1) The People - A real entrepreneur has a story, an ora and a passion(s)! She is an interesting person by her very nature. Entrepreneurs are unique in that they are limited only by determination and imagination not money or environment.
2) The Process - Building teams with vision and drive has got to be one of the most rewarding experiences. Leveraging knowledge from a group breeds a larger vision and more market opportunities.
3) The Fix - In startups, you can recognize a problem today and have it fixed by tomorrow, try doing that at Microsoft.
4) The Network - Entrepreneurs hire entrepreneurs, they are resourceful, crafty and creative, throw them all in one room long enough and they WILL find a way to make it work.
5) The Ambition - skills can be taught but ambition is contagious. Doing your best 150% of the time is par for the course at a great startup.
6) The MacGyver in Everyone - While most companies are full of Captain Mo, yours is full of MacGyvers (Minus the mullets). Give your team a locked safe, a toothpick and a shoe string and watch them go!
7) The Money - There usually isn't any, so it's obvious everyone is there because they want to be and not because they have to be. This brings out the best in your team.
8) The Learning - Startups are a crash course in business. College is great but this is the real deal.
9) The Camaraderie - You find out who you can really count on when your back is against the wall.
10) The FUN! - Startups are an emotional rollercoaster but are serious fun. I have experienced more personal growth in 2 months in a startup than in 4 years of college.
Wednesday, December 3, 2008
Monday, December 1, 2008
The Art of Bootstrapping (From G.K.'s "How To Change The World" Blog"
Too much money is worse than too little for most organizations—not that I wouldn’t like to run a Super Bowl commercial someday. Until that day comes, the key to success for most organizations is bootstrapping. The term bootstrapping comes from the German legend of Baron von Munchhausen pulling himself out of the sea by pulling on his own bootstraps. That’s essentially what you’ll have to do, too.
1. Focus on cash flow, not profitability. The theory is that profits are the key to survival. If you could pay the bills with theories, this would be fine. The reality is that you pay bills with cash, so focus on cash flow. If you know you are going to bootstrap, you should start a business with a small upfront capital requirement, short sales cycles, short receivables terms, long payables terms, and recurring revenue. It means passing up the big sale that takes twelve months to close, deliver, and collect. Cash is not only king, it’s queen and prince too for a bootstrapper.
2. Forecast from the bottom up. Most entrepreneurs do a top-down forecast: There are 150 million cars in America. It sure seems reasonable that we can get a mere 1 percent of car owners to install our satellite radio systems. That’s 1.5 million systems in the first year. The bottom-up forecast goes like this: We can open up ten installation facilities in the first year. On an average day, each can install ten systems. So our first year sales will be 10 facilities x 10 systems x 240 days = 24,000 satellite radio systems. That’s a long way from the conservative 1.5 million systems in the top-down approach. Guess which number is more likely to happen.
3. Ship, then test. Perfect is the enemy of good enough. When your product or service is good enough, get it out, because cash flows when you start shipping. Besides, unwanted features, not perfection, come with more time. By shipping, youll also learn what your customers truly want you to fix. It’s definitely a trade-off your reputation versus cash flow so you can’t ship pure crap. But you can’t wait for perfection either. (Nota bene: life-science companies should ignore this recommendation.)
4. Forget the proven team. Proven teams are overrated—especially when most people define proven teams as people who worked for a billion-dollar company for the past ten years. These folks are accustomed to a certain lifestyle, and it’s not the bootstrapping lifestyle. Hire young, cheap, and hungry people—people with fast chips, but not necessarily a fully functional instruction set. Once you achieve significant cash flow, you can hire adult supervision. Until then, hire what you can afford and make them into great employees.
5. Start as a service business. Let’s say that you ultimately want to be a software company: People download your software or you send them CDs, and they pay you. That’s a nice, clean business with a proven business model. However, until you finish the software, you could provide consulting and services based on your work-in-progress software. This has two advantages: immediate revenue and true customer testing of your software. Once the software is field tested and battle hardened, flip the switch and become a product company.
6. Focus on function, not form. Mea culpa: I love good form. MacBooks, Audis, Graf skates, and Breitling watches. But bootstrappers focus on function, not form, when they are buying things. The function is computing, getting from point A to point B, skating, and knowing the time of day. These functions do not require the more expensive form. All the chair has to do is hold your butt. It doesn’t have to look as though it belongs in the Museum of Modern Art. Design great stuff, but buy cheap stuff.
7. Pick a few battles. Bootstrappers pick their battles. They don’t fight on all fronts because they cannot aff ord to. If you are starting a new church, do you really need a $100,000 multimedia audiovisual system? Or just a great message from the pulpit? If youre creating a content Web site based on the advertising model, do you have to write your own customer ad-serving software? I don’t think so.
8. Understaff. Many entrepreneurs staff up for what could happen, best case, even though they say they are being conservative. “Our conservative (albeit top-down) forecast for first-year satellite radio sales is 1.5 million units.We’d better create a 24/7 customer support center to handle this.” Guess what? You sell 15,000, but you do have 200 people hired, trained, and sitting in a 50,000-square-foot telemarketing center. Bootstrappers understaff knowing that all hell might break loose. But this would be, as we say in Silicon Valley, a high quality problem.
9. Go direct. The optimal number of mouths (or hands) between a bootstrapper and her customer is zero. Sure, stores provide great customer reach, and wholesalers provide distribution. But God invented e-commerce so that you could sell direct and reap greater margins. And God was doubly smart because She knew that by going direct, you’d also learn more about your customer’s needs. Stores and wholesalers fill demand, they don’t create it. If you create enough demand, you can always get other organizations to fill it later. If you don’t create demand, all the distribution in the world will get you nothing.
10. Position against the leader. Suppose that you don’t have the money to explain your story starting from scratch. Then don’t try. Instead, position against the leader. Toyota introduced the Lexus lines of cars by positioning them as being as good as a Mercedes but half the price. Toyota didn’t have to explain what as good as a Mercedes meant. How much do you think that saved it? “Poor man’s Bose noise-canceling headphones” would work, too.
Original Link Here
1. Focus on cash flow, not profitability. The theory is that profits are the key to survival. If you could pay the bills with theories, this would be fine. The reality is that you pay bills with cash, so focus on cash flow. If you know you are going to bootstrap, you should start a business with a small upfront capital requirement, short sales cycles, short receivables terms, long payables terms, and recurring revenue. It means passing up the big sale that takes twelve months to close, deliver, and collect. Cash is not only king, it’s queen and prince too for a bootstrapper.
2. Forecast from the bottom up. Most entrepreneurs do a top-down forecast: There are 150 million cars in America. It sure seems reasonable that we can get a mere 1 percent of car owners to install our satellite radio systems. That’s 1.5 million systems in the first year. The bottom-up forecast goes like this: We can open up ten installation facilities in the first year. On an average day, each can install ten systems. So our first year sales will be 10 facilities x 10 systems x 240 days = 24,000 satellite radio systems. That’s a long way from the conservative 1.5 million systems in the top-down approach. Guess which number is more likely to happen.
3. Ship, then test. Perfect is the enemy of good enough. When your product or service is good enough, get it out, because cash flows when you start shipping. Besides, unwanted features, not perfection, come with more time. By shipping, youll also learn what your customers truly want you to fix. It’s definitely a trade-off your reputation versus cash flow so you can’t ship pure crap. But you can’t wait for perfection either. (Nota bene: life-science companies should ignore this recommendation.)
4. Forget the proven team. Proven teams are overrated—especially when most people define proven teams as people who worked for a billion-dollar company for the past ten years. These folks are accustomed to a certain lifestyle, and it’s not the bootstrapping lifestyle. Hire young, cheap, and hungry people—people with fast chips, but not necessarily a fully functional instruction set. Once you achieve significant cash flow, you can hire adult supervision. Until then, hire what you can afford and make them into great employees.
5. Start as a service business. Let’s say that you ultimately want to be a software company: People download your software or you send them CDs, and they pay you. That’s a nice, clean business with a proven business model. However, until you finish the software, you could provide consulting and services based on your work-in-progress software. This has two advantages: immediate revenue and true customer testing of your software. Once the software is field tested and battle hardened, flip the switch and become a product company.
6. Focus on function, not form. Mea culpa: I love good form. MacBooks, Audis, Graf skates, and Breitling watches. But bootstrappers focus on function, not form, when they are buying things. The function is computing, getting from point A to point B, skating, and knowing the time of day. These functions do not require the more expensive form. All the chair has to do is hold your butt. It doesn’t have to look as though it belongs in the Museum of Modern Art. Design great stuff, but buy cheap stuff.
7. Pick a few battles. Bootstrappers pick their battles. They don’t fight on all fronts because they cannot aff ord to. If you are starting a new church, do you really need a $100,000 multimedia audiovisual system? Or just a great message from the pulpit? If youre creating a content Web site based on the advertising model, do you have to write your own customer ad-serving software? I don’t think so.
8. Understaff. Many entrepreneurs staff up for what could happen, best case, even though they say they are being conservative. “Our conservative (albeit top-down) forecast for first-year satellite radio sales is 1.5 million units.We’d better create a 24/7 customer support center to handle this.” Guess what? You sell 15,000, but you do have 200 people hired, trained, and sitting in a 50,000-square-foot telemarketing center. Bootstrappers understaff knowing that all hell might break loose. But this would be, as we say in Silicon Valley, a high quality problem.
9. Go direct. The optimal number of mouths (or hands) between a bootstrapper and her customer is zero. Sure, stores provide great customer reach, and wholesalers provide distribution. But God invented e-commerce so that you could sell direct and reap greater margins. And God was doubly smart because She knew that by going direct, you’d also learn more about your customer’s needs. Stores and wholesalers fill demand, they don’t create it. If you create enough demand, you can always get other organizations to fill it later. If you don’t create demand, all the distribution in the world will get you nothing.
10. Position against the leader. Suppose that you don’t have the money to explain your story starting from scratch. Then don’t try. Instead, position against the leader. Toyota introduced the Lexus lines of cars by positioning them as being as good as a Mercedes but half the price. Toyota didn’t have to explain what as good as a Mercedes meant. How much do you think that saved it? “Poor man’s Bose noise-canceling headphones” would work, too.
Original Link Here
Sunday, November 23, 2008
Dave Berkus on "The Frank Peters Show"
Check out Frank's interview with Dave Berkus
As Managing Partner of Kodiak Ventures, L.P., and of Berkus Technology Ventures, LLC, both early stage capital investment funds - and Chairman- Emeritus of the Tech Coast Angels, one of the largest angel investing networks in the United States, today Mr. Berkus is board chairman or board member of ten public and private technology companies. Active as investor or board member in a total of sixty-eight early stage companies since 1993, he was recognized as "Director of the Year - Early Stage Businesses" by the Forum for Corporate Directors of Orange County, California and as "Businessperson of the Year" by his alma mater, Occidental College.
Thanks Mr. Peters for the great video (www.thefrankpetersshow.com) and Mr. Berkus for the bio at http://www.berkus.com/bio.html
As Managing Partner of Kodiak Ventures, L.P., and of Berkus Technology Ventures, LLC, both early stage capital investment funds - and Chairman- Emeritus of the Tech Coast Angels, one of the largest angel investing networks in the United States, today Mr. Berkus is board chairman or board member of ten public and private technology companies. Active as investor or board member in a total of sixty-eight early stage companies since 1993, he was recognized as "Director of the Year - Early Stage Businesses" by the Forum for Corporate Directors of Orange County, California and as "Businessperson of the Year" by his alma mater, Occidental College.
Thanks Mr. Peters for the great video (www.thefrankpetersshow.com) and Mr. Berkus for the bio at http://www.berkus.com/bio.html
Friday, November 21, 2008
Thursday, November 20, 2008
Global Entrepreneurs Week Highlights
Tonight's event at SDSU with keynote speaker Troy Hazard was awesome. If you did not get a chance to attend, I took a few pictures with my iphone so that those not in attendance can see the venue.
The 4 schools worked well together and really pulled off a first class event. Thanks Guys and Gals.
I got a chance to catch up with Troy after the event. Troy is a genuinely super nice guy and a great pick for students and entrepreneurs.
Here are some pics!
Tuesday, November 18, 2008
"How to Not Hire Someone Via Craigslist" by G. Kawasaki
It wasn't too long ago that I used to attend lectures at Stanford where Guy Kawasaki would show up on the regular basis and promote his new book or just come in and speak on a topic or two in what appeared to be his spare time.
While I know not everyone agrees with Guy's views on the valley or investment, personally, I still find him fairly entertaining and inspiring from time to time.
I found this article on his blog that felt was very relevant to those hiring contractors off of Craigslist. My business partner and I had a nightmare experience with our last contract developer (who will remain nameless) that we hired from CL. Looking back it's hard to determine whose fault it was -
A) His for not being honest about his abilities
B) Ours, for not recognizing what our development needs really were at the time.
Regardless, Check out this link-
How to Not Hire Someone Via Craigslist
While I know not everyone agrees with Guy's views on the valley or investment, personally, I still find him fairly entertaining and inspiring from time to time.
I found this article on his blog that felt was very relevant to those hiring contractors off of Craigslist. My business partner and I had a nightmare experience with our last contract developer (who will remain nameless) that we hired from CL. Looking back it's hard to determine whose fault it was -
A) His for not being honest about his abilities
B) Ours, for not recognizing what our development needs really were at the time.
Regardless, Check out this link-
How to Not Hire Someone Via Craigslist
Check out GEW Events this week
Affiliated Events: Global Entrepreneur Week
Monday, November 17th
Invited Speaker: Andreas Roell, Geary Interactive,
Manchester Hall, 5:30pm-6:30pm
(RSVP)
Tuesday, November 18th
Invited Speaker: Stephen Thesing, Founder of Blue Chowder, 12pm:1:00pm
(Check Here)
Invited Speaker: Monty Dickinson, San Diego SCORE,
Atkinson Hall, 7pm- 8pm
Wednesday, November 19th
Entrepreneur Society Event
7pm-8:30pm in Arts and Letters 101
(Check here)
MIT Enterprise Forum of San Diego
5:00pm-7:30pm
Failure IS an Option: an evening of candor and compassion
(Register Here)
Thursday, November 20th
Join us at the assembling event, San Diego Entrepreneur Festival at SDSU AAC Hall of Fame 4:00-8:00 pm (RSVP Today)
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