed to be good for your heart). My friend Gillian Verga was inspired by her own weight-loss experience to start an online community in WeightCircles. So does the entrepreneur always have to be the subject matter expert? Or just know enough to know when to bring in the experts? And what is 'enough'?
I am personally partial to the idea of an entrepreneur being one who sees an opportunity and pulls together the resources to grab it. The entrepreneur does not have to be, and is often not, the one who knows it all about the specific area - too often an expert does not see the proverbial forest for the proverbial trees - but obviously s/he has to know enough to figure out what's a real opportunity, the challenges, the market etc. You the entrepreneur need to know enough to figure out if there's a business there. And of course you need access to the people who are masters of that domain so you can get the smarts you need when you need them.
That said, I also believe that any half-way decent entrepreneur would be at least familiar with what their venture is all about. You have to know the problem you want to solve, either having experienced it yourself or being close up to some one who has. In fact, I don't think it is even feasible to develop an entrepreneurial opportunity unless you're familiar with - not necessarily immersed in - a space. The sequence is pretty much: see the opportunity in something close to you, dig in and get comfortable that there's really a venture there, get access to the market, take the leap.
And finally, unavoidably, you need passion. If you are not passionate about the space you are in, expertise alone won't keep you in the game. You'd be inclined to give up the first time you believe you're running out of money and use your expertise to polish up your resume instead. And passion can be used to direct your entrepreneurial itch too. If you're really interested in an area (global warming, education, health care) but don't know too much about it, you can spend some time getting familiar with it - taking classes, volunteering, networking, mining the web. And then, you'll either find your own 'eureka' idea or hitch yourself to someone else's. Bottom line, that has to be the holy grail: making an impact in something you really care about.
A sign of the times?
A few months ago I had written a hopeful (as in, full of hope) post about three different people who had talked to me about the startup dreams and plans (you can read it here). I followed up with those entrepreneur-hopefuls and found that everything has changed.
The first was a senior level manager in a small but thriving company who wanted to work on something more personally fulfilling (while making money of course) and had thought she'd landed on just the right thing. At that time she was trying to figure out whether she should quit her job to work on her idea right away or do it part-time. Fast forward to now. She's not only still in her old job, but because of the economy and cut-backs all around, she has to do more with less and hasn't had time to even think about her idea, a fact that bothers her to the point that she prefers not to dwell on it.
The second person was in a very large multi-national with a very useful app that she had helped develop and was trying to launch as a separate venture with her company's support. It is no surprise that the budgets right now don't have much slack for something new, especially if it is not core R&D, so it's back to business as usual.
Lastly the two young men with startup fever spent many weeks going through dozens of ideas, building mini-plans for each before rejecting them. One of them gave up and decided to opt for a dependable paycheck (he'd recently gotten married). The other looking for a like-minded partner found that all his friends who'd wanted to do something on their own had decided to go the corporate route. So, he's put his entrepreneurial dreams on ice too and is looking for a job, preferably in a small funded startup.
Is it the economy that caused them to forget their dreams? Of course, summer of 2009 is in economic doldrums with glimmers of improvement but nothing you can bet your business on. It is very hard to find the fuel to power startups: angel investors, early-stage VCs, early-adopter customers or consumers with healthy discretionary spending. But, it is not impossible. I do believe that an entrepreneur who's truly passionate will figure out a way to keep the idea alive, even if it's just a few hours on nights and weekends working on plans, doing market research, scouting for co-founders - something that will keep the venture simmering slowly on a side-burner and out of the deep-freeze. It's not easy (startups are never easy) and I recommend that entrepreneurs who want to survive these times to remember Steve Jobs' famous exhortation to 'stay hungry, stay foolish' - dreams die only if you let them.
The first was a senior level manager in a small but thriving company who wanted to work on something more personally fulfilling (while making money of course) and had thought she'd landed on just the right thing. At that time she was trying to figure out whether she should quit her job to work on her idea right away or do it part-time. Fast forward to now. She's not only still in her old job, but because of the economy and cut-backs all around, she has to do more with less and hasn't had time to even think about her idea, a fact that bothers her to the point that she prefers not to dwell on it.
The second person was in a very large multi-national with a very useful app that she had helped develop and was trying to launch as a separate venture with her company's support. It is no surprise that the budgets right now don't have much slack for something new, especially if it is not core R&D, so it's back to business as usual.
Lastly the two young men with startup fever spent many weeks going through dozens of ideas, building mini-plans for each before rejecting them. One of them gave up and decided to opt for a dependable paycheck (he'd recently gotten married). The other looking for a like-minded partner found that all his friends who'd wanted to do something on their own had decided to go the corporate route. So, he's put his entrepreneurial dreams on ice too and is looking for a job, preferably in a small funded startup.
Is it the economy that caused them to forget their dreams? Of course, summer of 2009 is in economic doldrums with glimmers of improvement but nothing you can bet your business on. It is very hard to find the fuel to power startups: angel investors, early-stage VCs, early-adopter customers or consumers with healthy discretionary spending. But, it is not impossible. I do believe that an entrepreneur who's truly passionate will figure out a way to keep the idea alive, even if it's just a few hours on nights and weekends working on plans, doing market research, scouting for co-founders - something that will keep the venture simmering slowly on a side-burner and out of the deep-freeze. It's not easy (startups are never easy) and I recommend that entrepreneurs who want to survive these times to remember Steve Jobs' famous exhortation to 'stay hungry, stay foolish' - dreams die only if you let them.
Can you be an entrepreneur?
Yes, this is a slightly different take on the 'are you an entrepreneur?' question that I'd touched on in an early post (one thing about blogs, you can write on the same topic a zillion times if you feel like it). I was inspired to revisit this by a recent post of Readwriteweb titled 'are you really an entrepreneur?', mainly because I feel it didn't cover some key points.
The list mentions good health as a requirement for an entrepreneur, and sure it helps, yes, but I've known many an entrepreneur who soldiered on with various and sundry ailments. Determination is what drives the entrepreneur. I also disagree with the requirement to have a unique service or product. Uniqueness is not as important as having something that the market you intend to reach needs or can be convinced it needs - in the way you're planning to deliver it.
The list includes 'willing to make short term sacrifices for long term success', referring to others questioning your sanity. I believe entrepreneurs often have to make choices that are not friendly to their families or acceptable to their friends, which may be why many pundits believe that single, unattached people are more likely to succeed in (read: stick with) entrepreneurship. (An aside: investors like families and other trappings of security in the founders though.) While I personally know of moms who juggled startups and babies and and young guys founding companies when they have just started a relationship, divorces and breakups seem to be common. An entrepreneur can have a stable solid relationship, but it's defnitely not the norm.
Most of all, I was surprised that the list didn't include passion. An entrepreneur is nothing if not passionate about his/her venture. It is hard to create excitement and draw team members, investors and customers to your idea if your passion and enthusiasm don't shine through. You need commitment, dedication, focus, stick-with-it-ness, and the willingness to give up security and comfort for the sake of your dream, all of which means you are passionately convinced that your startup is the right thing for you - make it the only thing for you.
The list mentions good health as a requirement for an entrepreneur, and sure it helps, yes, but I've known many an entrepreneur who soldiered on with various and sundry ailments. Determination is what drives the entrepreneur. I also disagree with the requirement to have a unique service or product. Uniqueness is not as important as having something that the market you intend to reach needs or can be convinced it needs - in the way you're planning to deliver it.
The list includes 'willing to make short term sacrifices for long term success', referring to others questioning your sanity. I believe entrepreneurs often have to make choices that are not friendly to their families or acceptable to their friends, which may be why many pundits believe that single, unattached people are more likely to succeed in (read: stick with) entrepreneurship. (An aside: investors like families and other trappings of security in the founders though.) While I personally know of moms who juggled startups and babies and and young guys founding companies when they have just started a relationship, divorces and breakups seem to be common. An entrepreneur can have a stable solid relationship, but it's defnitely not the norm.
Most of all, I was surprised that the list didn't include passion. An entrepreneur is nothing if not passionate about his/her venture. It is hard to create excitement and draw team members, investors and customers to your idea if your passion and enthusiasm don't shine through. You need commitment, dedication, focus, stick-with-it-ness, and the willingness to give up security and comfort for the sake of your dream, all of which means you are passionately convinced that your startup is the right thing for you - make it the only thing for you.
Substance and style
Last Saturday was the final business plan competition for the high-school freshmen in the BUILD program (the Peninsula site). It was a gorgeous day at the Stanford Graduate School of Business. And it was smart thinking on BUILD's part, and generous of GSB, to get these kids, most of whose parents haven't even finished school, to visit one of the world's best universities - the kids in my car kept up a steady 'wow, this is so cool!' from the moment we turned into Palm Drive.
The team I was mentoring won points on their clever, viable, idea, their comprehensive presentation and how they had figured out all the necessary details. But, the team was made up mostly soft-spoken, diffident kids and there was no obvious spokesperson who could sell. So, ultimately the team didn't make it to the final round since they couldn't 'talk it up'.
In the final round, the two top contenders had some things in common: smooth-talking CEOs who turned on the charm in introducing the problem and solution through a snazzy Powerpoint, and enthusiastic teams to back them up. One really wowed the crowd with frequent jokes and elicited much excitement among the audience of classmates, mentors, teachers and family. The other team had a couple of jokes, but would have clearly lagged behind in the applause meter. On the other hand, they were the team with a working prototype, a detailed market survey and a believable plan for market expansion. Given the fact that the panel of judges included CEOs and senior executives, it was no surprise that the team with more substance won out over the team with more style.
Of course, these 9-th graders didn't really have the opportunity to form their own teams, and the teams were not evenly balanced on competence and charisma, yet they were remarkably easy-going and accepting, in fact, celebratory, of their classmates' success. But all of them learned a lesson that's critical to any startup team making a pitch: what you say is as important as how you say it. And passion is a key element in the 'how' - if you don't show overwhelming enthusiasm for your idea, you can't expect anyone else to buy it.
It may sound corny, but there were no losing teams in this competition. The goal of the program is to build self-confidence and develop skills that help in business as well as school and make college real for kids who grow up thinking that it is out of their reach. I could see the difference: the kids who were nervous speaking to anyone they didn't know last fall, now got up and made a great presentation. They spoke with confidence and answered questions without faltering. (Note to BUILD folks: remind judges to drop bizspeak like 'did you factor the cyclical nature of the demand in forecasting sales' for the much-easier-to-understand 'do you sell the same number every month of the year'). On the way home our team was pumped: they were talking about colleges they'd like to go to and how they should start their business anyway, even if they'd didn't win the competition, as they think all their friends would love to buy their product - and oh, by the way, would it help them get into college? Hats off to BUILD for involving the community and bringing entrepreneurship to help in education - as mentors, we felt really good that we had a small part in bringing about this transformation, and I personally enjoyed getting a fresh perspective on teens and startups!
The team I was mentoring won points on their clever, viable, idea, their comprehensive presentation and how they had figured out all the necessary details. But, the team was made up mostly soft-spoken, diffident kids and there was no obvious spokesperson who could sell. So, ultimately the team didn't make it to the final round since they couldn't 'talk it up'.
In the final round, the two top contenders had some things in common: smooth-talking CEOs who turned on the charm in introducing the problem and solution through a snazzy Powerpoint, and enthusiastic teams to back them up. One really wowed the crowd with frequent jokes and elicited much excitement among the audience of classmates, mentors, teachers and family. The other team had a couple of jokes, but would have clearly lagged behind in the applause meter. On the other hand, they were the team with a working prototype, a detailed market survey and a believable plan for market expansion. Given the fact that the panel of judges included CEOs and senior executives, it was no surprise that the team with more substance won out over the team with more style.
Of course, these 9-th graders didn't really have the opportunity to form their own teams, and the teams were not evenly balanced on competence and charisma, yet they were remarkably easy-going and accepting, in fact, celebratory, of their classmates' success. But all of them learned a lesson that's critical to any startup team making a pitch: what you say is as important as how you say it. And passion is a key element in the 'how' - if you don't show overwhelming enthusiasm for your idea, you can't expect anyone else to buy it.
It may sound corny, but there were no losing teams in this competition. The goal of the program is to build self-confidence and develop skills that help in business as well as school and make college real for kids who grow up thinking that it is out of their reach. I could see the difference: the kids who were nervous speaking to anyone they didn't know last fall, now got up and made a great presentation. They spoke with confidence and answered questions without faltering. (Note to BUILD folks: remind judges to drop bizspeak like 'did you factor the cyclical nature of the demand in forecasting sales' for the much-easier-to-understand 'do you sell the same number every month of the year'). On the way home our team was pumped: they were talking about colleges they'd like to go to and how they should start their business anyway, even if they'd didn't win the competition, as they think all their friends would love to buy their product - and oh, by the way, would it help them get into college? Hats off to BUILD for involving the community and bringing entrepreneurship to help in education - as mentors, we felt really good that we had a small part in bringing about this transformation, and I personally enjoyed getting a fresh perspective on teens and startups!
It pays to practice
Last week the BUILD team of teens that I mentor had their penultimate business plan presentation. This was the team that had won the last time, so they were pretty pumped up. But, this time they didn't win - and I must say wasn't surprised. We got to see this team in comparison with teams from other schools, and I guess it's somewhat similar to VCs seeing a bunch of startups pitching to them. You've really only got one shot at it and you've not only got to be great, you've got to beat the competition, which is made up of other great teams.
BUILD does an excellent job of simulating the entrepreneurial world while keeping it within the grasp of the teen mindset. So there's a panel of judges (all adult) who're coached on what to look for, but there's also the huge subjective factor of whether a judge just plain likes the team and their presentation. Again, this is pretty much what all 'for-real' entrepreneurs face when making presentations - you've got to cover all the business basics, but the investor has to want to work with you and that could be affected by everything from the way you dress to the way your team answers questions.
Last week's loss had a couple of great lessons that apply to all entrepreneurs. The #1 lesson was 'practice'. The team had a few changes to their slides and didn't do a dry run. In fact, two minutes before they were up they turned to us and said 'we don't who's speaking when!' as every one of their 'exec team' had some slides to cover. Granted they had other things like classes and homework to deal with, but every other team was in the same boat and the fact that they didn't put in the extra hour showed as they stumbled through the transitions and gave contradictory answers - though they were quick to recover. Practicing your presentation is super important, particularly for funding (and sales) presentations, but it is very easy for people with experience to think they can handle it as they've done it before. The key here is that you may have done it before, but you and your team may not have done it before - together. I have personally experienced this. One time, my team and I worked on the slides together and knew who was presenting what, but we didn't do a practice run together - mostly because we were experienced and I was (mistakenly) thinking I'd avoid the role of a micro-manager by forcing a dry run when we were hard-pressed for time. Instead, I found myself chiming in even when it wasn't my turn to speak because my team member's ad-libbing, outside the points on the slides, was not always in sync with our overall message. It proved that we were articulate and could think on our feet, but it also showed that we weren't prepared - thankfully it was a friendly group and we weren't demolished.
The other important point is the attitude. Our teen team had one faux-pas when talking about why they would be successful (again, ad-libbing) and made a statement prefaced with 'no offence'. It was mild and raised a laugh and was not a deal-breaker, but it may have gone the wrong way on the subjective factor with some judges. Judges, as well as investors and customers, are funny that way - they want the team to show confidence, but not arrogance, and there's a clear difference. Confidence appears to be based on what you have done and what you have learned, arrogance is based on who you are.
But it was all good and a great learning experience for all of us. The winning team, in my opinion, won not only because of the smooth delivery of their presentation, but because they presented themselves as a well-knit team - another lesson for all startups. And a good rule of thumb - don't ever say anything during your pitch that requires 'no offence' before it, unless you're talking football.
BUILD does an excellent job of simulating the entrepreneurial world while keeping it within the grasp of the teen mindset. So there's a panel of judges (all adult) who're coached on what to look for, but there's also the huge subjective factor of whether a judge just plain likes the team and their presentation. Again, this is pretty much what all 'for-real' entrepreneurs face when making presentations - you've got to cover all the business basics, but the investor has to want to work with you and that could be affected by everything from the way you dress to the way your team answers questions.
Last week's loss had a couple of great lessons that apply to all entrepreneurs. The #1 lesson was 'practice'. The team had a few changes to their slides and didn't do a dry run. In fact, two minutes before they were up they turned to us and said 'we don't who's speaking when!' as every one of their 'exec team' had some slides to cover. Granted they had other things like classes and homework to deal with, but every other team was in the same boat and the fact that they didn't put in the extra hour showed as they stumbled through the transitions and gave contradictory answers - though they were quick to recover. Practicing your presentation is super important, particularly for funding (and sales) presentations, but it is very easy for people with experience to think they can handle it as they've done it before. The key here is that you may have done it before, but you and your team may not have done it before - together. I have personally experienced this. One time, my team and I worked on the slides together and knew who was presenting what, but we didn't do a practice run together - mostly because we were experienced and I was (mistakenly) thinking I'd avoid the role of a micro-manager by forcing a dry run when we were hard-pressed for time. Instead, I found myself chiming in even when it wasn't my turn to speak because my team member's ad-libbing, outside the points on the slides, was not always in sync with our overall message. It proved that we were articulate and could think on our feet, but it also showed that we weren't prepared - thankfully it was a friendly group and we weren't demolished.
The other important point is the attitude. Our teen team had one faux-pas when talking about why they would be successful (again, ad-libbing) and made a statement prefaced with 'no offence'. It was mild and raised a laugh and was not a deal-breaker, but it may have gone the wrong way on the subjective factor with some judges. Judges, as well as investors and customers, are funny that way - they want the team to show confidence, but not arrogance, and there's a clear difference. Confidence appears to be based on what you have done and what you have learned, arrogance is based on who you are.
But it was all good and a great learning experience for all of us. The winning team, in my opinion, won not only because of the smooth delivery of their presentation, but because they presented themselves as a well-knit team - another lesson for all startups. And a good rule of thumb - don't ever say anything during your pitch that requires 'no offence' before it, unless you're talking football.
After a fall
A few days ago there was a story in the Merc News about a startup that went belly up. Most of my recent posts have been about soldiering on through through the downturn and keeping the startup fire going, but, companies do go under, and this is an interesting story one such.
You can read the full story here, but in brief it is about Hammerhead Systems that as recently as three years ago seemed poised to go big. After all, it had what conventional wisdom holds to be the key elements for success for startups: an experienced team, solid technology and plenty of funding. It must have looked like a sure thing to many people because we're talking serious money here: $100 million (it's hard not to think of all that we can do with just a tiny sliver of it!).
There's probably a bunch of would-have/could-have/should-have considerations, but interestingly the primary reason given for the failure is 'circumstances beyond their control'. The article covers industry turmoil, deals that became undone and buyers that didn't materialize. Though there is mention of some mistakes that were made, the team and the investors cite the times we are in as being the primary cause of their melt-down, preventing them from even being able to sell what they consider to be valuable technology.
By the way, I'm not about to second guess the experts, but I do wonder how, even after the dot-com bust, so much money could be poured into a company before they had real customers. I guess they must have had a good story to tell. But, the reason for posting this story is not schadenfreude, but a couple of items about the people involved:
You can read the full story here, but in brief it is about Hammerhead Systems that as recently as three years ago seemed poised to go big. After all, it had what conventional wisdom holds to be the key elements for success for startups: an experienced team, solid technology and plenty of funding. It must have looked like a sure thing to many people because we're talking serious money here: $100 million (it's hard not to think of all that we can do with just a tiny sliver of it!).
There's probably a bunch of would-have/could-have/should-have considerations, but interestingly the primary reason given for the failure is 'circumstances beyond their control'. The article covers industry turmoil, deals that became undone and buyers that didn't materialize. Though there is mention of some mistakes that were made, the team and the investors cite the times we are in as being the primary cause of their melt-down, preventing them from even being able to sell what they consider to be valuable technology.
By the way, I'm not about to second guess the experts, but I do wonder how, even after the dot-com bust, so much money could be poured into a company before they had real customers. I guess they must have had a good story to tell. But, the reason for posting this story is not schadenfreude, but a couple of items about the people involved:
- The CEO (also a member of the founding team) is the one going down with the ship, doing his best to sell the technology. Another example of the unmatched dedication of the founder/CEOs - they don't quit easily.
- The co-founders would like to start another company. Though this experience was painful, they 'love startups' and are looking to do it all over again.
Opportunities from obstacles
Continuing the musings on dealing with economic turmoil, there's a another worldview - this is just business as usual in emerging markets like Asia, Eastern Europe, Latin America etc. Having just returned from a quick trip to India where everyone I met talked to me about the US downturn , I agree there's something to be learned from countries where economic stability is not taken for granted.
The Wall Street Journal recently had an article on Surviving the Downturn: Lessons from Emerging Markets which is interesting reading. The primary lesson here is that while we in the US, and presumably other developed countries, have a tendency to shrink, retrench, hunker down and other 'fall back' actions, there's a case to be made for seeking growth, as they do in other places. While the article is focused on larger companies, the ideas apply to small startups just as well. For example, the one about increasing product and service visibility - that can be done with a team of one (yourself, the entrepreneur) if need be, and is a great investment as I'd mentioned in a previous post 'time to build'.
The other idea on rethinking customer value is a call for flexibility - and really paying attention to what your customer wants, especially during this time. It helps to understand that value may not always be just about cutting prices. I shop frequently at a Trader Joe's close to my home and used to worry about the survival of a little independent produce store right next to it - it had too little produce and too few customers and I thought it would go under, especially as the economy tightened. But, the management decided to pump it up, put up huge banners stressing 'neighborhood', 'independent', ' farm fresh', all guaranteed to appeal to the kind of people who go to TJ's, and it is now literally overflowing with produce and bustling with customers. They did a little bit of both - increased visibility and paid attention to what the customers value - and are reaping the profits.
Finally, the article ends by emphasizing the underlying theme: stay optimistic. It is not easy, particularly with the daily dose of doom around you, but it is a choice you can make - and a forward-thinking approach will get you focusing on growth, instead of just survival, which vastly increases your chances of being around when the upswing happens. Not to mention, when you stop panicking, you'll have more fun and be more fun too. In a networked world, good ideas flow in all directions.
The Wall Street Journal recently had an article on Surviving the Downturn: Lessons from Emerging Markets which is interesting reading. The primary lesson here is that while we in the US, and presumably other developed countries, have a tendency to shrink, retrench, hunker down and other 'fall back' actions, there's a case to be made for seeking growth, as they do in other places. While the article is focused on larger companies, the ideas apply to small startups just as well. For example, the one about increasing product and service visibility - that can be done with a team of one (yourself, the entrepreneur) if need be, and is a great investment as I'd mentioned in a previous post 'time to build'.
The other idea on rethinking customer value is a call for flexibility - and really paying attention to what your customer wants, especially during this time. It helps to understand that value may not always be just about cutting prices. I shop frequently at a Trader Joe's close to my home and used to worry about the survival of a little independent produce store right next to it - it had too little produce and too few customers and I thought it would go under, especially as the economy tightened. But, the management decided to pump it up, put up huge banners stressing 'neighborhood', 'independent', ' farm fresh', all guaranteed to appeal to the kind of people who go to TJ's, and it is now literally overflowing with produce and bustling with customers. They did a little bit of both - increased visibility and paid attention to what the customers value - and are reaping the profits.
Finally, the article ends by emphasizing the underlying theme: stay optimistic. It is not easy, particularly with the daily dose of doom around you, but it is a choice you can make - and a forward-thinking approach will get you focusing on growth, instead of just survival, which vastly increases your chances of being around when the upswing happens. Not to mention, when you stop panicking, you'll have more fun and be more fun too. In a networked world, good ideas flow in all directions.
Focus on fundamentals
Last night, the teen team I mentor at BUILD (see here for more info from a previous post - is worth your support!) presented at Round 2 of the business plan competition. There are two more competitions to go, the last one being the biggie, but this one was exciting and illuminating on many levels, and as usual, there are many lessons for us grown-up entrepreneurs.
First, there was plenty of drama before the competition. My co-mentor and I were concerned that the team hadn't quite completed the presentation - this was their first attempt at Powerpoint, the lingua franca of business pitches - but we'd given all the feedback we could, and both of us prefer it to be their own effort, not overly influenced by our own business experiences. In other words, we didn't show them how to do sales projection graphs in Excel, for example. And we found out there was more confusion when one of the parents felt that the product was not properly designed (it's an accessory for teens) and got involved in re-doing the whole pitch the night before, but it was too late as the original pitch had already been turned in and that was the one that would be projected.
There was little we as mentors could do minutes before the presentation other than assure the team that the original pitch which they had worked on was good enough, and that they were all familiar with it, so to just go ahead with it. They were the last team to present, so the tension kept mounting. All the previous teams had colorful slides, with sales projection charts and all. We kept repeating that the team shouldn't worry about their plain slides though they weren't convinced - but when it came time to make the pitch, they went up there showing none of the tension and did it and won!
Based on the judges feedback and what I observed, here are some reasons why I think they won, all of which are applicable to any business:
First, there was plenty of drama before the competition. My co-mentor and I were concerned that the team hadn't quite completed the presentation - this was their first attempt at Powerpoint, the lingua franca of business pitches - but we'd given all the feedback we could, and both of us prefer it to be their own effort, not overly influenced by our own business experiences. In other words, we didn't show them how to do sales projection graphs in Excel, for example. And we found out there was more confusion when one of the parents felt that the product was not properly designed (it's an accessory for teens) and got involved in re-doing the whole pitch the night before, but it was too late as the original pitch had already been turned in and that was the one that would be projected.
There was little we as mentors could do minutes before the presentation other than assure the team that the original pitch which they had worked on was good enough, and that they were all familiar with it, so to just go ahead with it. They were the last team to present, so the tension kept mounting. All the previous teams had colorful slides, with sales projection charts and all. We kept repeating that the team shouldn't worry about their plain slides though they weren't convinced - but when it came time to make the pitch, they went up there showing none of the tension and did it and won!
Based on the judges feedback and what I observed, here are some reasons why I think they won, all of which are applicable to any business:
- The lack of color and flash on the slides did not matter, but the content of the slides did. Our team had only a few bullets per slide and they were in simple words (side note, for most of our team, English is a second language). It's good to have clarity in your pitch (though a little color wouldn't hurt).
- The product and manufacturing/distribution process were described clearly and step by step, so everyone could understand it. In fact, the judges even complimented them on the simplicity - which implies the viability - of the process. People trust what they can understand.
- They focused on the important stuff - the product and how they would make it, sell it and what the financials would be. They missed some extras covered by other teams, like what they would do with the profits, but they nailed the core elements of what it takes to build the business - the stuff that matters.
- The team projected confidence, both during the pitch and in the Q&A. Even when questioned on things that they hadn't considered before (like 'barrier to entry'), they thought on their feet and answered with conviction if not accuracy. You trust teams that believe in what they're selling, and if you're sold on it, the chances are potential customers will be too.
Fire in the belly or heartburn?
As I'm continuing to mentor a group of high-school freshmen on starting a business (posted here), I find that every week I get some fresh insight on entrepreneurship, the 'real' kind, for those of us who're doing it for a living. After the last meeting my co-mentor and I were bemoaning the fact that we don't see the 'fire in the belly' and hoping that it will be lit as the team gets more involved and sees their ideas taking shape. And then I came home and read the continuing grim economic news - the trouble with tracking multiple sources is that you read the same bad stuff multiple times. There's a surfeit of stories about startups shutting down (the lucky ones get bought at a fraction of their valuation from last year) - and it struck me, there's heartburn just as often as fire in the belly. Heartburn is a stomach-related symptom too, and while they are literally focused on the same anatomical region, metaphorically they imply two very different things.
- Fire in the Belly: When you can't go to sleep because you keep thinking up product designs or marketing strategies
- HeartBurn: When you can't go to sleep because you're worried about your product or the market out there
- FB: When you chat up your company with everyone you meet and talk about its great potential
- HB: When you talk about how hard it is to run a company with everyone you meet
- FB: When you meet a great potential employee and say 'I want to recruit you!' (thanks Sean/Harvey)
- HB: When you meet a great candidate and say 'I don't have the money to recruit you'
- FB: When you run into a problem, you're impatient to resolve it so you can move ahead
- HB: When you find a problem, you put off dealing with it because you think it will reveal more problems
- FB: During tough economic times, you think 'there must be a way to thrive'
- HB: When the economy is hurting, you think 'it's going to be hard to survive'
- FB: You read a list like this, and think 'of course, this is what entrepreneurs do'
- HB: You read this and think it's just another unrealistic exhortation to 'think positive'
The right one for you
A little while ago I was asked for 'the top 5 things to look for to determine if an entrepreneurial opportunity is the right one for you'. I understood it to mean how to assess an offer to join a startup and answered it as such, only to find out later that it was about assessing which idea to pursue. Interestingly the high school kids I'm mentoring are going through the same exercise of coming up with ideas and seeing if they measure up, so I'll do a post on this soon. For now though, I'll share the answer to the question I thought I was asked - there's actually much benefit in thinking about what kind of startup you'd like to join as it overlaps a lot with what kind of a startup you'd like to build yourself.
To start with, let's assume that you're OK on the compensation front of salary/benefits/equity in whatever proportion. Also, let's assume the logistics, hours etc. are not a problem. Apart from that, here's what I'd recommend you look at, pretty much in order of importance:
1. The team. Do you respect their expertise and, just as importantly, their values? And the most critical question, do you think you can mesh well with the group and their style?
2. The offering. Is it something that you believe you'll find compelling day in/day out, especially at the end of extra-long days? Do you believe you can sell what the company does with passion even if you're not in sales?
3. The plan. Granted early stage startups' biz plans are likely to change as they progress and they may need to prove some things first, but does the sales/distribution plan hold water? Is it in the realm of possibility? Is the market addressable and believable? Is the development plan achievable and the funding feasible? At this stage it is really only a sniff test, but you should look at these points as an investor, of time and energy if not money.
4. The role. Depending on the stage, you may wear many different hats, but still, you need to know what's the core contribution you'll be making and if it makes your heart sing. Startups can be great learning opportunities, in fact, sometimes that may be all the reward that you get when the promise of a big payoff dissipates. But if you're going to spend huge chunks of time doing stuff you don't care about, why bother?
5. The exit. Both yours and the company's. AKA 'worst case scenario'. Everyone will say 'IPO', or more likely, 'M&A' for the company's exit plans, but what will happen if the company doesn't meet it's goals? Shut down, sell the technology, keep it going because it will produce revenue from year 1? And about your exit - what are the events that would cause you to leave? It is always good to have the point at which you call it quits identified well in advance as it will save you a lot of sleepless nights later on. And the reason why this is important before you choose the startup is that it may vary based on the points above, and you should feel comfortable about your exit plans, the timing and the inevitable impact on your future. Check out my previous post on this for the entrepreneur's take.
Finally, there's one last question to ask yourself - would you have fun?
To start with, let's assume that you're OK on the compensation front of salary/benefits/equity in whatever proportion. Also, let's assume the logistics, hours etc. are not a problem. Apart from that, here's what I'd recommend you look at, pretty much in order of importance:
1. The team. Do you respect their expertise and, just as importantly, their values? And the most critical question, do you think you can mesh well with the group and their style?
2. The offering. Is it something that you believe you'll find compelling day in/day out, especially at the end of extra-long days? Do you believe you can sell what the company does with passion even if you're not in sales?
3. The plan. Granted early stage startups' biz plans are likely to change as they progress and they may need to prove some things first, but does the sales/distribution plan hold water? Is it in the realm of possibility? Is the market addressable and believable? Is the development plan achievable and the funding feasible? At this stage it is really only a sniff test, but you should look at these points as an investor, of time and energy if not money.
4. The role. Depending on the stage, you may wear many different hats, but still, you need to know what's the core contribution you'll be making and if it makes your heart sing. Startups can be great learning opportunities, in fact, sometimes that may be all the reward that you get when the promise of a big payoff dissipates. But if you're going to spend huge chunks of time doing stuff you don't care about, why bother?
5. The exit. Both yours and the company's. AKA 'worst case scenario'. Everyone will say 'IPO', or more likely, 'M&A' for the company's exit plans, but what will happen if the company doesn't meet it's goals? Shut down, sell the technology, keep it going because it will produce revenue from year 1? And about your exit - what are the events that would cause you to leave? It is always good to have the point at which you call it quits identified well in advance as it will save you a lot of sleepless nights later on. And the reason why this is important before you choose the startup is that it may vary based on the points above, and you should feel comfortable about your exit plans, the timing and the inevitable impact on your future. Check out my previous post on this for the entrepreneur's take.
Finally, there's one last question to ask yourself - would you have fun?
Time to build
It's two weeks into the new year, and many are still refining (if not defining) their resolutions, regardless of what the gym ads say. Maybe it's because those resolutions made in the hopeful haze of the holidays don't hold up as January briskly marches on.
Well, this blog is about the startup ethos, and I don't do resolutions - but I do plan. And as the year ended, I, like many others, had to review the financials, the marketing and development plans, yada yada. Planning at year end is pretty much a given for any entrepreneur. But last year was not just any old year, and 2009 is starting from the ashes of what was simultaneously the bleakest year for the global economy but also the most hopeful year in American politics, and needless to say, the two are intertwined.
There have been many writings about how startups can survive the year ahead. There was the famous Sequoia presentation that started the belt-tightening in the VC and startup communities of Silicon Valley, and a flurry of how-to-survive posts from CEOs - you can read one here or here. All very useful, but also all oriented to those that have some level of funding or an established revenue stream. What about the entrepreneur who has just started out? How do you grow when everyone's pulling back?
I believe that now's the time to build. That doesn't mean that we sit back and wait for the government to infuse funds and start projects. We need that of course, but what we do at the personal level will have a ripple effect at the global level - if enough of us do it. And for an entrepreneur, in any area, just sitting around wringing hands and bemoaning fates/financiers/politicians is not an option. It's not in our DNA. We've got to be making something happen or we...er, move on.
So how do you build your business with little on no money? Very simply, you need to invest. You need to make an investment of time, energy and mind-share, if not money. Here are some ways you can build:
1. Invest in customers.
Well, this blog is about the startup ethos, and I don't do resolutions - but I do plan. And as the year ended, I, like many others, had to review the financials, the marketing and development plans, yada yada. Planning at year end is pretty much a given for any entrepreneur. But last year was not just any old year, and 2009 is starting from the ashes of what was simultaneously the bleakest year for the global economy but also the most hopeful year in American politics, and needless to say, the two are intertwined.
There have been many writings about how startups can survive the year ahead. There was the famous Sequoia presentation that started the belt-tightening in the VC and startup communities of Silicon Valley, and a flurry of how-to-survive posts from CEOs - you can read one here or here. All very useful, but also all oriented to those that have some level of funding or an established revenue stream. What about the entrepreneur who has just started out? How do you grow when everyone's pulling back?
I believe that now's the time to build. That doesn't mean that we sit back and wait for the government to infuse funds and start projects. We need that of course, but what we do at the personal level will have a ripple effect at the global level - if enough of us do it. And for an entrepreneur, in any area, just sitting around wringing hands and bemoaning fates/financiers/politicians is not an option. It's not in our DNA. We've got to be making something happen or we...er, move on.
So how do you build your business with little on no money? Very simply, you need to invest. You need to make an investment of time, energy and mind-share, if not money. Here are some ways you can build:
1. Invest in customers.
- Get to know your current and future customers/users. Build relationships that you can leverage when they have money to spend or you have the money to deliver. This works for every level, from large enterprises to individual consumers. Even when you're cutting back on spending, or specially then, the promise of new ideas and innovation on the horizon is always sexy.
- Do stuff for free for your users/customers. What you give away now will help you get revenue later.
- Improve your expertise in your chosen area. Build skills and knowledge, do market research, do competitive analysis, talk to customers (see a pattern here?). Get better at what you do.
- Help your team members, if you have any, do the same.
- Build out your product or service. There are folks out there who're either stuck in paying, but boring, jobs or out looking for a job and willing to hone their skills 'donating' a few hours for you. If you're in the service business, take this opportunity to refine/streamline your offerings.
- Talk to customers/users (again!) to make sure you're positioning your product/service for the new environment we're facing.
- Improve your infrastructure and processes, stuff like file sharing, accounting or technical documentation.
- Meet people and establish genuine connections, not just the biz card swap. Customers and users (of course), advisors, tech and domain experts, and even funding sources. Even if they're not investing now, they could help later. Though personally I'm not a fan of doing the 'VC pitch' when there's no hope of funding, I think it helps just to get to know the people in the know.
- No, this doesn't require much money, or even a marketing person on your team. You can spiff up your website (at least update the content), spiff up your presentations and fact sheets, set up blogs and user communities, and generally polish and spread the word.
Subscribe to:
Posts (Atom)