BigBlueQ Blog

Some Random Insight For A Young Entrepreneur

Originally presented at Denison University to the Entrepreneur Club on April 8, 2009

1)      Unlike nearly every other career, you will never have an obvious roadmap.  You can get your MBA, you can read, you can seek advice, but your business, its trials and triumphs, and how you navigate each challenge, will be entirely unique to you.  Most people do not perform well with this high degree of risk coupled with the nearly limitless paths and choices at each step of the way.

 

2)      For your big idea, you will need a unique insight, which requires experience.  Setting out directly from college to become the “next Facebook” is basically a lottery-ticket approach to fast-track entrepreneurial success, with lottery odds.  It is much more likely that you’ll spend time working for an existing company, learning an industry and business, and come across an opportunity that is being under-served.  Your business will be born as you try to address this unmet need.  So this means you need to go get some experience, develop real-world expertise, and keep your eyes open for that opportunity.

 

3)      Pick a problem you enjoy solving.  You will spend a huge amount of time on this, so make sure you like it!

 

4)      As a general rule, if everyone else does something the same way, there’s probably a reason why.  This is not to say that there isn’t room for unconventional approaches and creativity in every aspect of how you build your business, but “Everyone Else” is smarter than you, so you’re a fool to dismiss them without understanding why the conventional way is the conventional way.

 

5)      Selling is what makes it a business.  There are two types of “entrepreneur”: the inventor and the salesperson.  Figure out which one you are, and if it is not the salesperson, you MUST get one.  You can have a functioning business without an inventor (or even a product you created or make yourself), but if you’re not selling, it isn’t a business.

 

6)      Concise, efficient, understandable communication is imperative.  This is mostly true for potential investors and clients, but also for internal communication with employees.  If you can’t pitch your business to investors compellingly in 60 seconds, you won’t even get a meeting with a decision-maker.  Selling to customers is more flexible, but the challenge is that each individual or company’s needs will vary, so you must adapt your pitch on-the-fly.  With a potential customer, if you’re doing more than half the talking, you’re failing.

 

7)      There must be a CEO that is the “decider”.  No management-by-committee, though a CEO that is not listening to the rest of the team is an idiot.

 

8)      CEO is a difficult, lonely job.  You’re steering the ship, and the reality is that you are more responsible for everything that goes wrong than you are for everything that goes right.  Once you’re responsible for someone’s compensation, career development, and for decisions that they will not always agree with which affect their lives, you can be friendly, but it is very hard to be friends.  You’re one of the few, maybe the only one, with the complete picture of why certain decisions are made, but you will be judged constantly by people with a more limited set of facts.  Some of your employees will think you’re an idiot or an ass, as will their husbands or wives.  For a community of professional peers, you must look outside your business to advisors and other entrepreneurs.

 

9)      You are not married to either the business or your role.  Make the right decisions for the development of the business, including knowing when you’re not right for a role (such as CEO) and replacing yourself.  Similarly, groom the business toward stable profitability and growth, making it attractive to a buyer or investors.  If you stay for 50 years, that’s OK, but don’t develop your business as your personal empire.  This point is particularly important if you pursue investment capital.

 

10)   Select business partners (co-owners) extremely carefully.  You should have complementary skills for the good of the business objective.  Friends and family can be problematic business partners.  Depending upon your business goals, picture what your roles and competencies would be like at 10, 20 or 50 employees, and ask yourself whether the potential partner is going to be able to deliver and be happy through these changing circumstances.  Ask yourself how you think the team will collaborate during hard times.  If a partnership becomes a problem, it is very hard to fix, and potentially fatal to your business.

 

11)   Network constantly.  Seek out opportunities to meet people who can help you or whom you can help in any capacity.  They may be potential customers, potential partners, potential investors, other entrepreneurs, and on and on.  As a founder and/or key leader in a start-up, much, maybe most, of your time should be external facing (engaging the outside world), rather than working in your cave perfecting a product.

 

12)   The only reason to pursue investment is that the opportunity requires that you scale faster than is possible with bootstrapping.  If it is at all possible, bootstrapping is better.  Reasons: a) you develop the discipline you need to run a financially efficient business, b) you retain control and avoid the hassle and time-cost of reporting to a board and the investors, and c) the more you’re selling before you seek capital, the more valuable your business and the less of it you’ll give up to get funding.  Believing that with a good business plan and little else you’re going to get a million dollars to build your great idea borders on mental illness.

 

13)   Investors do not care what your product does or why it is a work of genius.  They meet “geniuses” with the “next Google/Facebook/Twitter” every day.  They want to understand a) how big is the potential market for your Thneed, b) who else is in that space, c) how do you plan to capture ?% of that market in ? years, d) how much will it cost to do it, and e) are you the badass that can make that happen.  The best way to do this is to sell as many Thneeds as possible before you talk to investors.  And there’s the challenge.

 

14)   Get an accounting firm.  At least as soon as you hire your first employee.

 

15)   Get an appropriate attorney.  Anyone can set up an LLC, so don’t spend big money on that.  However, intellectual property law, contract review if working with large-company clients, etc., all require specialized skills available from larger, well-respected law firms.  This can become a valuable long-term relationship, so select a firm appropriate for your goals for the next five years.

 

16)   Hire with extreme care, and if possible, hire people who are better than you.  The right people are fundamentally important to your success.  Consider the “culture” you’d like as you hire, because each new employee will contribute to or detract from that culture.  Trust your gut when it’s saying “no”, and screen the daylights out of everyone else.  Also, most people unconsciously hire those they believe to be slightly less capable than themselves, so their competency isn’t challenged.  Sports metaphor: think of yourself not as a player, but as the owner, manager and coach.  Any team whose players can’t out-play the management is a losing team.  That doesn’t mean that the exceptional players could manage the team successfully.

 

17)   You will not have enough time.  You will need to constantly reevaluate how you’re spending your time and ask “Is there anything else I can be doing that will generate more value in the next two hours than this.”  It is easy to get on a track and force yourself to see it to completion simply because either a) you’re used to finishing things, or b) you’re subconsciously avoiding something that is harder or has a less-clear path.  The reality of a start-up is that most things will not get done perfectly, some things won’t get done at all, and “normal state” is often a constant sense of missed deadlines and C+ performance, even though you may be achieving a lot.  So make sure what you’re working on is what matters most now.

 

18)   Do what the government says, on time.  Once there is income or employees, you’ll have forms that need to be filed with various levels of government on a periodic basis, and taxes or fees you need to pay.  Always get them in on time, because the consequence of tardiness is always more wasted time and money than if you just meet the deadline.  This is the main reason for the get-an-accountant recommendation above.

 

19)   Do the right thing.  Be honest, ethical and don’t screw anyone.  There are the obvious moral reasons for this, but there is also the simple reality that you’re more likely to be successful by being trustworthy, honest, fair and ethical.  For your entire career, you will be building your reputation within your growing network.  Being worthy of respect and trust is one of the most valuable tools in your toolbox, so don’t blow it.

 

20)   No matter how hard you think this will be, it is harder.  You will sacrifice more than you could possibly predict.  John Huston, founder of Ohio TechAngels, also an ex-Navy pilot (landing planes on aircraft carriers), and, in my opinion, one of the smartest guys you’ll meet, has said entrepreneur and investor are the most difficult roles he’s ever occupied.  I’m also a fan of the Mike Tyson quote: “Everybody’s got plans… until they get hit.”

In my opinion, the primary reason anyone creates their own business or works with a start-up is to “matter” in their work-role.  As an employee of a large or medium company, it is incredibly hard to feel like you’re making an impact, and the irrelevant  bullshit is nearly always chin-deep (except when it’s deeper).  In your own business, everything you do has incredible impact every day, positive or negative. 

Once you experience this, there are two possible outcomes.  If you are vulnerable to stress, you quit and become part of someone else’s organization.  But if the stress is exciting, if unpredictability is fun, if one peak is worth twenty valleys, if the destination becomes subordinate to the journey, then this is no longer a choice, and how difficult it may be is just more fuel on the fire.  And you’re in for the ride of your life.

TechCrunch50 Post-Mortem

I'm on the way home from the TechCrunch50 show in San Francisco this week.  Alicia, my assistant/manager-of-everything-else has a bad cold, and in general we're wiped out.  It was a great trip.

Overall, I'm very positive about the conference, the companies, the panelists, and the TC team.  Yossi Vardi is absolutely hilarious, honest, and I'd be thrilled to work with him.  The TC team has an amazing ability to run right on the ragged edge of disorganized disaster while managing to pull everything together and put on a hell of a show (they ran A LOT of ethernet cable after the day 1 wireless debacle, how cool is that?).  The Arrington / Calacanis riffs should have gotten old, but their telethon/hungover/nerdy/I'm-in-charge-but-I-shouldn't-be/is-this-mic-on shtick, improbably, got a reliable chuckle from me for the full three days.

Also, I won an Xbox 360 elite from the Microsoft emerging business team.  Here's a headscratcher: WTF is a startup going to do with a gaming console?  I've got about four free minutes a day.  The irony is that we're actually an MS shop, so a few SQL Server licenses could come in handy.  The MS team was great and very helpful, though, so I'll reluctantly try to make the best of my new Xbox.

There were, however, a few quibbles I had with the TC conference:

1. Wrong winner.  First let me say that the TC team and their advisers did an exceptional job selecting companies this year.  The mix was eclectic (BirdPost, for example, is a social network for birdwatchers (yes, inner parens, I said birdwatchers), and it completely kicked ass), and high quality (OpenTrace, GoodGuide, ClosetCouture, and many others had impressive technology and deep databases).  As I sat in the audience for many presentations, I never thought these-are-hacks-we-were-screwed.  So well done, TC, well done.

However, Yammer, presented as Twitter-for-business, won the best company award, and that's just absurd. I'm sure at least twenty developers left the show thinking I'm going to go get a case of energy drinks and put my own Yammer on-line by Friday.  GoodGuide deserved the win and the attention.  The TC advisors and everyone I spoke to (including a panelist in a post-party cab ride) seemed to agree.  I think the problem is that the TechCrunch team perceive Twitter to be a must-have technology, and as a media channel, maybe it is for them.  For nearly all other businesses, Yammer is a disaster, other than as a great way to identify the employees with too little to do.  They should rename it Downsizeeze.com or CanDooWithoutMe.com.

2. Separate business products from consumer products.  You could almost do two events, because the audiences overlap about zero.  Even the Microsoft/Google/Yahoo partners really need to bring different people for enterprise vs. consumer.

3. TechCrunch loves Hollywood, but I can't figure out why (beyond the publicity opportunities).  They'd be doing us all a favor if they picked a new crush for next year (Wall Street?).

For companies thinking about doing this next year: DO IT!  First, definitely enter your product to try to become one of the 50 (or 70, 30, whatever they do next year).  The process is an invaluable way to get yourself organized to pitch and sell your product.  BE FOREWARNED: you really need to spend time on the questionnaire and on the info OTHER THAN YOUR TECHNOLOGY AND SITE.  The TC advisers passed on BigBlueQ.com without ever looking at the product.  You need to make sure your pitch, summary and everything else you provide creates as compelling a case as possible, regardless of how great the actual user experience is for your product.

By applying, you qualify for the DemoPit even if you're not a TC50 company.  DO THE DEMOPIT! This is a great way to practice your pitch, meet people, get some exposure, and see what may or may not be working about your product and your message.

For the DemoPit, be sure to bring:
a) A large monitor in addition to a notebook.  Demoing off a notebook is just stupid.

b) Something to hand-out (like a single page sell sheet), in addition to business cards.  No one will remember who you are or what you do from your business card.

c) At least one other person to pitch, and relieve you occasionally for bladder management.

d) A pen.  Write people's comments on their business cards as you take them, so you can remember who-said-what.  If you get any poker chips (a vote for best DemoPit company), be sure to mark that on the business card , because those are people you definitely want to engage later.

e) Emergency supplies.  Ours included an extra power strip (used by our great neighbor, RateSurfer.com), electric tape (used), scotch tape (used), cold medicine and tissues (used, unfortunately).

Also, go to the parties each night (but conserve enough energy to bring the A-game the next day!).  This is a fun group, with a lot of smart people, and not too much attitude.  As one party-goer commented to Alicia: "we're just a bunch of nerds who are glad there are some girls here".

Probably the most important role of this conference for founders of young companies (particularly if you're not based in startup-dense cities like SF), is the camaraderie of other entrepreneurs at the phase when your bets are on the table and the dice are still in the air.  As seriously as we each take what we do and our deep deep personal investments in our companies and products, it is great to have that moment after you've all explained your ambitions and the incredible possibilities of your product, when someone says, "but I guess we'll see, won't we," and everyone laughs with perfect appreciation.

NFL Pre-Season 2008: NY Giants vs. BBQ

We've been working on the registered trademark for BigBlueQ™ for quite awhile, and we 're just in the final opposition period, where the mark has been vetted and approved by the Trademark Office, and posted to permit other organizations to notice and register an objection if something is too similar to one of their own marks.  An important background point: the conflict needs be in somewhat similar product domains, such as say, between our software and something else that has something to do with "technology", and which likely shares a similar customer base.

My lawyers sent me a letter this week to let me know that NFL Properties LLC and the New York Football Giants, Inc. have filed to extend my opposition period.

Although we believe that Big Blue Q's application service provider services are much different from the football and entertainment services that the NFL provides, there is no reason to contact the NFL[...]

- Big Blue Q Attorneys

Yes, my lawyers are really good.

This is the kind of thing that happens when corporate attorneys have too much time on their hands, which is often the case (it is Summer, after all).  Except this is the New York Giants, whose stadium is, well, in the wrong state.  You're telling me that stopping the competitive threat posed by B2B web software is more important than doing something about the fact that their stadium (and it's successor) are in a New Jersey swamp?  Players can't fix that, fans can't fix that.  Do you guys need to borrow my lawyers?

To be clear, I've lived and loved both New Jersey and New York City.  I've got a degree from Rutgers, and then lived in Jersey City seven years.  I've lived in Manhattan for a few years, too, and know some prodigious Giants fans.  By the way, Jersey City (which, confusingly, is actually in New Jersey), is about the same distance from Giants Stadium as Giants Stadium is from the state in the team's name.  But I digress.

A great lawyer is the closest thing modern civilization has to Superman.  They can protect truth, bend objects with their mind, foretell the future, and (the great ones, mind you) can probably even move a stadium.

If I was a New York Giants attorney, I'd take the more aggressive tact of moving the state line to the West side of the Meadowlands.  I'd gerrymander a bit so that New Jersey can keep Hoboken and those other great communities, but as someone who's spent time in Secaucus, I think most of the state will feel like it's had a tumor removed (that's fair: the people in Secaucus used to tell Jersey City jokes).  Plus, from the New York perspective, it's only fitting that we're stuck with cleaning up all of the people we dumped out there last century.   

We'll see how this comes out.  And best of luck this Fall to Big Blue.  Well, who do you think I'm talking about?

Next: I look at our new sister product, "Big Brown Cleveland Q".