What's special about a New Year

Image courtesy of [Stuart Miles/ FreeDigitalPhotos.net

Why is the first day of the New Year so special?  It's not just the good times and watching the ball drop in Times Square even when you're thousands of miles away in a different time zone, though when you're young, good times may be all that you care about.  But, as you get older, you want more from the event than just the ephemeral experience of partying.  It is because the new year promises a new beginning and we all want another chance, if not for 'do-overs', at least for 'do-betters'.

And new beginnings require changes and big efforts require big changes. If you're already on an fitness program, it is not difficult to add another 15 minutes or do another routine, but if your exercising consists only of clicking your TV remote from the couch, starting to exercise requires you to change.  Change is difficult for many of us who've been conditioned to aim for comfort and predictability and avoid any chance for failure.  But change is life and as we're all changing in small ways even if we don't know it, we might as well sign up for the big changes that we can consciously make to get us to where we want to be and who we want to be.

Considering a change in 2014?  Check out this post from James Altucher.  Wild and crazy, but totally on the mark in its message.  Vive la change!

Entrepreneurial attitude

I believe entrepreneurs are distinguished more by their approach to life than anything else.  Here are two stories I ran across recently that bolster that belief, of two very different people who exemplify the 'just do it' ethos of the entrepreneur.

First up, an 'oh wow' account from a young techie about how he went about making a new dice game.  It details how he went from concept to a game that is now ready to buy, pulling together whatever resources he needed (and learning a lot on what they were and how to find them) to make it happen - a departure from delivering software to delivering a physical product.  The 'oh wow' part is not only does the game sound cool, but that he took on the effort, and more importantly, the risk of failure, at building something new.

The second story is more of an 'awww...' one - an 89 year old woman (yes, 89!) who decided to pretty up her walking stick and seeing how everyone liked it, she started a business selling decorated canes to anyone else who wants a little cheer on their stick (cherry on the top - she raised expansion funds on Kickstarter!)  Here's a lady who happily plunged into entrepreneurship when everyone would be expecting her to be sitting back and relaxing in her rocking chair.

How many of us think of products like these and don't ever take them beyond a Sunday afternoon daydream spin?  These may not be ideas that "put a ding in the universe", "disrupt" anything or aspire to "billion dollar market caps", but their creators didn't let modest goals, lack of experience, or age hold them back from bringing them to market - and clearly, they had a lot of fun in the process.

Enjoy the stories on Happy Canes and Space Dice - do you have a story to share?

Image courtesy of Master Isolated Images/ FreeDigitalPhotos.net

Scary thoughts on startups

Top 10 scary things for entrepreneurs, in no particular order:

1. Actually getting started.  It's much easier to talk about starting a company - everyone thinks it is so exciting and gives you a 100 suggestions and you feel you're floating on air and are high on enthusiasm.  But actually start a company and suddenly there's a metric ton settling down on  your shoulders - now you have to talk about reality, not dreams.
2. Building a team.  Yes, you have your best friend from college as your co-founder, but what if you say zig and he says zag?  What if you can't find any good people with the right skill sets, for example, you can't find developers and you have to learn how to code (all over again)?  What if there's nobody but you in your company?
3. Having the right idea. You did talk to 100 people before you started, but they were friends of friends at that huge end-of-summer party you went to and though they all thought it was cool, it could be that they were in party mode.  How can you be sure your idea is really good?
4. Business plans.  It's either a big mystery and you have no idea how to go about it, or, you know exactly what to do and hate the idea of having to re-word, re-calculate, re-format every time you show it to someone new.  
5. Getting money.  What if you don't know any rich angels and your friends and family have slim wallets?  Maybe you can bootstrap, but you'd have to figure out if there's a boot to strap (or a strap to boot) - and it has to work with your specific idea.
6. Legal coverage.  Lawyers cost money (see above), but could you get sued, cheated, conned out of money/stock/intellectual property if you're not sufficiently lawyered-up?
7. Competition.  The horizon is full of 800-lb gorrillas and pesky little startups (not yours) that want to do exactly what you plan to, and look like they'll get there faster and blow you out.
8. Customers.  Or users.  What if they don't show up?  Or worse, they don't show up only randomly and you can't show a chart-popping growth rate?  Is it a bad idea or bad marketing?
9. Time.  As in the thing you can run out of, along with money.  
10. Expert advice.  The blogs, the pundits, the classes, the social media groups, all making holding forth on why your startup will fail, and, to add insult to the injury, why your company is not even a startup because it doesn't fit some VC's startup profile or, to rub salt in it, why you will fail because you don't have the profile of a successful entrepreneur - wrong college, wrong age, wrong degree, wrong home town, whatever.

This stuff could make you want to throw up your hands and head back to the safety of a corporate job.  And you would, but for the fact you believe the scariest thing of all is not being what you want to be - an entrepreneur.

Happy Halloween!

Image source

Who is an entrepreneur?

My favorite definition of an entrepreneur has been 'One who recognizes opportunities and organizes resources to take advantage of the opportunity'.  But I read a new one in a post a couple of days ago - actually, it was conceived 37 years ago by Harvard Business School professor Howard Stevenson - that puts the 'organizes resources' in a different light.   Stevenson's definition of entrepreneurship is 'the pursuit of opportunity without regard to resources currently controlled.'


The 'without regard to resources' is an interesting differentiation.  This implies that, to an entrepreneur, the appeal of the opportunity is more important than the availability of the resources to execute on the opportunity.  At every step the entrepreneur looks at what should be done and then figures out how to do it - instead of the standard approach of looking at what can be done and how it should be made to fit.  The entrepreneurial approach starts with the results required instead of the resources available.  Looking back at some of the great entrepreneur stories (Steve Jobs for example) this seems to have definitely been the case.  The post also quotes Stevenson on how more entrepreneurs start out poor instead of rich as they are less constrained by lack of resources.  (Though that didn't apply to Bill Gates.)


I do like the definition though. You can see it in all the entrepreneurs who boot-strap their way to success.  It is what drives entrepreneurs to work with contractors to build prototypes if they don't have co-founders, and not be afraid to do marketing and sales even if their own background is in engineering.  They are not stuck in the comfort zone of requiring all the questions to be answered before going after the opportunity.   Maybe it's just another way of saying that an entrepreneur is - cheers, you guessed it! - a risk-taker.  You can read the Inc.com post here.

Social entrepreneurship at work

In a long ago post, I'd quoted one definition of an entrepreneur as 'one who sees an opportunity and organizes resources to take advantage of it'.  Modifying that slightly, I'd say a social entrepreneur is 'one who sees an opportunity for social good and organizes resources to deliver it'. 

I've recently been working with the Silicon Valley Education Foundation as part of their Step Up to Algebra program, a middle-school math outreach effort.

• The need?  Large numbers of students in Silicon Valley were entering high school with little or no skills in algebra.  And as SVEF CEO Muhammed Chaudhry points out "students who study math at least through Algebra II in high school are more than twice as likely as those who do not to earn a four-year degree, and the level of math a student reaches is the most accurate predictor of whether that student will earn a Bachelor’s degree" (Adelman, 1999 & 2006).  
• The resources?  SVEF started the program a few years ago by providing summer workshops for students in local middle schools, using mentors from the community (usually local corporations) to provide the one-on-one support needed to help these students (typically under-resourced) get comfortable with algebra.  And of course, they do secure the all-important resource of funding to enable the program.

The program has been running for a few years now and they have delivered.  But entrepreneurs stay on top of changing market needs and refine offerings to fit them.  It apparent that there are more students needing help in algebra, and it also like a good idea to provide them that help throughout the year, not just for a few weeks over the summer, so they can gain increased competence in the subject. 

As always, the challenge is matching resources to goals.  Expanding the program makes logistics and volunteer sourcing difficult, so SVEF turned to technology to help make that happen.  In a sort of 'blended learning' approach, with bi-monthly in-person sessions, bolstered by the excellent Khan Academy content, and online mentoring on the Meemli platform, SVEF is able to deliver more help to more students, more often.  (Disclosure: I'm Meemli's founder, and I'm writing this to share my first-hand experience with SVEF's exciting approach.)

Working closely with SVEF, I get to see all the challenges non-profits face, especially in public education: working with cash-strapped schools, over-worked teachers and varying environments in each district.  I also see how hard it is to be innovative, take risks, work with outside resources you don't control and do it all with limited staff and funding constraints.  It takes patience and a willingness to go with the flow while still reaching for the goal - things that you don't see much of in tech startups, by the way.  As an entrepreneur myself, I'm impressed that SVEF is, on their own, putting together a delivery system for their program incorporating new technology instead of sticking to the proven, mainstream/late-adopter options.  Not many are willing to take this kind of a leap, even in Silicon Valley - innovative risks are easier dreamed of than embraced.  Kudos to SVEF for being true entrepreneurs for social good!

The Tao of Steve Jobs

Just to get it out of the way, 'The Tao of Steve Jobs' has nothing in common with the movie 'The Tao of Steve' except for the first four words.  That's it.  This is not a book or movie or anything more than one small blog post about one amazing man.

It's almost a month since Steve Jobs died and there have been a zillion people opining about his life and legacy, as well as the inevitable detractors and tut-tutters.  And just when the stories seemed to be slowing down, out came his biography and TV shows - even SNL did its best. There are so many angles to the stories too - Steve the entrepreneur, the dropout/rebel, the wunderkind who was shunned by the tech establishment and then came back to show them, the family man who was felled by cancer.  Here are two widely different perspectives I liked reading: James Altucher's blog post and the eulogy by Mona Simpson (Steve's sister). 

For Silicon Valley tech entrepreneurs, Steve was a god.  The one we all wished to be like, the fearless (and smashingly successful) entrepreneur,  the tech visionary who couldn't be caught, the genius worshiped by product designers everywhere.  Would-be entrepreneurs as well as famously successful ones (Zuckerberg, Page and Brin for example) desired to learn how to do it 'Steve's way'. 

The Tao of Steve Jobs, as I like to call it, are all those 'core values' that define the way he did things.  All these items are well known and are excellent advice not just for entrepreneurs, but possibly to anyone wishing to make something meaningful in his/her life:

• Focus.  
• You can't do everything, and certainly can't do everything well.  And yes, sometimes the focus is overwhelming and obsessive, but it may have to be so to get the job done.
• Simplicity.
•  Not only because of the inherent beauty in simplicity, but because it ultimately produces a better product, experience, outcome.
• Excellence.
• 'Perfect' trumps 'good enough' every time.
• 'Stay hungry.'
• If you're not striving and yearning for something, if you're not passionate about it, it's not going to happen.
  
• 'Stay foolish.'
• Do what you believe in.  Take the risk to act on it.

 (The last two are from Steve's speech to the Stanford students.  If you've somehow missed it or want to hear it again, here it is - one of the best commencement speeches of all time.)

A long while ago I wrote about what is important to me - create, care, connect (you can read that post here).  I realize how Steve epitomizes each of those.  He was undeniably creative - I've always appreciated Apple more than any other tech company as they tended to create, not copy/buy, successful ideas.  Steve cared deeply about what he did (even if he did not directly show his 'care' in the traditional way for social causes).  He micro-managed (and threw tantrums) because he cared so much about every aspect of what Apple built.  As for connecting, he connected the dots way, way outside the box and saw possibilities others couldn't even imagine.  Despite his imperfections, I admired him and what he represented - an embodiment of truth in design and the entrepreneurial fire.  He will be missed, and it may be ages before another like him shows up, but, like me, techies and entrepreneurs everywhere will be inspired by the Tao of Steve Jobs for a long time..

Upside of Failure

The Sunday New York Times magazine had a thought-provoking article on whether schools should focus on building 'character' and not just academic competence.  I generally applaud the sentiment, though I also believe that kids get much of their character guidance from parents and the community, with the school supporting and emphasizing it.

The article is titled 'What if the Secret to Success is Failure?' and goes on to cover all the character-building benefits of failing at something which then leads to future success.  Again, yes, I do support the concept as I believe it builds resilience, which is a big factor in successfully navigating this fast-changing world.  (I also believe students should be taught compassion, but that's a different story.)  What made this article particularly appealing to me is how much of this approach resonates with successful entrepreneurship.

"True: learning is fun, exhilarating and gratifying.... — but it is also often daunting, exhausting and sometimes discouraging."  Just like entrepreneurship!  "People who accomplished great things.... often combined a passion for a single mission with an unswerving dedication to achieve that mission, whatever the obstacles and however long it might take."  That is the defining characteristic of an entrepreneur.  The concern about children from affluent families having so much done for them that they're unable to deal with setbacks is somewhat like an over-funded startup failing because it never had the pressure of limited resources making it focus on what was really important.  And of course, the idea that failed experiments and uncertainty contribute to the development of grit and ultimate success is one of the reasons that, in Silicon Valley at least, a two-time entrepreneur is respected, even if the first time was a bust.

There is more, for example, 'social intelligence' and 'optimism' are super helpful for entrepreneurs too.  Read the article here - it'll make you wonder if teaching entrepreneurship will do more than just help build the economy.

Entrepreneur vs. executive

I'd read this article a while ago and found it both interesting and fun - fun because it is amusing to see a bit of yourself in 'case studies'. The article itself - with the lofty title of 'How Great Entrepreneurs Think'- is about a case study comparing how successful entrepreneurs and successful corporate CEOs would approach the same problem of a hypothetical startup .

The #1 take-away is that entrepreneurs shift their goals as they go along based on what they have to work with, while executives stake out a goal and then figure out what they would need to work with to make it happen. It seems to me that the environment determines the approach - and possibly attracts the kind of person who favors that approach. A startup is, by its nature, fluid and changeable (see my previous post on the adaptive startup) and I'd guess a successful entrepreneur has to roll with it. Conversely, larger companies probably cannot afford to have fluid goals - how do you get 10,000 employees rallying around shifting objectives when it often takes months just to get the objectives for the year communicated and 'aligned'.

The other distinguishing characteristic is putting a premium on acquiring a customer over doing market research and having first-hand knowledge of the industry/market niche vs. relying on focus groups (most entrepreneurs I've met don't use focus groups). That is probably due to the fact that the entrepreneur cannot spread the risk unlike the corporate CEO. Again, it's entirely possible that entrepreneurship draws the kind of person who likes getting her hands dirty and believes in the knowing-by-doing gospel versus what other people tell her.

Enough with my post, go read the source - it's a quick read and you may recognize a bit of yourself there.

The road to entrepreneurship

Prerna Gupta provides a textbook case for why people choose to be entrepreneurs. Unsatisfied in spite of her high-paying, high-perk consulting job? Check. Bored selling something that didn't excite her for another (VC) company? Check. Hated working in a 'conventional structure'? Disliked having a boss? Miserable sitting in an office working on 'someone else's creation'? Check, check, check.

So she did the logical thing: started a tech company with her boyfriend (now husband). Prerna is well aware that success is not guaranteed, yet the risk of failure is not enough to send her back to a safe job working for someone else. She has realized that even the most routine work is more meaningful when it is towards her passion (her startup) and being an entrepreneur has significantly improved her outlook on life.

So should everyone who's unhappy with long hours or selling things they don't care about bail and start a company? Of course not. Most people would be happy to find work they care about, even if it is working for someone else. After all, few entrepreneurs can go at it on their own - they need to build a team that can get passionate about their idea and there are plenty of people who'd bring entrepreneurial gusto to someone else's startup. But when many aspects of your work seem at odds with what you want from your work life, it is clear that you should stop and assess what you should be doing as Prerna did. Clearly Prerna had some advantages that smoothed her road to entrepreneurship: a Stanford degree and being surrounded by the startup culture in Silicon Valley that almost pushes smart young people into starting companies. Another advantage is that she obviously has the ability to face potential financial failure with some equanimity too. Most would-be entrepreneurs may not be so lucky, yet, paradoxically, someone who embarks on a venture even without these advantages may be the true entrepreneur for taking the road, potholes, speedbumps and all.

You can read about Prerna here - it's a good read for all entrepreneurs and entrepreneur-hopefuls too.

Decide to act

I remember the bane of 'analysis paralysis' from my corporate years - there was always one faction that favored lengthy and laborious analysis before even agreeing to a proposal, sometimes to the extent that the proposal became obsolete. While understanding and supporting the need for analysis, I personally preferred the 'do your homework quickly, highlight the risks, plan an escape route and then go for it' approach myself and often had to dig in deep to find patience when faced with endless analysis that I couldn't control.

But for an entrepreneur, quick decisions are a necessity not an option. In an earlier post I'd written about the adaptive startup and why it is important for a startup to change, but there has to be a decision to act first in order to have something that requires change. As an early stage entrepreneur, you have to remember there's no such thing as a perfect product or a perfect market or even a perfect team - you've got to lead with what you've got and make something happen. Granted you may find that you've headed in the wrong direction and you have to make course corrections, but at least you're moving. It's hard to be agile if you're static.

I was reminded of this recently by two things. First, I was contemplating launching a new program but was concerned about the fact that the software was missing a couple of features that I felt to be key and that I didn't have dedicated resources to get started. Most of all I wasn't sure this program would even be successful though on paper it seemed so, and it didn't help that everyone around me was in tactical mode and couldn't meaningfully engage in a discussion in a timely manner. The standard process would have been to take more time to do deeper analysis on viability as well as assess the software changes impact before making the decision to go ahead. All it took was one simple 'aha' moment to remember that the program could be launched as a contained pilot and the software features could be (I was sure they would be) suggestions from the users and prioritized by them. I made the decision to get started and I'm happy to say the program's well on its way and everything is falling into place as part of just getting it done - that includes the resources.

Soon after I'd made the decision, I ran across this post which delivered a virtual pat on the back validating the entrepreneur's need for quick decisions - and by implication, quick action. It is well known that the idea alone is not sufficient for a successful startup, it's the execution of the idea that counts - and execution is all about deciding and doing. As an entrepreneur remember you have a need, a need for speed!

The sky is falling

It sure looks like it, given the financial news worldwide. Stocks falling, credit freezing, centuries-old bastions of industry faltering. It's not pretty, and no one knows what's going to happen next. So what does it mean for entrepreneurs who're just starting out?

In the high tech world, when top venture capitalists speak, Silicon Valley, and as we (possibly hubristically) believe, the world, listens. They have been well covered in other blogs; TechCrunch has Sequoia's 'doom' outlook, Benchmark's call to frugality and angel investor Ron Conway's cautionary memo - all very interesting and must-read. Most of the focus is on companies that are already funded, not early stage ones that are hoping to get there, but the message is pretty similar for both: don't expect funding. The prevailing mood is dour and the call-to-action is 'hunker-down'. Nothing unusual though - VCs are typically conservative, though they're ostensibly in the business of taking risks - nobody gets fired for preaching thriftness (with impending doom).

But I'm not alone in thinking that entrepreneurs do have an opportunity in this climate and a startup is not a bad place to be in. While the VCs are talking mostly about funded companies, the warning on scarcity of funding is probably even more true for the fledgling startup. Even if you aren't doing a startup which requires funding, you still have to face an environment where customers are not quick to buy anything. so, if you have mortgages to pay off and mouths to feed, I wouldn't recommend quitting to start something. But if you're unencumbered and/or find yourself out of a job, or if you have some spare time for moonlighting, and have an idea that's you're burning to try out, now may be a good time to do so.

Successfully launching a startup in these times comes down to four things. The first is your idea. Is it something that can be done with little money? When do you have to go to market? If it is in the near future, it had better smell 'recession-proof' and that's no mean feat. There are many who think that means saving a few bucks for their customer, but a lower price is meaningless if it is something your customer can do without. What you offer should be obviously of value to your customer/user today, without needing a sales spin or convincing, and should be competitively priced. Then you'll have a chance of gaining traction in the market.

The second is execution. Your awesome value-delivering idea is just that, an idea, not a successful company, if you can't execute on it. And in lean times, execution is about getting stuff done with little money. Which means thinking frugally at every step and finding alternatives. You have to make tough choices and may find your timeline slipping because you don't have the resources, but that is better than slipping on quality. But 'getting stuff done' also means staying focused and not letting your vision slide along with stock prices on Wall Street.

The third item is your team. Even if you only have a couple of people moonlighting on your venture, you'll see upward momentum if they have a 'can-do' spirit and feel ownership in the success of the company. And it is always more uplifting to be with pragmatic, but positive, people than those who gripe and groan - when times are bleak, you don't want your team to be ditto.

The fourth is what kind of an entrepreneur you are. If you're focused, flexible, determined and unafraid to work with little money while diligent about seeking more, you have a much better chance of survival. If you tire quickly of lean budgets and making-do, this is not the time for your startup. The bar is higher during tough times, but not impossible to clear, and if you can do that, you'll still be standing when the sky is raised again.

The downside

There's been a lot of blogtalk about a couple of startups that have recently pulled the plug on their failing ventures, some after many millions of dollars of spending and years of effort. There are two that I found interesting because they contemplated the possibility of failure and how it could become reality - the downside of startups.

The first was about the recent closure of Edgeio and what appears to the similar fate facing Podtech. Both companies had high profile guys - the kind that were sought after to opine about tech trends at big-ticket conferences - at the helm, both raised decent VC funds, but that didn't guarantee success. According to the blogger (here's the post) it all boils down to too much hype and too little focus on the business.

The second one is by a founder of the company that shutdown, Zingdom. His post details how the company went through 5 years and three rounds of funding, built a product with a supportive customer base and still couldn't stay in business. It is extremely interesting to see how things can appear to be moving forward on the surface while unraveling below. A most cautionary tale. The lessons learned span everything from development methodology to keeping up with the Valley happenings, but one of particular note is that 'having too much money' can be dangerous.

Focus on the customer/user. It's a very simple and powerful mantra whether you're opening a Cali-French bistro or creating a website for folks hot-footing it to global-warming travel sites. But however well-intentioned you are, and even if you think that's exactly what you're doing, it is easy to get your sights blurry. For instance, our team made a technology decision in the interests of getting the product out to the user quickly. User-focused right? Maybe, but not comprehensively so, as they missed the requirement that users would want adds and changes and the tools used should easily support that - which unfortunately the bleeding-edge choice wouldn't be able to without much bandaiding. Lucky for us we saw this before we got too far, and it has made us hyper-aware about double-checking our decision-making at all levels. And it makes us more sympathetic and less know-it-all-y. The companies mentioned above didn't seek to fail and they had sharp people leading them. And yet they strayed off the path, stumbled and couldn't get up. And as conjectured in the blogs, it could be that all the money they got muffled the 'stay on target' message in their ear. Money - too much can deliver too little.

More, or less

One of my managers from many years ago was very fond of the word 'interlock' - especially in the context of 'achieving interlock' between marketing and development or sales and engineering. His was a world of departments of a few hundred people each and budgets in mega-millions, but I believe it is a big challenge in an early stage startup too.

We're all intimately familiar with the balancing act between time, resources and scope, delivering a wobbly visual regardless of which metaphor you choose. Scrunch it down to the startup when all you have are minimal resources who most likely are on a steep learning curve (in a startup it's hard to totally avoid the bleeding edge) while trying to deliver the prototype or beta or whatever, and do it so the customer/user will be blown away - which means an ever-increasing scope of course. And you need it to have happened yesterday so you can get the traction and funding you need to get out of the bind you're in (or so you think).

This makes for some exquisite tension in the team. Yes, you're all passionate and all committed to delivering a quality product that'll take the world (or the little piece you're going after) by storm, but time's a-slipping even when the team's putting in 18-hour days, so what's an entrepreneur to do?

I believe now's when you need your values and focus, the stuff you can measure your decisions and actions by, and makes it easier for your team to accept.

• Customer focus. This is why you don't settle just for what's technically faster or easier to deliver, but what will really make a difference to the customer. It's why you should weigh every option and reject it if it would take away from the user experience.
• Excellence and integrity. The reason you don't want to put out a shoddy piece of work, even if it is only a prototype.
  
• People focus. It's one thing for everyone to work hard because they want to make a deadline, but there are times when you may have to move the deadline because working long hours continuously only burns people out (and also diminishes quality and productivity).
• Staying hungry. If you, like Steve Jobs, believe hunger keeps you sharp, you don't want to go too soft on either your deadlines or you deliverables. And for many startups, hunger is real - they need to make their deliverables, and do it fast, in order to get funding which will help them eat (OK, so no one's starving, but maybe the team hopes to dine on something better than a large 1 topping pizza - $3 off with coupon). You need to be zipping along, not coasting.
  

In reality, there's no easy answer. The most experienced entrepreneur, with the best-intentioned and committed team, will run into this conflict, again and yet again. There might a whole slew of adjustments and compromises to be made, but it can be done successfully. The trick is to remember to keep your values front-and-center, and hold on to your cool too.

The stealth mode startup

I'm betting 8 out of 10 startups begin by being in the 'stealth' mode (that's based on a scientifically conducted multi-year study of course). Most of the entrepreneurs I run into, who've just launched companies, are quick to claim they're stealth, or 'under the radar' - that's true for moi too - and it can persist for quite a while.

So why do entrepreneurs like me go 'stealth'? It's primarily because they don't want anyone else ripping off their idea. This presumably changes when they've got enough funding, staffing and traction that it doesn't matter - or more likely, when publicity is required to build traction. Of course that begs the question, is your idea that easy to rip off? Don't you have some deep, complex IP that takes six PhDs six years to construct? Not so much in the web world, and not even in the enterprise arena. And entrepreneurs are a paranoid bunch - and often need to be so. (I admit to sometimes using the 'stealth' term as a cop out since I don't really want to discuss it with a given person or group - a negative vibe thing.) So 'stealth' is understandable, accepted and occasionally considered glamorous and attractive, especially if you're stealth even after VC funding.

But there's a down side to stealth. There's not enough info about your venture to get people excited. And you and your team are constantly weighing what to say and to whom. Investors don't do NDAs, and standard business practices don't always favor the early stage entrepreneur. You can pick who you pitch to, but can't bet they're in the clear - for all you know, they might be doing due diligence on a competitor, and you're it. (That's another topic though.) What about potential candidates? In a tough market, what you do is an important part of the mix. How much can you tell? I did a previous post on this - TMI - and this is continuation on the musings.

The website is another big challenge. Usually people look at the website to get an idea of the company - not just what it is about, but what it is like. Most stealth ones say very little. Are you missing a key hiring edge? This is a question my team is struggling with right now. How can we make ourselves interesting without revealing too much. Not very easy to do, as we can't even look at other similar startups to see how they've handled it (they're in stealth, duh). But we're at least decided on what it should have: much ado about nothing.

Chicken or choice

There's a comment on a previous post (Risk in Business - Part II) where anonymous asks if not jumping into entrepreneurship due to family obligations is being chicken or making a responsible choice. This is so often the subject of much angst and insomnia that I feel like devoting a post, instead of just 2-liner response, to it.

First, I wouldn't recommend anyone put their startup above their family (but at the same level, hmm...). Check out Guy Kawasaki's position that high housing prices foster startups as cheaper housing encourages young people to buy houses sooner, and have kids, and then all thoughts of startups go bye-bye. Seriously, at the end of the day (the day that comes when you're 80 some years old), if you've done a great startup but mucked up your relationships, you're going to be one sad, lonely old soul wishing you had a do-over. No question there.

Second, not everyone is an entrepreneur, just as not everyone's a doctor or athlete or bagpipe player. For another view, check out this blog post by an entrepreneur who's quite spirited about it. In short, having some entrepreneurial qualities doesn't automatically make you one.

Going back to the chicken question, anonymous mentioned having an idea and the urge, but setting these aside to pay the bills. My response is simple, go back to the fundamentals - having an idea is not enough, you have to be passionate about it. Otherwise, it is just something that you're contemplating on lazy Sunday afternoons, along with exotic vacations and fantasy homes. On the other hand, if the idea has real meaning for you, you'll find you can't just set it aside. If you're passionate about it, you'll figure out fairly soon that you cannot sustain your relationships if you don't indulge your passion, however slightly - it is not an 'either/or' but an 'and'. From there, it is not a big leap to think about how to carve out time to develop your idea while keeping your job, how you can find someone else to work with you on it, etc. etc. As I'd mentioned in a previous post Moonlighting, this is pretty much standard operating procedure for most entrepreneurs when they're just getting started. You may have heard of how Wozniak kept his job for a year or so while getting Apple off the ground, and he's not the only one. I personally know a bunch of people who're developing their ideas while bringing home paychecks from their 'regular' jobs, working to get to the point when they can make the switch. There's one young man who's working on his idea, usually late at night, while maintaining a full time job, and helping his wife get her own business off the ground while managing their young family - and he doesn't consider any of it a chore or an energy drain at all, because he's so excited about it. I don't believe this phenomenon is necessarily limited to youth or high-tech startups. There are a lot of middle-aged, and older, folks who don't have the luxury of quitting their jobs, but have goals that they want to pursue, doing the same thing - they don't park their dreams, they just keep it in low gear, and keep working towards the day when they can kick it up.

In my view, not going after your idea is not a matter of being chicken or making a choice to be responsible. It is a matter of not feeling fired up, just slightly warm, at the thought of it.

Risk in Business - Part II

I recently heard Marissa Mayer of Google at Stanford's GSB. Being a veritable tech goddess, and from the pantheon of Google, arguably the coolest hot company on the planet at this time, she addressed a large, awed audience. During Q&A she was asked what personal traits made her successful. Her response, to paraphrase, was her affinity for hard work, her desire to be surrounded by extremely smart people and her willingness to get into things that she might not be quite ready for. The last was very intriguing, especially when she gave the example of living in a country without knowing the language.

This is risk-taking too, not a jump off the cliff risk (the kind that makes you give up your steady paycheck to strike out on your own) but in the form of a willingess to be uncomfortable - to get off the cozy couch in the comfort zone. This resonated with me as the best piece of advice I got during my first year in a startup was 'get out of your comfort zone'.

Staying in your comfort zone is a partly due to an aversion to effort, since the new activity is almost always in an area of little interest to you (if it were, it would be inside your zone) and you need to develop the required skills. It is also due to a fear of failure, since you don't have the requisite skills in your back pocket you're afraid you'll fall flat on your face. To kick the attachment to the c-zone, you need another 'c' - confidence. Confidence makes you feel that even if you don't have what it takes to do something right now, you do have what it takes to get it - and get it fast enough to do the job.

Whether it is getting used to making sales calls (my own challenge) or making VC pitches, every entrepreneur will have at least one thing that they're not used to, or don't like doing, or know very little of - but needs to be done for the success of their startup. And you know you'll just have to suck it up and do it. There are two good reasons for getting out of your comfort zone. One, things get easier the more you do them and two, you may actually get to like them as you've blurred the boundaries of your c-zone and brought them in.

Risk in business.

Earlier on, in a post on definition of an entrepreneur, I'd written about the must-have trait of risk-taking. In the past couple of days I've run across a couple of viewpoints on risk that brought home the fact that risk-taking is not an on or off, black or white thing. It's very individual and situational, and is about one-size-fits-all as a contact lens.

First, I read a blog on corporate entrepreneurship. Yes, that phenomenon exists (I can personally attest to that), and corporations are frequently smitten with the urge to develop 'entrepreneurship', along with its twin 'innovation', in order to stay ahead of the running of the competitive bulls. There was a post in this blog on creating a 'decision-making network' - i.e., managing risk by spreading it to your network within the organization. In the corporate world the decision to take a risk is less likely to be an individual one (management by consensus anyone?). There are steering committees, audit committees, planning committees, strategy councils and of course the BOD (no, not that bod - the board of directors). Anything you take on will most likely fit into some approved master plan. And when you do get the green light, there are enough people to pick and choose for your 'support network' to deliver on the idea. Yes, championing a new initiative may be risky, but it is less likely that it has sudden-death consequences for the company (though getting fired may feel that way to you). Most of all, you don't have the burden of making payroll hanging over your head.

The entrepreneur's risk is a different beast, larger, faster and with more teeth - and lurking within pouncing range. In the early stages the very existence of your business is at risk, and that too on a daily basis. Sudden-death is not an imaginary monster under the bed, but a dwindling cash balance without visibility of revenue or funding. Which is why you do so badly want a founding team. You hope your co-founders will have skin in the game, not so much to lessen the risk, but so you don't have to face it alone. This is not like the network you'd have in a corporation, where you could have the luxury of focusing on the specific project. Here you, and your 'network' (read your whole startup team) have to focus on the survival of the whole business. And just to keep you sharp, you have to simultaneously focus on growth, innovation, and staying ahead of the ever-threatening competition.

The good news is that as the business grows, the visceral impact of the risk lessens - the 'death' is no longer likely to be 'sudden'. You get the warm fuzzies from receivables, and possibly funding, floating you for months at a time. You can keep the edge, but lose the sweat.

If you're a risk-taker in your corporate life, you could possibly be primed to be an entrepreneur too. Just remember that grabbing your tabby's fluffy tail, risking scratched arms and snagged clothing, is nothing like doing the same with a tiger.

TMI.

Every entrepreneur worries about giving away too much information about his hot idea until it is no longer an idea but a fait accompli. Here are just some of the one-liners (forget the 30-second pitch) I've heard recently about some ventures: "It's in networking, but hardware'; 'It's networking software'; 'It's a networking appliance'; 'It's social networking'; 'It's distributing networked content'. Impressive. These are clearly the result of much deliberation. Notice that there's enough information to know if the startup is about hardware/sofware or both, and they're all in some way involved with networking (which is only a mammoth market with myriad niches). But that's it. There's no hint of what it is the startup will actually do. Hey, I've even run across people who're starting consulting practices who clam up about the details (consult with high-tech manufacturers - now that narrows the field).

I understand the reluctance to say too much too soon to too many - I'm not crazy about broadcasting my own idea either (no, it is not in networking - or is it?). But how do you maintain a conversation without sounding like a delusional dweeb with a penchant for conspiracy theories? For example, how do you answer a specific followup like "what kind of content do you work with"? Do you sound vague and weak and in serious need of a shot of business savvy by saying "all kinds", or uptight and suspicious with "can't talk about it yet"?

In my opinion, the majority of people do not need to know much - maybe just that you're involved in a certain space, field, industry. So what if your one-liner is a conversation dampener - you can always segue to a story about your chihuahua if you have one. Your cousin's wedding or your high school reunion are not events where you should be pouring out your entrepreneurial dreams anyway. And avoid events like entrepreneurs' forums (especially if they're awash with VCs) unless you're ready to bare all - folks in these places are very good at dragging details out of you.

There are some people who you'd want to talk to in some depth though. Maybe you want their advice, or you're hoping to hire them, or maybe they could be a customer. There are some that you could do an NDA with (potential hires for example), but as one colleague asked, how do you enforce the NDA? I'm sure it can be done, and people have done it, but I'm hoping the NDA is evidence of seriousness, something that'll make the signer a little more cautious. But there are many folks I've talked to without an NDA - these tend to be super-experienced, business heavy weights who I treat as trustworthy because they've proven to be so. But even then, I don't give them all the details. As for customer prospects, they're most unlikely to sign an NDA, especially at an early stage. They're tricky to work with since if you think of them as a prospect most likely the potential competition will too, and few of them would be secretive about your ideas unless your rep's like Tony Soprano's. Best tactic with prospects is to let them do the talking and cover way more ground than you intend to focus on - it'll give you good background info and make them a little fuzzy about the specifics.

Reticence. Caution. Discretion. All dull-sounding traits, but that's what you'll have to practice for a while until your startup is solid. But some day, oh frabjous day!, when you've got actual customers, you'll be ready to flood the world with information (and/or marketing-speak) and limit your paranoia to intellectual property protection. And then you can retire those chihuahua-story diversionary tactics.

Moonlighting.

In the very early stages, when all you have is an idea, it clearly makes sense to keep your current job. After all, you need to vet the idea to make sure it is viable (does the world really need a on-demand joke explainer?). So, you continue to work, spend a month or so researching, maybe even draw up some numbers and it's all looking good. What next?

If you're already at the enviable stage of not having to work for a living, there's a blog on yacht-buying that you should be reading. But if you're like most others, you've got to make money to cover pesky essentials like food and clothing and car insurance, and of course, gas, and you can't just up and quit. You need an exit-and-launch strategy.

I've seen a couple of entrepreneurs who'd set a goal of how much they'd have stashed in the bank before they quit, and they stuck it out in their jobs until they got there. Their discipline is very commendable - it would be wrenching to be spending long hours working on something else when your startup is so tantalizingly close.

There's the approach of continuing to draw the paycheck until you've lined up alternate funds, i.e. investors. Sounds great in theory, but there are many requirements to be met before investors commit funds, unless you're a proven entrepreneur with past successes. For example, it really helps to have a customers lined up - which is challenging to achieve without funding or product (but not impossible). It could take a long while before the startup is ready for funding. And of course, in all these cases you have to worry about intellectual property rights for anything you may develop while in someone else's employ.

Plan C, or the hedging-your-bets approach is to keep working until the startup reaches some milestons leading to revenue or funding, but maybe in a reduced capacity. This way you have more time to spend on your dream, but there's some spare change in your pockets too ,as well as light at the end of the tunnel. Consulting seems to be an attractive choice for providing some income while moonlighting on building a startup. It has a lot going for it - flexibility, no long-term commitments, decent compensation. But the downside is that there's no guarantees, and what you thought was a cushy three-month gig may turn out to be a three-day budget vaporization and you may have to spend your 'free' time seeking new engagements instead of nurturing your startup.

Lacking other financial cushions, working on another job while laying the foundation for your startup is a sensible approach, but it does have its costs. It takes time and distracts you from your idea. And there could be the very real danger of slipping into a 'comfort zone coma' - you're making money, so you slow down. You have to work hard to keep the fire in the belly burning (lay off the antacids!) so you can devote yourself to your dream sooner instead of later. If you don't, it may never be anything but a dream.

They're not impressed.

It happens. The moment you decide to strike out on your own, you're thrilled, you're soaring and you start talking about it to your near and dear. But be prepared to be underwhelmed by the response.

Take your parents. While they'll cheer your lemonade stand and pet sitting efforts, most would rather see you get a 'real' job after college, instead of starting your own thing. Joining a startup is suspect too, unless you can show them your paystub and prove that you're not working for pizza and equity. If your college years are well behind you, then they'd rather you were thinking of your family, buying a home, your nest egg, heck, even your retirement. The only time your parents are happy with you being an entrepreneur is if you've already got all the money you may ever need (and they do too). Then they can boast about the fact that even though you are wealthy you started a business instead of sitting at the crap tables all day.

What about co-workers? Most think you're crazy to give up your job, and talk about how 'he always wanted to do his own thing', ' she had trouble fitting into the company culture' - as if they were all bad things. But they will throw a going-away party and give you gag gifts of aspirin and job listings, wish you luck and promise to keep in touch. You may even be on their holiday email list. They know to hedge their bets - if you make it, maybe you'd have a job for them. If you don't, they always knew that it was a bad move.

Friends, especially the really good ones who know you well, may be different. They will be happy if you are. Still you'll hear many words of caution, and questions on how you're going to support yourself. And if you're the stable, salaried one in your group, they're not going to be thrilled to have you join the ranks of those with unpredictable income who can be depended on to not pick up the check.

The good news? There are others like you out there. And if you live in certain places, like Silicon Valley, there are many, many people like you out there. Even if they think you may fail (statistics are not in your favor), they'll applaud your joining the club of those who were willing to take the risk. And that's really at the heart of all the reactions. The ones who worry that you want to be an entrepreneur do so because you're taking a risk. And the ones who congratulate you do so because it takes courage to take a risk.

I've been there and heard my family worry about my financial future, saw my co-workers bemused that I gave up my great job, my friends supportive but not really understanding why I was doing this, and only other entrepreneurs were cheering me on (unless they thought I could be competing with them). Sticking to your guns and going ahead with your plans in the face of much skepticism takes bull-headedness and confidence, not to mention a lot of passion and a willingness to make a fool of yourself.

Of course, if you've done it once, even moderately successfully, the perception of risk is reduced, and everyone thinks you're so smart to stick to what you're good at. But if you failed, and you're doing it again - hey what's wrong with you? You're lucky if you live in one of those places awash in startups, where people take a different view - no biggie, failure is just a 'great learning experience'. A true entrepreneur will be at it again. As long as you don't fail again.