Sleep is overrated. Necessary, but overrated. The faster a business owner can figure out how to hop out of bed an hour or two early, shake off the aches and grogginess, and tackle the day bright eyed and energetic, the faster their company will begin to take off.
There's the obvious benefit: extra hours in the day to Get Things Done; but there are also more subtle benefits that are even more valuable than the extra draft, blog post, phone call, or meeting that can be squeezed in with the extra time.
Morning people are pleased and inspired when they catch an entrepreneur up and working during their prime time. Later on, the night owls will be gratified to find that same entrepreneur burning the midnight oil. Stretching out the work day means impressing and raising the morale of more people, which translates directly into more people thinking about that entrepreneur's business and working to make it succeed. This network of subconsciously uplifted individuals can accomplish far more than any one person, no matter how passionate and well rested.
Plus, there are serious networking opportunities for those willing to be "at work" across the standard business hours of a variety of time zones.
To counterbalance the strain, it is also important to work Less during weekends. While I do encourage folks to go ahead and push their projects forward over the weekend, it's important to spend some time to recuperate and share a few stress free hours with loved ones. Doing so not only contributes to the mental health of the entrepreneur, their friends, and their family; it also contributes to the good will they have built up with others during the week.
Just as folks tend to like seeing business owners hard at work during all hours of the work week, they also like seeing those owners take it a bit easy during the weekend. It's the time culturally reserved for rest and recreation, and taking some of that time for that purpose humanizes the business owner who worked like a super hero throughout the previous week. Working a short four to six hour day on Saturday and Sunday means that the long weekdays are unlikely to be taken for granted by those who benefit from them.
Thus the image and the reality of a hard working, dependable, energetic, but human entrepreneur is established. People who manage to put forward that image, and live that reality, are exponentially more likely to inspire the best from each and every individual they encounter. And it is that kind of wide reaching support and good will which truly leads to success.
Wednesday, March 25, 2009
Wednesday, March 18, 2009
Time and Motion
As an entrepreneur there's one resource you can never have enough of and it's not cash, credit, space, or staff; it's time. There are 24 hours each day, 168 hours each week, 720 hours in the average month, 8760 hours each year and without proper planning, they slip through our fingers like sand. The life of an entrepreneur is perpetual urgency. Urgency colors every moment and every situation. It can turn a driven new business owner into a hysterical wreck if not properly managed, because urgency without focus, prioritization, and scheduling will lead the mind of an aspiring entrepreneur in so many directions, so quickly, that they will never accomplish anything no matter how hard they work or how passionate they are.
When founders of a new business sit down to talk priorities, time management almost never comes up in a productive way. The time based topics which are discussed generally have to do with some deadline they are placing on themselves and their company for when they absolutely must have this, that, or the other so they can move on to the next phase of kicking ass and taking names. This way of looking at time is a waste of that same resource. Before they can start maximizing the time they have, an entrepreneur must first recognize what powers they lack so that they can avoid wasting the life blood of their new venture attempting to dictate the timing of events over which they have limited control.
For instance, I have heard many people say something like "We're going to have our first $300,000 raised by June X which means we need to be ready to get that office building and start production by June Y." Unless it is June X and they are watching a check for $300,000 being signed by an investor, they cannot be sure that the prerequisite for their action statement will become true - they are letting wishful thinking sneak into their scheduling through their natural sense of urgency. Of course they want to achieve their funding goal and start production on a schedule they set, what entrepreneur wouldn't want that? Unfortunately, this is where positivity crosses into blind optimism, and hurts a new company.
The founders from the above sample are now likely to not only continue wasting time on a conversation based on an erroneous assumption, they are also likely to waste subsequent time investigating and securing office space and planning for the hiring of staff, the need for which will simply be delayed by their misguided assumptions as to what they can and cannot schedule effectively.
An entrepreneur who wants to succeed must drop from their schedule anything which requires third parties, known or unknown, over which they do not have direct control. I would suggest that this means only scheduling events which the founders themselves can cause to occur without the assistance of anyone who has not voluntarily committed to accomplish something on behalf of the new company and who has proven that they can deliver on their commitments. Knowing what not to include in the schedule is vital, but is only one prerequisite for effectively managing a new company's most important resource.
Once they have a clear picture of what they can and cannot put a date on, a new entrepreneur must face up to a second set of limitations; those placed on them by their biological existence. Out of each 24 hour day, a certain portion must be set aside for sleep lest the new entrepreneur go mad before their time. Each person is different, but most require between four and eight hours each night to maintain mental stability and alertness. Time must also be written off for eating (even when there are not lunch meetings), hygiene tasks, and the love and care of any and all pets, spouse, children, parents, or other living beings which depend on the entrepreneur and on whose support the entrepreneur depends. If not deliberately planned for, these unavoidable responsibilities to life, love, and health can eat away all of a new company owner's time, their sanity, or both.
It is always better for an entrepreneur to address these important matters upfront in a maintainable way rather that realizing the night before a major conference that they have become a sleep deprived, smelly, half-starved, mess who's left all living beings who love them sad and lonely for an indeterminate period of time; that realization is a morale killer and can easily be avoided by some earlier realizations of a more helpful nature. A company owner is not the company they own. A company owner is a sentient biological creature which must be properly cared for physically, mentally, and emotionally or it will rot away and never be any use to themselves, those who love them, or the fantastic and inspiring idea behind their company.
Once an entrepreneur has faced the two issues of what they can't do, and what they can't do without, they can finally get an accurate picture of the next important step in effective time management; long term goals. Entrepreneurs love making long term goals, and once the two established types of pit falls are addressed they can generally do a fine job of identifying what goals to set for their company to insure that it has the best possible chance at success.
From these long term goals, medium term goals can be established, and from these the day to day goals will come. For instance, if a long term goal is to have a business plan ready to submit to a Venture Capital group in six months, medium term goals would be things like "Financial Projections Complete in Week One", "First Draft Complete in Week Three", "15 Family and Friend Reviews in Week Four", etc. Day to day goals would then easily present themselves: day 1 week one, "Put Together Staff and Employee Tax Estimates", day 1 week two "Executive Summary First Draft", day 1 week four "Ask Spouse, 2 Kids, and Aunt Jude to Critique Draft".
The very process of learning to manage their own time makes an entrepreneur better at managing their business once other people are involved. A company owner must perpetually effectively analyze the needs of their company, the needs of the individuals working for that company, and the limitations of both in the long, medium, and short term in order to drive their business to excellence rather than ruin. No other resource can make up for a faulty approach to time management. An infinite amount of capital, equipment, space, and staff can be squandered on a company no matter how fantastic their product concept, if the owners do not approach time management and scheduling in a consistently logical and methodical manner.
When founders of a new business sit down to talk priorities, time management almost never comes up in a productive way. The time based topics which are discussed generally have to do with some deadline they are placing on themselves and their company for when they absolutely must have this, that, or the other so they can move on to the next phase of kicking ass and taking names. This way of looking at time is a waste of that same resource. Before they can start maximizing the time they have, an entrepreneur must first recognize what powers they lack so that they can avoid wasting the life blood of their new venture attempting to dictate the timing of events over which they have limited control.
For instance, I have heard many people say something like "We're going to have our first $300,000 raised by June X which means we need to be ready to get that office building and start production by June Y." Unless it is June X and they are watching a check for $300,000 being signed by an investor, they cannot be sure that the prerequisite for their action statement will become true - they are letting wishful thinking sneak into their scheduling through their natural sense of urgency. Of course they want to achieve their funding goal and start production on a schedule they set, what entrepreneur wouldn't want that? Unfortunately, this is where positivity crosses into blind optimism, and hurts a new company.
The founders from the above sample are now likely to not only continue wasting time on a conversation based on an erroneous assumption, they are also likely to waste subsequent time investigating and securing office space and planning for the hiring of staff, the need for which will simply be delayed by their misguided assumptions as to what they can and cannot schedule effectively.
An entrepreneur who wants to succeed must drop from their schedule anything which requires third parties, known or unknown, over which they do not have direct control. I would suggest that this means only scheduling events which the founders themselves can cause to occur without the assistance of anyone who has not voluntarily committed to accomplish something on behalf of the new company and who has proven that they can deliver on their commitments. Knowing what not to include in the schedule is vital, but is only one prerequisite for effectively managing a new company's most important resource.
Once they have a clear picture of what they can and cannot put a date on, a new entrepreneur must face up to a second set of limitations; those placed on them by their biological existence. Out of each 24 hour day, a certain portion must be set aside for sleep lest the new entrepreneur go mad before their time. Each person is different, but most require between four and eight hours each night to maintain mental stability and alertness. Time must also be written off for eating (even when there are not lunch meetings), hygiene tasks, and the love and care of any and all pets, spouse, children, parents, or other living beings which depend on the entrepreneur and on whose support the entrepreneur depends. If not deliberately planned for, these unavoidable responsibilities to life, love, and health can eat away all of a new company owner's time, their sanity, or both.
It is always better for an entrepreneur to address these important matters upfront in a maintainable way rather that realizing the night before a major conference that they have become a sleep deprived, smelly, half-starved, mess who's left all living beings who love them sad and lonely for an indeterminate period of time; that realization is a morale killer and can easily be avoided by some earlier realizations of a more helpful nature. A company owner is not the company they own. A company owner is a sentient biological creature which must be properly cared for physically, mentally, and emotionally or it will rot away and never be any use to themselves, those who love them, or the fantastic and inspiring idea behind their company.
Once an entrepreneur has faced the two issues of what they can't do, and what they can't do without, they can finally get an accurate picture of the next important step in effective time management; long term goals. Entrepreneurs love making long term goals, and once the two established types of pit falls are addressed they can generally do a fine job of identifying what goals to set for their company to insure that it has the best possible chance at success.
From these long term goals, medium term goals can be established, and from these the day to day goals will come. For instance, if a long term goal is to have a business plan ready to submit to a Venture Capital group in six months, medium term goals would be things like "Financial Projections Complete in Week One", "First Draft Complete in Week Three", "15 Family and Friend Reviews in Week Four", etc. Day to day goals would then easily present themselves: day 1 week one, "Put Together Staff and Employee Tax Estimates", day 1 week two "Executive Summary First Draft", day 1 week four "Ask Spouse, 2 Kids, and Aunt Jude to Critique Draft".
The very process of learning to manage their own time makes an entrepreneur better at managing their business once other people are involved. A company owner must perpetually effectively analyze the needs of their company, the needs of the individuals working for that company, and the limitations of both in the long, medium, and short term in order to drive their business to excellence rather than ruin. No other resource can make up for a faulty approach to time management. An infinite amount of capital, equipment, space, and staff can be squandered on a company no matter how fantastic their product concept, if the owners do not approach time management and scheduling in a consistently logical and methodical manner.
Thursday, March 5, 2009
Perfect Pitch
When trying to go from an unknown company founder to an investment-ready entrepreneur there are three things which it is vital that one prepare.
First, the pitch. A pitch is a perfect paragraph that grabs the attention of the audience and directs it toward your project.
Second, the Executive Summary. This is a single page which establishes all of the fundamental information of your venture. It should aim to answer the first questions that your audience will have about your venture, and to build their interest to the point where they have an active desire to read the third important item: your business plan.
Once these three important components have been completed they should be flame tested by every intelligent person who you can persuade to offer you feedback. Only then are you truly prepared to face an investor.
I am the type of person who traces mazes backwards; therefore, it should be no surprise that I completed and flame tested the business plan for my company, then the executive summary, and am now left with nothing but the daunting prospect of creating the perfect pitch.
In the modern world of digital social networking, a perfect pitch should not only be something one can deliver during the course of an elevator ride, it should also be something which can be captured and transmitted into the vast maw of the web where it will generate interest from a wide spectrum of humanity and focus that interest on the amazing plans and potential of one's venture.
I have given countless verbal presentations on my company. My ability to speak on the virtues and potential of Multi Axis Games knows no bounds. I have spoken to hundreds of people for thousands of hours on the subject; however, I have never boiled it down to the perfect sound bite.
Obviously, the purpose of the pitch is to generate the kind of interest which can be nurtured into the support necessary to make this company a success.
I could focus on the wide reaching social effects that MxG will create; talk about the enormous good which will be done once MxG is generating revenues and focusing half of those revenues on humanitarian efforts throughout the world.
I could focus on how our design principles will result in games which revolutionize the MMO experience; talk about how designing content to appeal to everyone and delivering that content via code that eliminates lag through structured data prioritization will expand an already vast market and deliver a richer and more rewarding experience to players.
I could focus on the economic responsibility of our budget which creates a large number of permanent salaried jobs with health benefits to utilize the huge glut of brilliant unemployed.
I could focus on how our corporate structure offers investors all of the transparency and protections of a publicly traded company as well as the stability of a private company, immune to market fluctuations.
I could focus on the staggering profit potential of a market totally untended by the genuine creativity desperately desired by its steadily growing consumer base.
Responsibility, fun, profit, safety; I am left debating at which angle to display my company so that all of the important factors will be appropriately transmitted and appreciated. I am simply unwilling to accept that even in a Twitter world, no one has the attention span to perceive and grok a complex message. We must still able to pursue a meaningful existence which cannot be boiled down to 140 characters or a five minute sound bite.
I will overcome my basic frustration with having to refine a plan, for which I feel such passion that I have dedicated my life to seeing its fruition, to a palatable set of sound bites. I will deliver said media nugget to you for easy consumption; however, if I have attracted your attention here with this pre multimedia transmission, I hope that you will let me hear your thoughts: what do you think I should speak on in my first five minute transmission?
First, the pitch. A pitch is a perfect paragraph that grabs the attention of the audience and directs it toward your project.
Second, the Executive Summary. This is a single page which establishes all of the fundamental information of your venture. It should aim to answer the first questions that your audience will have about your venture, and to build their interest to the point where they have an active desire to read the third important item: your business plan.
Once these three important components have been completed they should be flame tested by every intelligent person who you can persuade to offer you feedback. Only then are you truly prepared to face an investor.
I am the type of person who traces mazes backwards; therefore, it should be no surprise that I completed and flame tested the business plan for my company, then the executive summary, and am now left with nothing but the daunting prospect of creating the perfect pitch.
In the modern world of digital social networking, a perfect pitch should not only be something one can deliver during the course of an elevator ride, it should also be something which can be captured and transmitted into the vast maw of the web where it will generate interest from a wide spectrum of humanity and focus that interest on the amazing plans and potential of one's venture.
I have given countless verbal presentations on my company. My ability to speak on the virtues and potential of Multi Axis Games knows no bounds. I have spoken to hundreds of people for thousands of hours on the subject; however, I have never boiled it down to the perfect sound bite.
Obviously, the purpose of the pitch is to generate the kind of interest which can be nurtured into the support necessary to make this company a success.
I could focus on the wide reaching social effects that MxG will create; talk about the enormous good which will be done once MxG is generating revenues and focusing half of those revenues on humanitarian efforts throughout the world.
I could focus on how our design principles will result in games which revolutionize the MMO experience; talk about how designing content to appeal to everyone and delivering that content via code that eliminates lag through structured data prioritization will expand an already vast market and deliver a richer and more rewarding experience to players.
I could focus on the economic responsibility of our budget which creates a large number of permanent salaried jobs with health benefits to utilize the huge glut of brilliant unemployed.
I could focus on how our corporate structure offers investors all of the transparency and protections of a publicly traded company as well as the stability of a private company, immune to market fluctuations.
I could focus on the staggering profit potential of a market totally untended by the genuine creativity desperately desired by its steadily growing consumer base.
Responsibility, fun, profit, safety; I am left debating at which angle to display my company so that all of the important factors will be appropriately transmitted and appreciated. I am simply unwilling to accept that even in a Twitter world, no one has the attention span to perceive and grok a complex message. We must still able to pursue a meaningful existence which cannot be boiled down to 140 characters or a five minute sound bite.
I will overcome my basic frustration with having to refine a plan, for which I feel such passion that I have dedicated my life to seeing its fruition, to a palatable set of sound bites. I will deliver said media nugget to you for easy consumption; however, if I have attracted your attention here with this pre multimedia transmission, I hope that you will let me hear your thoughts: what do you think I should speak on in my first five minute transmission?
Monday, March 2, 2009
Chaebol: A Dominant Capitalist System
You may not know what chaebol are, but they have an enormous impact on the world you live in. If you are an active member of the American business community then you probably already know that the biggest problem with U.S. business is the disconnect between entrepreneurs and the capital they need to pursue their innovations. There is a wealth of investors with ready capital, and a glut of entrepreneurs who want to innovate, but when these two vital economic entities connect it is more often by chance than by design. Human nature leads us to assume that this is the way business is conducted by all capitalist nations, but this perception of a level international playing field is illusory.
A chaebol is a South Korean business conglomerate. A business conglomerate is a group of businesses which are interconnected. In Japan, large conglomerates are referred to as keiretsu, such as the Fuyo keiretsu which contains two private banks as well as Canon, Hitachi, Nissan, and Yamaha, just to name a few of the companies known well in this country. In South Korea, chaebol make up almost 100% of the economy.
Each chaebol produces billions of dollars in revenue each year and is made up of a multitude of sub-companies with semi-independent goals. The Samsung chaebol, for example, contains at least 13 electronics companies, 3 machinery and heavy industry companies, 5 chemical companies, 6 financial services companies, 3 retail services companies, 3 engineering and construction companies, 7 entertainment companies, and at least 15 various other companies, research institutes, or organizations of other types.
Because of the complete domination of the South Korean economy by the chaebol, innovators in South Korea know exactly what to do in order to pursue their ideas.
American innovators spend years working without support or resources, attempting to jump through a confusing array of hoops for the chance that they will be noticed by someone with the capital to fund their innovation; almost all still fall through the vast cracks in our economy regardless of the quality of their concept.
A South Korean innovator can simply select a chaebol, get a meeting, and pitch their idea to a person who actually has the means to get them started developing their venture. The chaebol economy leaves no room for hordes of con artists to manipulate and confuse innovators by taking advantage of the disconnect between entrepreneurs and investors – no such disconnect exists.
There are drawbacks to the system. For instance, each chaebol is centrally controlled by a family, meaning that if you are not a member of one of the chaebol families then there is a limit to how high in the management structure of a chaebol you can reach. Also, while an innovator can obtain recognition and some profit from a venture they develop through a chaebol, the vast majority of the profit from their first venture will go to the chaebol; however, each success will grant said innovator more power and recognition within the chaebol and earn them a larger share of the profits from future ventures.
None of this is meant to imply that a chaebol system is the ideal capitalist structure, merely that is has eliminated one of the biggest impediments to innovation and economic prosperity, and therefore deserves to be studied, especially by those of us wishing to have a positive effect on our own system. For an examination of the growth of the U.S. economy from 1900 to present, take a look at this post.
A chaebol is a South Korean business conglomerate. A business conglomerate is a group of businesses which are interconnected. In Japan, large conglomerates are referred to as keiretsu, such as the Fuyo keiretsu which contains two private banks as well as Canon, Hitachi, Nissan, and Yamaha, just to name a few of the companies known well in this country. In South Korea, chaebol make up almost 100% of the economy.
Each chaebol produces billions of dollars in revenue each year and is made up of a multitude of sub-companies with semi-independent goals. The Samsung chaebol, for example, contains at least 13 electronics companies, 3 machinery and heavy industry companies, 5 chemical companies, 6 financial services companies, 3 retail services companies, 3 engineering and construction companies, 7 entertainment companies, and at least 15 various other companies, research institutes, or organizations of other types.
Because of the complete domination of the South Korean economy by the chaebol, innovators in South Korea know exactly what to do in order to pursue their ideas.
American innovators spend years working without support or resources, attempting to jump through a confusing array of hoops for the chance that they will be noticed by someone with the capital to fund their innovation; almost all still fall through the vast cracks in our economy regardless of the quality of their concept.
A South Korean innovator can simply select a chaebol, get a meeting, and pitch their idea to a person who actually has the means to get them started developing their venture. The chaebol economy leaves no room for hordes of con artists to manipulate and confuse innovators by taking advantage of the disconnect between entrepreneurs and investors – no such disconnect exists.
There are drawbacks to the system. For instance, each chaebol is centrally controlled by a family, meaning that if you are not a member of one of the chaebol families then there is a limit to how high in the management structure of a chaebol you can reach. Also, while an innovator can obtain recognition and some profit from a venture they develop through a chaebol, the vast majority of the profit from their first venture will go to the chaebol; however, each success will grant said innovator more power and recognition within the chaebol and earn them a larger share of the profits from future ventures.
None of this is meant to imply that a chaebol system is the ideal capitalist structure, merely that is has eliminated one of the biggest impediments to innovation and economic prosperity, and therefore deserves to be studied, especially by those of us wishing to have a positive effect on our own system. For an examination of the growth of the U.S. economy from 1900 to present, take a look at this post.
Sunday, March 1, 2009
Rookie Mistakes: A Start-Up Guide
During this time of economic woe, many are lamenting their current circumstances and despairing for their future. As the owner of a baby company who has been struggling for several years against the fierce odds that face all entrepreneurs, I seem to be less daunted than many by the prospect of the future. I have been through so much, and learned so much in recent years, that I feel strong and prepared when looking ahead.
The economy is in shambles, and we will all have hard days ahead, but I still believe that new businesses must be established, grow, and succeed for all of our future days to be brighter. In the spirit of moving forward together, I have decided to jot down a few of the mistakes I have made and the lessons I have learned in my quest for success, in the hopes that others will be able to benefit from my experiences, and avoid the worst of entrepreneurship themselves.
Building the Team
The most important part of any business is the people which make it up. When recruiting a team to help you strive for your dreams, remember that they have dreams of their own which they may not be sharing with you, and which may conflict directly with what you are trying to accomplish. You may not think that each individual’s ambitions, priorities, and morality will affect your venture, but they will.
Each member of your initial team is a member of your family. Get to know their dreams, their fears, their priorities, goals, and ambitions as well as you know your own. When your team is happy, healthy, and productive, so is your venture; when they are fearful, miserable, and depressed your company will begin to fall apart under the strain. Do not be fooled by a winning personality and unflinching optimism. If an individual cannot give you an honest and scathing critique, then they will not be an asset to your company. They will smile and tell you how amazing you are while the actual function of your company flounders and your dream dies.
You are responsible for your team. Just by dedicating their time and energy to your project, they are investing in your company. Keep that in mind, and respect it when they say they cannot invest any more in a given day, week, or month. You are the source of their morale. If they are not inspired to do good work for you, then you have to ask yourself some basic questions:
* Have I conveyed the gravity of my Big Idea to them clearly and completely?
* Have I put too much weight on their shoulders without insuring that they have the support and resources they need to succeed?
* Am I sure that I understand what’s important to this person?
* Has something about their life changed that I am failing to take into account?
Sometimes you will end up with a team member that is a detriment to your venture. If you’ve been responsible in your recruiting methods then you may be so invested in this person that you will not want to admit to yourself that they cannot be made to be an asset to the venture. It’s important in these situations to have an accurate idea of how much time you have spent working with them on their productivity issues, and how many tactics you have attempted to get them up to speed. Once you have spent as much time trying to get a single team member productive as it would have taken you to recruit and train two team members, it’s time to stop spending your business’s time on them. You can still be their friend, and you can still spend your personal time trying to help them work through their issues, but it is best to let go of the idea of their ever making a significant contribution to your venture.
Connecting with Your Tribe
Next to your core team, your support network is your most important asset as an entrepreneur. Even if you do not live in a start-up hive like Silicon Valley, you will still find the most diverse and dedicated supporters in your local community. Get involved in local business associations and build relationships with effective people in your community. When you find yourself in need of contacts and resources, they are likely to be the first to answer, because the economic success of your venture will bring economic prosperity to the community you share.
Depending on the size of your community, there maybe more associations, organizations, and networking events than you can possibly attend and still attend to the needs of your business. Perhaps you will find that one of your team members has the right kind of personality to be your representative at events, but you will probably find that you are the best face for your company. It’s important to prioritize what events you attend and what organizations you involve yourself with.
Free events are superior to events you have to pay to attend for the most part, as they will present opportunities for you to make and build on relationships without putting a financial burden on you or your new business. Look for organizations whose premise you personally support, or which are geared specifically to business owners. Limit the amount of time you dedicate to attending new events, but find an organization or two which meets regularly so that you can form a long term connection with the entire group. Remember, bigger is not always better when networking for your business. You will not have a chance to meet and get to know many people in an event with hundreds of people in attendance. If you walk into an event and there are fifty people in attendance, then you have hit the sweet spot. With a good attitude and a little energy, you can share a significant one on one meeting with each person there and end up with lots of new contacts to follow up with later.
Value and Expertise
Once you have established yourself as the owner of a start-up business, it will seem like everyone and their cousin has some product or service which they absolutely have to sell your company. Do not pay a single penny unless you know for certain what value will be added to your company through your purchase. If the value is speculative, do not pay. If you have to rely on the seller’s word for the value, do not pay. If they are rushing you to make a decision, do not pay. When in doubt, do not pay.
Some services do add value to your company, but for the most part they only come in two forms: legal and accounting. You should be prepared to pay for some amount of legal counsel and some accounting work during your first year as a business owner, even if you have not put out a single product. It is absolutely better to be safe than sorry when dealing with law or when dealing with money; however, not all attorneys or accountants are created equal. Get a recommendation from someone that you trust. The best recommendations will come from business owners who have already gone through the start-up struggle you’re experiencing. Do not be afraid to approach a successful business owner who you trust for a recommendation, even if you have only spoken with them at local meetings or events.
Expert advice is pricey. As an entrepreneur, it is best for you to do the research and train yourself to do everything you think you want an attorney or accountant to do for you, and then have the paid expert check your work. They may have to start over from scratch, but they will be able to explain to you why which will give you a better handle for doing it yourself the next time. There are a lot of valuable resources out there, but it takes a lot of reading and cross checking to be sure you’re following the right instructions. Being a business owner means doing a lot of research and learning. Remember, when you figure out that you have to start over at a critical task, that’s not the time to slow down! The faster you pick yourself up and tackle the task again, the sooner you will see success.
Finding Funding
I cannot offer you a map to the treasure chest which is investment for a start-up company, but I can tell you the routes which will never lead to success and some which might. The aspect of American capitalism most in need of retooling is the connection between start-up companies and investors, so be prepared for this to be the most grueling task you will face. There are a huge number of investors in the U.S. and exponentially more individuals with business plans who want investors’ attention. If you jump in the deep end with your Big Idea and your need for funding, the most likely result is your business plan lining very nice trash cans without ever being opened. The next most likely result is you annoying an investor and then having your business plan ignored.
There are more con artists than can possibly be quantified in this world. Half are stealing attention that might otherwise belong to your business by trying to con investors out of their money. The other half are trying to put squeeze money out of entrepreneurs by promising a sure-fire way to get Your special and perfect business proposal in front of hordes of investors who are sure to burry you in cash. Do not pay them a single dollar.
I know it will be tempting to try anything and everything to get your business the investment it needs, so I’m going to list all of the ways that I can personally guarantee are less likely to work than buying a lottery ticket. When someone tries to sell you one of these strategies, either ignore them or laugh, whichever gives you the energy you need to work on your company without them.
Cold calling, call centers, and accredited investor lists. Investors hate this. Think about it. As soon as you embrace this technique, you are becoming the telemarketer that disturbs your dinner to try and sell you something you knew you didn’t want before you picked up the phone. Paying for a call center is even worse. Then you can be sure that the people calling the investors will not care about your business or the investor. The only way that cold calling is ever productive is if you call people In Your Area and set up an appointment to meet with them in person to present your venture to them at a later date.
Direct mail and email. Sending VCs or Angel investors your business plan without any referral or introduction is a great way to fill up trash cans without your venture ever being looked at. Investors are so overwhelmed with unsolicited submissions that they either throw them away, or pay someone to throw them away. Email is ever so slightly more likely to be seen, but only the email itself and not whatever attached presentation you have labored on for hours. If you want to try pursuing a promising investment lead through email, be sure that the email itself attracts and builds interest in your company. Being concise is very important. If you can boil down the essence of your Big Idea into a single sentence, then you may get some real attention, but do not count on it. VC firms which allow the submission of business plans also go in this category, although they are more likely to reply. If you do get a reply, they will either want upfront fees (it’s a scam, walk away) or they will let you know that they are uninterested in the venture. Do not just let them say “no,” always try to get an honest review of your submission so that you can improve your business plan and personal presentation.
Websites and online communities. You can easily find twenty different web communities that purport themselves to be the solution to the entrepreneur / investor problem. They will perform matchmaking, business rating, plan polishing, pitch tuning, and any number of other services. They make their websites appear to make it easier for the investors to select the business ideas that are most suited to them, but in reality these websites do not have investors to offer. Either they do not screen “investors” which will result in your business being inundated with advertisements from con artists claiming to be investors, investor representatives, or brokers; or they will screen investors and will have a handful of investor members who never check the site for every 300,000 entrepreneurs posting business plans.
In the end, there are few good ways to connect with potential investors. The best way to get an investor to give your business real attention is to have it personally recommended to them by someone that they trust. Build relationships with a variety of effective people, letting them know how great your business is and how important it is to you. If you’re working hard, working smart, and building solid relationships eventually someone you know will be inspired to tell someone they know who will tell someone they know, etc. If you get frustrated, just take some deep breaths, get out there, and connect with more people.
I hope you find this information useful and will be able to avoid some of the disappointment I have had to experience figuring all this out the hard way. If you’ve learned other lessons about entrepreneurship, or have any questions, I would love to hear them.
The economy is in shambles, and we will all have hard days ahead, but I still believe that new businesses must be established, grow, and succeed for all of our future days to be brighter. In the spirit of moving forward together, I have decided to jot down a few of the mistakes I have made and the lessons I have learned in my quest for success, in the hopes that others will be able to benefit from my experiences, and avoid the worst of entrepreneurship themselves.
Building the Team
The most important part of any business is the people which make it up. When recruiting a team to help you strive for your dreams, remember that they have dreams of their own which they may not be sharing with you, and which may conflict directly with what you are trying to accomplish. You may not think that each individual’s ambitions, priorities, and morality will affect your venture, but they will.
Each member of your initial team is a member of your family. Get to know their dreams, their fears, their priorities, goals, and ambitions as well as you know your own. When your team is happy, healthy, and productive, so is your venture; when they are fearful, miserable, and depressed your company will begin to fall apart under the strain. Do not be fooled by a winning personality and unflinching optimism. If an individual cannot give you an honest and scathing critique, then they will not be an asset to your company. They will smile and tell you how amazing you are while the actual function of your company flounders and your dream dies.
You are responsible for your team. Just by dedicating their time and energy to your project, they are investing in your company. Keep that in mind, and respect it when they say they cannot invest any more in a given day, week, or month. You are the source of their morale. If they are not inspired to do good work for you, then you have to ask yourself some basic questions:
* Have I conveyed the gravity of my Big Idea to them clearly and completely?
* Have I put too much weight on their shoulders without insuring that they have the support and resources they need to succeed?
* Am I sure that I understand what’s important to this person?
* Has something about their life changed that I am failing to take into account?
Sometimes you will end up with a team member that is a detriment to your venture. If you’ve been responsible in your recruiting methods then you may be so invested in this person that you will not want to admit to yourself that they cannot be made to be an asset to the venture. It’s important in these situations to have an accurate idea of how much time you have spent working with them on their productivity issues, and how many tactics you have attempted to get them up to speed. Once you have spent as much time trying to get a single team member productive as it would have taken you to recruit and train two team members, it’s time to stop spending your business’s time on them. You can still be their friend, and you can still spend your personal time trying to help them work through their issues, but it is best to let go of the idea of their ever making a significant contribution to your venture.
Connecting with Your Tribe
Next to your core team, your support network is your most important asset as an entrepreneur. Even if you do not live in a start-up hive like Silicon Valley, you will still find the most diverse and dedicated supporters in your local community. Get involved in local business associations and build relationships with effective people in your community. When you find yourself in need of contacts and resources, they are likely to be the first to answer, because the economic success of your venture will bring economic prosperity to the community you share.
Depending on the size of your community, there maybe more associations, organizations, and networking events than you can possibly attend and still attend to the needs of your business. Perhaps you will find that one of your team members has the right kind of personality to be your representative at events, but you will probably find that you are the best face for your company. It’s important to prioritize what events you attend and what organizations you involve yourself with.
Free events are superior to events you have to pay to attend for the most part, as they will present opportunities for you to make and build on relationships without putting a financial burden on you or your new business. Look for organizations whose premise you personally support, or which are geared specifically to business owners. Limit the amount of time you dedicate to attending new events, but find an organization or two which meets regularly so that you can form a long term connection with the entire group. Remember, bigger is not always better when networking for your business. You will not have a chance to meet and get to know many people in an event with hundreds of people in attendance. If you walk into an event and there are fifty people in attendance, then you have hit the sweet spot. With a good attitude and a little energy, you can share a significant one on one meeting with each person there and end up with lots of new contacts to follow up with later.
Value and Expertise
Once you have established yourself as the owner of a start-up business, it will seem like everyone and their cousin has some product or service which they absolutely have to sell your company. Do not pay a single penny unless you know for certain what value will be added to your company through your purchase. If the value is speculative, do not pay. If you have to rely on the seller’s word for the value, do not pay. If they are rushing you to make a decision, do not pay. When in doubt, do not pay.
Some services do add value to your company, but for the most part they only come in two forms: legal and accounting. You should be prepared to pay for some amount of legal counsel and some accounting work during your first year as a business owner, even if you have not put out a single product. It is absolutely better to be safe than sorry when dealing with law or when dealing with money; however, not all attorneys or accountants are created equal. Get a recommendation from someone that you trust. The best recommendations will come from business owners who have already gone through the start-up struggle you’re experiencing. Do not be afraid to approach a successful business owner who you trust for a recommendation, even if you have only spoken with them at local meetings or events.
Expert advice is pricey. As an entrepreneur, it is best for you to do the research and train yourself to do everything you think you want an attorney or accountant to do for you, and then have the paid expert check your work. They may have to start over from scratch, but they will be able to explain to you why which will give you a better handle for doing it yourself the next time. There are a lot of valuable resources out there, but it takes a lot of reading and cross checking to be sure you’re following the right instructions. Being a business owner means doing a lot of research and learning. Remember, when you figure out that you have to start over at a critical task, that’s not the time to slow down! The faster you pick yourself up and tackle the task again, the sooner you will see success.
Finding Funding
I cannot offer you a map to the treasure chest which is investment for a start-up company, but I can tell you the routes which will never lead to success and some which might. The aspect of American capitalism most in need of retooling is the connection between start-up companies and investors, so be prepared for this to be the most grueling task you will face. There are a huge number of investors in the U.S. and exponentially more individuals with business plans who want investors’ attention. If you jump in the deep end with your Big Idea and your need for funding, the most likely result is your business plan lining very nice trash cans without ever being opened. The next most likely result is you annoying an investor and then having your business plan ignored.
There are more con artists than can possibly be quantified in this world. Half are stealing attention that might otherwise belong to your business by trying to con investors out of their money. The other half are trying to put squeeze money out of entrepreneurs by promising a sure-fire way to get Your special and perfect business proposal in front of hordes of investors who are sure to burry you in cash. Do not pay them a single dollar.
I know it will be tempting to try anything and everything to get your business the investment it needs, so I’m going to list all of the ways that I can personally guarantee are less likely to work than buying a lottery ticket. When someone tries to sell you one of these strategies, either ignore them or laugh, whichever gives you the energy you need to work on your company without them.
Cold calling, call centers, and accredited investor lists. Investors hate this. Think about it. As soon as you embrace this technique, you are becoming the telemarketer that disturbs your dinner to try and sell you something you knew you didn’t want before you picked up the phone. Paying for a call center is even worse. Then you can be sure that the people calling the investors will not care about your business or the investor. The only way that cold calling is ever productive is if you call people In Your Area and set up an appointment to meet with them in person to present your venture to them at a later date.
Direct mail and email. Sending VCs or Angel investors your business plan without any referral or introduction is a great way to fill up trash cans without your venture ever being looked at. Investors are so overwhelmed with unsolicited submissions that they either throw them away, or pay someone to throw them away. Email is ever so slightly more likely to be seen, but only the email itself and not whatever attached presentation you have labored on for hours. If you want to try pursuing a promising investment lead through email, be sure that the email itself attracts and builds interest in your company. Being concise is very important. If you can boil down the essence of your Big Idea into a single sentence, then you may get some real attention, but do not count on it. VC firms which allow the submission of business plans also go in this category, although they are more likely to reply. If you do get a reply, they will either want upfront fees (it’s a scam, walk away) or they will let you know that they are uninterested in the venture. Do not just let them say “no,” always try to get an honest review of your submission so that you can improve your business plan and personal presentation.
Websites and online communities. You can easily find twenty different web communities that purport themselves to be the solution to the entrepreneur / investor problem. They will perform matchmaking, business rating, plan polishing, pitch tuning, and any number of other services. They make their websites appear to make it easier for the investors to select the business ideas that are most suited to them, but in reality these websites do not have investors to offer. Either they do not screen “investors” which will result in your business being inundated with advertisements from con artists claiming to be investors, investor representatives, or brokers; or they will screen investors and will have a handful of investor members who never check the site for every 300,000 entrepreneurs posting business plans.
In the end, there are few good ways to connect with potential investors. The best way to get an investor to give your business real attention is to have it personally recommended to them by someone that they trust. Build relationships with a variety of effective people, letting them know how great your business is and how important it is to you. If you’re working hard, working smart, and building solid relationships eventually someone you know will be inspired to tell someone they know who will tell someone they know, etc. If you get frustrated, just take some deep breaths, get out there, and connect with more people.
I hope you find this information useful and will be able to avoid some of the disappointment I have had to experience figuring all this out the hard way. If you’ve learned other lessons about entrepreneurship, or have any questions, I would love to hear them.
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