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Lots of startups start with good ideas, but few of them become huge successes. More important than a good idea to their success is just having the resilience required to keep going even if your idea isn’t so great, Y Combinator partner Justin Kan said at Disrupt Europe 2014.
That certainly was true in Kan’s own experience as he and his team transitioned from an online life-casting stream into a massive live-streaming platform for video gamers. “If you look at all startup stories, it’s not a straight line… to success,” Kan said. “If Justin.tv could work and be successful, then no one has any excuse. That was a terrible idea.”
According to Kan, after he and co-founder Emmett Shear applied they received a letter from Y Combinator founder Paul Graham saying there are three kinds of companies that applied: There are companies with good founders and good ideas that they wanted to fund, companies with bad ideas and bad founders that they didn’t want to fund, and companies with good founders and bad ideas, which is what they represented.
But they convinced YC to take a chance on them and eventually that paid off. Kan went on to posit that if you have smart people working on trying to make something people want and they don’t give up, they will eventually be successful. But, he said, founders need to be in it for the long haul, noting that it took eight years for the founding team of Justin.tv before they ended up selling Twitch to Amazon for $970 million.
In that sense, he believes good founders with resilience are more important than good ideas in building businesses. “I’m biased, but I see people who have great ideas and are working on things that could be successful, but they give up,” Kan said.
Get your Free Business Plan Template here: http://bit.ly/1aKy7km
FBI agent Robin Dreeke combines science and years of work in the field to offer practical tips to build rapport and establish trust.
I had an opportunity to ask Robin Dreeke a few questions. Robin is in charge of the Federal Bureau of Investigation’s elite Counterintelligence Behavioral Analysis Program and the author of "It’s Not All About Me."
Robin combines science and years of work in the field to offer practical tips to build rapport and establish trust. In this brief interview he discusses building relationships, how to approach someone you don’t know and ask for a favor, and the keys to establishing trust.
A lot of people are interested in strengthening and furthering relationships. How can people do this?
Trust is a foundation to most situations in life. How can we develop trust? What are the keys?
What’s the best way to approach someone you don’t know and ask them for a favor?
What are some strategies to build rapport while giving a talk, presentation, or interview?
I suspect you spend a lot of time trying to figure out if people are manipulating you or the situation? Can you talk about this? How can you tell when people are attempting to manipulate you?
If you had to give a crash course in building a relationship with someone, what are the top 5 things people need to do? What carries the bulk of the freight so-to-speak?
Get your Free Business Plan Template here: http://bit.ly/1aKy7km
Via Official AndreasCY
Marc Kneepkens's insight:
Great skill that will always come in handy in any situation. Whether dealing with investors, partners, your team, customers, etc.
Cost of living can be a strain on startups and can influence where they launch
Startups are usually strapped for cash. The ones promising enough to receive large checks from venture capitalists and investors are not so much jumping for joy because they’ve won the lottery, rather because they know the cash injection means an extended lifespan.
One sizable drain on any young company’s resources is the cost of living in the city it calls home. That translates to rent, as well as living salaries for employees or prospective hires that have to live close enough to make it to work every day. And equity, as magical as it is, won’t pay off your landlord.
In that sense, are expensive towns more difficult to start up in? Are startups that put down roots in high value cities putting themselves at a disadvantage? It could well be a calculated trade-off.
According to a recent poll conducted by The Supper Club – a UK-based members-only networking group for startups generating over $1.6 million – about 40% of London-based business owners have considered picking up and leaving the city to headquarter elsewhere. Why? Apparently the cost of housing in the capital city is too darn high and is driving away talent. Of The Supper Club’s 330 entrepreneur members, 79% fear that brain drain could cause a severe scarcity of skills within the next five years, citing rent costs and poor public transport.
It’s hard to believe that London – named #2 tech hub in Europe by the European Commission last April – could face an exodus of tech and business startup talent. But if costs and infrastructure are truly frightening personnel away, might the startups looking to hire them follow suit?
In the United States, the most expensive cities are New York, San Francisco, Honolulu, Washington D.C. and Boston (check out the full list HERE).
The tech capital of the world, San Francisco, is notorious for its high-costs . One-bedroom apartments there cost more than anywhere else on earth, according to a study. Some startup founders have jumped ship because they found they could score talented people in Portland, a city with a lower cost of living, and discovered that prospective employees overwhelmingly chose the Oregon city to San Francisco.
Once an industry term for small business, startups now connote an exciting entrepreneurial lifestyle more and more college educated youths are choosing -- and here's why.
New York’s credentials as a startup hub have been piling up over the past several years, thanks in large part to the so-called Silicon Alley phenomenon. Rents for commercial real estate have risen with it and young firms are spilling out of Manhattan into other boroughs, like Brooklyn. Housing-wise, New York City is not a cheap town to live in and newcomers – or city residents priced out of more central areas – are finding they’re forced to look farther and farther east for reasonable accommodations. Some move the other direction, across the river to New Jersey.
“Overall, there are no signs of the real estate industry slowing down,” says Ashkán Zandieh, founder of real estate tech coalition RE: Tech. “While interest rates are low, developers are borrowing and owners are refinancing. The most positive impact that we’re seeing is in suburban markets.”
As far as the startup scene is concerned, there’s no slowdown due to cost of living. Those that were already working in New York do not want to move and those that are interested in starting up in the City That Never Sleeps know that there is capital to be had and the volume of consumers around them creates a thriving market. The pricetag of doing business is just a fact of life, says Zandieh. “There’s a cost to play and if you want to play in New York the costs are going to be astronomically high.”
In the end, though, cost of living and desirability of location is a balancing act that entrepreneurs and business founders have to think about carefully. Sure, you may be paying high rent and the price of transport, takeout Thai food and an after-work cocktail may seem bloated, but if you’re in a vibrant and international city that offers its people a world of culture and access they cannot get in other places, you might find you’re willing to take the financial hit. If the money factor sill bugs you, it may be time to scout out other locations that, though cheaper, offer a lifestyle that’s almost as enticing.
Marc Kneepkens's insight:
Tough choice. Startups can thrive anywhere I would say, but are all the tech and brains available? And what about connections and funding?
Four months ago now, we got accepted to the Y-Combinator for our shared inbox solution. We wrote about our first month inside the famous Californian structure. But recently, we’ve been asked to write what happened after that. And let’s face it, a lot of things happened!
So here I am again, after 3 months at Y Combinator. I’d like to go over what it did for our team, our product and our fundraising.
(You’ll also find some advice for filling out your YC application and doing the interviews at the end of this article, make sure to check it out if you’re interested.)
It makes or breaks your team, and that’s a good thing
Y Combinator is pretty intense. Amongst all the other things that it will bring you, one stands out: after these 3 months, you definitely know who your team is.
When we started Y Combinator, there was 5 of us working at Front (my co-founder, 3 employees and me). To make things easy, we decided to rent out a house in Palo Alto that would accommodate us all and from which we could all work. We weren’t from the Bay area at all, we weren’t even from the United States so we figured this was just the simplest way to go. Being far from our families and our friends had a least one advantage: we could be entirely focused on the work we wanted to do and that’s what we did, right from our living room. But that would also mean that we would stay together 24/7.
This will necessarily test the relationships you have with your teammates more than anything you’ve done before. YC pushes you towards your limits and makes sure that nothing is going according to plan. If relationships are easy to maintain when everything is going well, it’s a whole different story when the pressure is on. You’ll probably need to face some downtime, a bad launch, weeks with no growth at all, excessive churn, you and your team will be tired. And not only will you have to manage all of that, you’ll also need to make sure that the morale stays up and that everyone is still motivated to get up every day and walk to the living room to keep building a product that people will love.
But there is definitely a silver lining to the point I’m trying to make:, our team came out of this summer stronger that it ever could have been otherwise. We now know who we are, how we work together and when it’s time to just let everything down and go eat a burger. And this, in my opinion, is definitely priceless.
It helps you answer the only question that matters: is your product something people want?
Y Combinator makes things go faster
This sound pretty obvious knowing that Y Combinator is an “accelerator” but these are the different reasons that actually make everything go really fast.
But you still need to figure out things by yourself: YC will never tell you what people want
If there is one thing that is true about YC partners, it’s that you can’t expect them to do the work for you.
I still remember the day we finally got to meet Paul Buchheit. At that time, he was the partner we were most excited about meeting because of him being Gmail’s creator. We had prepared this whole set of questions for him regarding our app. We presented 3 different orientations for the product and asked his advice on which one we should choose. We thought he would just pick one and we would love the office hour with a magic answer that would make everything clearer. His answer: “Follow your growth”. I can’t say we weren’t disappointed but it actually made so much sense. Two reasons for that: we knew our market way better than any YC partner and we talked to our customers more than they ever could. And that meant that he didn’t have the answer, we did.
In the end, even if you’re in great company and if there are a lot of people ready to help you, you’re the one who will have to do the hard work and make the tough decisions. But YC will be there all the way to help you ask yourself the right questions and focus on the right things.
It makes your financial future safer, at least for the next 18 months
Demo Day will be one of your main focus during the 3 months and it’ll definitely be an additional source of pressure. But you need to know one thing: you’ll be fine. Sure, you will probably need to rehearse your pitch dozen or even hundreds of times and you will reach a point where you’re not sure what you’re really saying anymore.
But, again, you’ll never feel alone in the weeks before the event. We found that the partners were always there for us, whenever we needed them. During their office hours obviously, but also during those late night or weekends when questions usually creep up. They’re always just a Skype call away!
On D-Day, don’t let yourself be impressed by all the investors and people in the room (around 500 if I counted them right). Sure, there are some of the most impressive VC funds out there like Sequoia or a16z, as well as major seed funds (SV Angel, First round…) and great business angels. But they’ve been expecting this day as much as you have for the past 4 months. Basically, you just need to consider your pitch as a gift to them and everything should be alright.
Advice and tips for applicants
1. The application
Zain Shah, from the YC Summer 2013 batch, also wrote question per question advice you should definitely have a look at.
2. The interview
3. Don’t be afraid to ask for advice
We’ve all been helped before entering Y Combinator and we now all feel really grateful. So don’t be afraid to ask YC alums to help you out for a mock interview or for preparing some responses to tough questions. I’d be happy to help (just shoot me an email at mathilde (at) frontapp.com)
And whatever happens next for you, remember that preparing a YC application will never be a waste of time.
If you don’t get accepted after the written application, look at the bright side of things: you now have a better understanding of your market, you’ve thought of your team more and you’ve put words on your idea and your vision. These are things that you wouldn’t have taken the time for otherwise.
If you don’t get accepted after the interview, you will get the reason why and you’ll then be able to improve your product. This is what happened to SoapApp. You can ping them on Twitter, they’ll tell you how they were able to pivot after their interview.
That being said, we wish you all the best of luck!
Make sure you come and say hi!
Marc Kneepkens's insight:
Great experience. Expand your limits!
All offense and no defense can cripple your company. So how do you strike a balance between both?
What fuels a startup’s success? Is whether you are “driven to win” or have a “fear of failure”?
I think both sides of this argument are pretty self-explanatory, but let’s just make sure we are clear on what we are talking about here.
Being “driven to win” is an insatiable desire to be #1 in your industry, often with a “take no prisoners” mindset of growing market share as quickly as possible. The CEOs of these types of businesses often have a deep disliking of their competitors, and see themselves in an “all-out sprint” against the CEO’s of others in their space.
To me, this is an offensive strategy (as in, on the attack, not distasteful.)
On the other hand, “fear of failure” is driven more by not wanting the company to go out of business, and the perceived negative impact that would have on the CEO’s resume and reputation. To me, this is a defensive strategy.A sports analogy
So, if that is in fact a good analogy, are you aware of any competition that doesn’t require the proper balance of both a good offense and a good defense? I really think if you have too much of one, without the other, your success will be hampered.
As one example from the sports world, let’s look at the failed Rich Rodriguez tenure as head coach of Michigan Football between 2008 and 2010. His innovative offense broke every statistical record as the most productive offense in the 132 year history of this storied program.
However, at the same time, his lack of defensive focus, broke every record in the wrong direction as the worst defensive program in the history of Michigan football. This lop-sided mix of skills, resulted in a middle-of-the-road record (7-6 in 2010), and the ultimate firing of Rich Rodriguez at the end of that season.A business analogy
This analogy holds true in the business world as well. All offense and no defense can cripple your company.
If you are too scared to fail (e.g, too much defense), that may cripple your ability to innovate out-of-the-box ideas that, if successful, would catapult your business to new heights never before possible.
Let’s use Apple as an example. What if Steve Jobs had stayed “defensive,” focusing on protecting Apple’s market share as the leader in personal computers? We would have never seen such great innovations as the iPod, iTunes, iPhone and iPad that revolutionized the tech scene in the years that followed, fueling Apple’s meteoric growth and stock price.
On the flip side, if you try to use too much offense, you can cripple your business by growing too quickly, running out of cash or entering more markets than logically makes sense for your phase of development, stretching your limited resources too thinly to be sustainable.My personal experience
I think this theory holds true from my personal experience while CEO of iExplore. I was equally focused on “offense” and “defense,” and was deeply-driven to win market share and partnerships away from my competitors at the time.
Concurrently, I had a deep fear of failing, especially in the wake of 9/11/2001 and the negative impact that had on the travel industry. I wasn’t going to let terrorism end my dream or taint my track record, and I fought on through very difficult market conditions, even though the odds of success were not in my favor.
Without the offense, we would have never built up a #1 market position and partnerships with National Geographic, Travel Channel, Expedia, Lonely Planet and others. But without the defense, it would have been a lot easier to simply file for bankruptcy in 2001, given the uphill battle that lied ahead.
To me, it is not whether you are “driven to win” or have a “fear of failure” – your startup success needs an equal balance of both. This is where having multiple co-founders may benefit your company to allot different perspectives and tasks for different people working toward the same goal.
Be sure to read my companion piece, Passion Drives Success, for additional insights on the key psychological drivers of entrepreneurial success.
If you watch the TV show "Shark Tank" as entertainment and not to obtain a startup education, you will be benignly inspired by fellow entrepreneurs.
"Shark Tank" is a reality competition show that features entrepreneurs pitching business ideas to a panel of potential investors, referred to as "sharks," for funding.
I have seen the show's negative impact firsthand. A number of my entrepreneurial students at the University of California, Santa Barbara, have modeled their pitches and overall fundraising approach on the show's format. In these discussions, it has become clear to me that the students aren't aware where reality stops and entertainment begins.
A spokeswoman for "Shark Tank" declined to comment.
I admittedly have only watched a few episodes. Assuming that what I saw is representative of the overall show, it is shockingly devoid of positive lessons for real-world entrepreneurs. Some of the more destructive startup myths perpetuated by the show include:
Partners, Not Sharks: Even the show's title communicates a negative message. Accomplished investors aren't predatory sharks, looking to gain an advantage at the entrepreneur's expense. On the contrary, successful investors are typically entrepreneur-friendly, and consider their entrepreneurs to be partners.
Pitch Overvalued: Pitches are important, but they aren't the focal point of fundraising in real life. Understanding the entrepreneur's motivations, aptitude and attitude are more important than a slick pitch. In the real world, pitches are an important step in establishing a relationship with an investor, not the finale that triggers an investment.
Compressed Timeline: I realize that for purposes of the show's formula, funding decisions must occur immediately after the pitches. However, in real life, investor relationships are typically fostered over weeks, months and in some cases, years. The judges' "commitments" are "pending diligence," and thus they are merely signs of interest to learn more, not actual commitments, as implied on the show.
Ideas Overvalued: The show's pitch-centric format places too much emphasis on the appeal of ideas, rather than the entrepreneur's ability to create value via effective execution. In the real world, entrepreneurs should seek capital from sophisticated investors after they have proven their underlying value proposition. Such proof usually comes in the form of strategic partners and paying customers.
Random Investors: Ideal investors are experts in the businesses pitched to them and can provide germane and tactical assistance. The "Shark Tank" panel typically has little industry expertise in the deals they are pitched.
Paltry Valuations: I don't know the average valuation paid by the show's "sharks," but the episodes I watched indicate that it is well below that of a typical technology deal. The amounts invested are likewise not representative of the bite sizes generally taken by sophisticated investors. Most legitimate seed rounds provide entrepreneurs with enough funds to generate meaningful value in advance of a future funding round and seldom result in the entrepreneurs giving up more than 25% of their ownership.
Consumer Centric: The show understandably focuses on consumer products that its viewers can relate to. In reality, very little venture capital is applied to such startups. Consumer goods are best funded in a crowdsourced manner, through industry partnerships or via conventional loans, which can be secured by the underlying inventory.
Not So Free Publicity: Although public exposure might be a legitimate motivation for appearing on the show, the resulting notoriety can come at a cost. Publicity cuts both ways. If a product is poorly received by the judges, it could result in a major setback, which could make it more difficult to raise funding in the future.
—The Accelerators is a Wall Street Journal blog on entrepreneurship. John Greathouse is a partner at Rincon Venture Partners, a venture-capital firm in Santa Barbara, Calif.
Marc Kneepkens's insight:
Another viewpoint on SharkTank. Not the same as venture capital.
Shark Tank bears no relation whatsoever to professional angel investing.
Part of the reason can be found in the question itself: it asks about valuations for "inventors". In the real world, many of the contestants on Shark Tank are, indeed, inventors. People who have come up with an idea for a new product and are looking for help in marketing it.
Marc Kneepkens's insight:
David Rose compares 'Shark Tank' to 'Angel Investing' to what 'Indiana Jones' is to 'Archeology' in a little video clip.
Nice to see that straightened out.
"People complain about how hard it is they're not in Silicon Valley," said McClure. "Even in the US. I meet people in Cleveland and they say 'there's no talent here' -- that's such a load of bullshit. Ten years ago in Silicon Valley it was hard as hell -- things were 100 times more expensive, and there were ten times less people."
Pulling up a comparison of Silicon Valley post the 2000 dotcom crash and the 2008 crash, McClure pointed to the differences in approach and infrastructure. It's many of the things startups today might take for granted, like the fact so little budget goes to thing like servers -- they're mainly in the cloud now. "Most of our costs now are head count -- we have these layers of infrastructure already built from Google and others."
Today, we also have content platforms on mobile that did not exist ten years ago. "Now you can reach those billions of customers through the five to ten global platforms like Google, Twitter, Apple, Android, Paypal."
McClure also flagged up Angel List as a key element for all startups and investors. McClure found a startup working in web analytics for dairy farmers in Croatia using AngelList. Now that previously unknown entrepreneur is sitting on $5m of funding.
After the 2000 dotcom crash, McClure described the state of play as the "dinosaur stage", with lots of money poured into hardware, long development times and less money around. Now, apparently, we're in the nimble "cockroach" phase.
All this means, there's no excuse: "You should be rolling out experiments in weeks, if not days."
The key downer, as he points out, is that none of this means a company is any more likely to be successful. It's definitely easier to get your company off the ground though. Perhaps even more of a downer though was that after asking the audience to raise their hands if they want to build a startup, he said "I actually believe in probably one out of ten of you". Hence the name, 500 Startups -- McClure's model is to hedge his bets, in a similar way to Y Combinator, though with bigger investments. But knowing you might be on the precipice of failure, and managing to keep hope alive, is what being an entrepreneur is all about he adds.
"Silicon Valley is a state of mind -- belief and optimism in the face of failure. It's not easy to sustain belief knowing 80-90 percent of you will fail. But what's most important is that belief in success. Because we have decades of seeing unusual success result in unusual outcomes."
The bottleneck holding the ecosystem back outside of the US, is the investor side, he says. "They are too risk averse, they don't know enough about technology and investors are not as good as in Silicon Valley -- they are the point of failure. The investor side is the limiting side of the growth of those markets."
"So you folks at the bank -- I hope you're listening to what I'm saying. Help angel investors and small seed funds. There are plenty of entrepreneurs here, you just need to give them money.
Marc Kneepkens's insight:
Startups have so much more available to them now...
Prominent venture capitalist Marc Andreessen has a message for Silicon Valley startups: Get your spending under control now, or fail when the market inevitably turns.
Andreessen has long insisted that Silicon Valley's tech boom is not a bubble, but he is now worried that startups are spending too much cash on flashy offices or excessive numbers of employees.
Andreessen's comments, made on Twitter, make him the latest in a series of investors to warn about high "burn rates" at tech startups. Burn rate measures how quickly a company uses capital.
"When the market turns, and it will turn, we will find out who has been swimming without trunks on: many high burn rate [companies] will VAPORIZE," Andreessen said.
Related: The billionaire Silicon Valley exec with the shiniest toys
Andreessen is not the only worried investor. Bill Gurley, another venture capitalist, told the Wall Street Journal last week that "no one's fearful, everyone's greedy, and it will eventually end." Fred Wilson, a partner at Union Square Ventures, is also sounding the alarm over high burn rates.
Andreessen's 18 tweets on the topic warn that in the event of a downturn, companies will find it much harder to raise cash, merge or be acquired by a larger firm.
When that happens, startups will be forced to adapt quickly, and bloated firms will fail.
"When market turns, M&A mostly stops. Nobody will want to buy your cash-incinerating startup. There will be no Plan B. VAPORIZE," he said.
Andreessen said that while some companies with high burn rates will survive, they will be "few and far between."
Andreessen's conclusion? "Worry," he said.
To see a live video of Marc Andreessen covering this topic, go to the original article here: http://money.cnn.com/2014/09/25/investing/marc-andreessen-startup-warning/index.html
Marc Kneepkens's insight:
Keep it lean, and survive.
I was catching up over coffee and a muffin with a student I hadn’t seen for years who’s now CEO of his own struggling startup. As I listened to him present the problems of matching lithium-ion battery packs to EV powertrains and direct drive motors, I realized that he had built a product for a segment of the electric vehicle market that possibly could put his company on the right side of a major industry discontinuity.
But he was explaining it like it was his PhD dissertation defense.
Our product is really complicated
I told him I disagreed and pointed out that anyone can make a complicated idea sound complicated. The art is making it sound simple, compelling and inevitable.
Turning on your Reality Distortion Field
How do you put together a 30-second pitch?
Envision how the world will be different five years after people started using your product. Tell me. Explain to me why it’s a logical conclusion. Quickly show me that it’s possible. And do this in less than 100 words.
The CEO's reaction over his half-finished muffin was, “An elevator pitch is hype. I’m not a sales guy I’m an engineer.”
The reality is that if you are going to be a founding CEO, investors want to understand that you have a vision big enough to address a major opportunity and an investment. Potential employees need to understand your vision of the future to decide whether, against all other choices, they will join you. Customers need to stop being satisfied with the status quo and queue up for whatever you are going to deliver. Your elevator pitch is a proxy for all of these things.
While my ex-student had been describing the detailed architecture of middleware of electric vehicles I realized what I wanted to understand was how this company was going to change the world.
All he had to say was, “The electric vehicle business is like the automobile business in 1898. We’re on the cusp of a major transformation. If you believe electric vehicles are going to have a significant share of the truck business in 10 years, we are going to be on the right side of the fault zone. The heart of these vehicles will be a powertrain controller and propulsion system. We’ve designed, built and installed them. Every electric truck will have to have a product like ours.”
That would have been enough to have me say, “Tell me more.”
Get your Free Business Plan Template here: http://bit.ly/1aKy7km
Marc Kneepkens's insight:
Delvering a good pitch is essential in funding and sales. Read this article, it'll give you the basics.
Start your own business today and learn how being an entrepreneur provides job security, prosperity, and changing the world. Use entrepreneurship to reinvent yourself.
If you’re an entrepreneur you have heard the million reasons not to go into business: It’s too risky, you might go into debt, you’ll probably lose sleep, your social life is kaput, and the list goes on. But even with all these uncertainties, people are still attracted to the startup world. There are just as many, if not more reasons to take the leap and go start your own business. Here are just a few:
1. Spare time. This one can take some time. Initially you’ll work longer hours for less pay. But if you do it right, you could start to master your schedule and the freedom that being an entrepreneur provides is awesome.
2. A story to tell. Whenever I tell someone I run my own business, they always want to know what I do, how I do it and how it’s going. I always am able to provide a tale or two, and the best part is that I get to determine the story's chapters. (When working for a corporation, people most likely have less input.)
3. Tax benefits. For entrepreneurs (freelancers included), they have the opportunity to take advantage of some nice tax perks. Many can write off expenses like travel, food, phone bills, portions of car payments, and the list goes on. Also, certain startups qualify for government incentives. Make sure to ask your accountant about what tax benefits you may be eligible for.
4. Pride. When you build something successful, it’s a great feeling. You had a vision, were able to execute it and not can reap the benefits of saying "I did this." On the other hand, it’s tough to be proud of the zillionth request for proposal you fill out for your employer.
5. Your posterity. If you’re a doctor, plumber or bus driver it’s hard to imagine you passing your career on to your loved ones. But if you own your own business, that’s something you can pass on to the next generation. And be proud of it, because you created it.
6. Job security. Have you ever been laid off, downsized, or fired? If you have, you get this. With entrepreneurship the security lies in the fact you are your own boss. You run the show and don't have to worry about getting let go.
7. Networking. Entrepreneurs are communal creatures. We love to meet each other, swap stories, and learn from each other’s experiences. Your circle of friends and acquaintances always grows when you become an entrepreneur, as many founders need others to lean on to survive and talk about the challenges only known to them.
8. Doing good. While this isn’t exclusive to entrepreneurs, it’s definitely a perk. You control where your company profits go and if you choose, you can give allocate your financial gains to others. You can sponsor a charity, a non-profit or just personally give back to the community. This is quite honestly one of the best parts of being an entrepreneur.
9. Novelty. We, as humans, love new experiences but rarely can you experience a host of new things from inside your cubicle. This all changes when you are running the show. Starting your own business will ensure you’ll always be facing new challenge and experiencing something new.
10. Mentorship. Having had mentors and getting to be a mentor have been some of the best experiences of my life. Learning from the masters and getting to help those less experienced than you gives you such a sense of satisfaction. From my experience (and other's stories) the entrepreneurial community is very willing to give back and lend a helping hand.
11. Becoming an expert. This point goes along with mentorship. Regardless of what you do as an entrepreneur, if you stick with it, you’ll probably become very good at it. And this gives you a sort of soapbox, so use it. You'll have the chance to be interviewed for your expertise, write about it and get to spread your message.
12. Skills. People ask me how I learned about SEO, social media, pay-per-click, PR and all the other marketing techniques I utilize. I tell them that I was forced to learn them, otherwise I wouldn't survive. The same way I was forced to learn how to build a spreadsheet, how to balance a budget, how to negotiate leases and countless other skills I picked up because I was the only resource I had. While developing new skills can be tough and takes times, it can pay off in spades. These skills will be invaluable throughout your life.
13. Determination. Everything I’ve done as an entrepreneur has affected me in my personal life. I used to be poor at committing to changes. But having been an entrepreneur for over a decade has forced me to become dedicated and determined to causes. (Now I can stick to an exercise plan much easier.) I’m also better at being a father and husband because of that determination I learned.
14. Recognition. There are literally thousands of local, regional and national awards that recognize entrepreneurs in every field and industry. This shouldn’t be your only reason to start your business, but it certainly is a great feeling when you receive this recognition.
15. Financial independence. Let’s be honest, this is probably the biggest reason people get into business for themselves. And that’s a good thing! You should want financial independence. However you define financial independence – retirement stockpile, unlimited cash potential or having the money to buy what you want -- entrepreneurship can allow you to achieve it. Trust me, money doesn’t buy happiness, but it does make finding happiness much easier.
16. Reinvention. I’ve started and sold several companies over my career. And every time I sell a company, I’m presented with an opportunity to reinvent myself all over again. On the flip side, if I had received my law degree, I’d be a lawyer (not a lot of room to recreate myself). But as an entrepreneur, I get to be whatever I want to be.
17. Change the world. Everyone jokes that every entrepreneur says they’re going to change the world. It’s difficult to imagine how a cell phone accessory kiosk in the mall is going to change the world. But there are those that do succeed. Take a look at Elon Musk, Bill Gates, Sergey Brin, and the countless other entrepreneurs who really have changed the world in some small (or major) way.
18. Create jobs. There’s nothing like the satisfaction of knowing you’re responsible for the success of your employees. Your ideas provided them the opportunity to earn a living, provide for their family and fulfill their own dreams.
19. Your brand. Being known for something is awfully enjoyable. People may start referring to you as the marketing guy, or the retail maven or the software guru. Whatever it is you’re recognized as, it’s fun to build that brand and earn that recognition.
20. Your reason. I’ve given you a list of why I think you should get into business. But all that really matters is your reason to start your own business. So, what is it? Tweet out this story and add your reason. Comment below and share with us why you did it. I know it will be a good one.
Marc Kneepkens's insight:
I like just about every reason here. I'm glad I turned my back to being employed a long long time ago.
What’s the point in losing money on purpose? Here are some telltale clues that your business is not a sound proposition.
Every investor wants to bet on a winning horse. I mean what’s the point in losing money on purpose? But that’s the risk taken on a gamble. And the same can be said about investing in startups.
Over the past month I’ve been putting together pitch decks for my next startup, a free web-hosting company. This got me thinking about the hundreds of startup founders who have approached me and some of the things they did that really ticked me off. (I've invested in 16 different startups over the past four to five years.)
No matter what stage your startup is in, you’re probably going to need some investment dollars. So to save everyone a lot of time, here are 25 reasons I personally would not invest in a startup. Review and address these points for smoother sailing when trying to secure funding from an investor like me and others:
1. Proof of your potential success is missing.
There's no evidence that there's interest in your startup or that it has some traction. Have you sold anything yet? Have you run a successful Kickstarter campaign? Have you launched a startup before? Passing those tests would prove to me that you have what it takes to get this startup off the ground.
Show me that your business is something worth my putting my hard-earned cash into and that this investment will work hard for me as your company starts to have success.
2. I don’t trust you.
I stalk every company that I personally invest in. I typically invest in people. You could walk into my office and pitch me one heck of a product. Yet I’m not sold on you as a person, so forget about my investing in your company.
If I can’t trust your character, judgment or leadership skills, then let’s not waste each other’s time.
3. You have an inexperienced team.
Members of your team seem to lack the experience needed to operate a startup.
Let’s say that I like you and your idea but not your team. Don’t expect an investment from me. I need to be sure that members of your team have the qualifications and discipline to complete tasks, meet deadlines and follow through on objectives.
4. Members of your team don’t work well together.
The co-founders or team members of your startup are constantly bickering. So I’m going to become uneasy about your startup. I don’t want to risk an investment in a setup if the colleagues can’t get along. Does everyone get along on your team?
5. You're keeping things from me.
You're keeping every piece of information from me. I’m not asking you to reveal every little secret regarding your startup. But if I’m investing in your company, I have to at least know the basics of what makes your startup tick.
Investors want to know everything about your startup. Don’t worry: I won't steal your idea. I'm too busy.
6. You don’t have a business model or plan.
You have failed to tell me how and where you expect to take your startup in the next couple of years, though you indicated that there’s interest in your product, That’s why creating a business plan is such an important piece of the puzzle.
If I’m not impressed with your business plan, then I won't invest in your startup.
7. Evidence that the startup will earn money is scant.
There are no preorders or not many signups for your product or service. So I won't be interested in your company. If you can’t prove that people are willing to pay for your service, then why should I, as an investor, give you money?
8. I don't believe you can build your product.
A great idea is one thing. Making it a reality is another. You haven't convinced me that your product can actually function. I personally need to see some sort of working prototype. I'd like to also see a few customers using your product.
9. Your company is not the first to enter the market or unique.
I typically don’t invest in startups that are not trying to create something new or that have not come up with a different business model. You must have something different or unique beyond what the competition has. Perhaps create a new idea from an old business model.
10. The founder or CEO is uncoachable.
You're not willing to listen to advice or suggestions and become defensive when I criticize an element of your business. Thus I can’t work with you.
One time when several founders came to pitch me, I made one suggestion and they became offended. Some even went so far as to blog that I didn’t know anything. Their company is out of business now.
11. Your startup costs too much.
You may think your new company is worth $10 million. But I believe that it’s worth only one-tenth of that.
Figuring out the value of your startup can be a challenge. The value should be based on past accomplishments and the company's potential. If I feel that a startup is being assessed at a value that's too expensive, I’m going to look for another investment opportunity.
12. You handle rejection poorly.
You have come across like those entrepreneurs who gripe and moan about how unfair life is. Sure you'll be rejected by investors. And that’s part of the process. But handle that rejection properly.
Identify what went wrong and make the proper adjustments. What happens after the pitch and rejection says a lot about an entrepreneur. Investors are watching, even after they’ve said no.
13. You cold-called me.
You sent your plan to every angel investor or venture capitalist for whom you could find contact information. Your request is just going to be tossed into the trash. Instead approach investors through referrals or recommendations from people they trust and who can vouch for you.
I only invest in startups when the founders are referred to me or they go above and beyond the call of duty to get my attention.
14. I’m not the right investor.
Your company is not operating in my area of expertise. Just like a doctor might have a specialty, so do investors. Do some research ahead of time and locate the investors who are involved in your field.
15. You don’t focus.
You're trying to launch every single product idea that you have. Instead stay on track and focus on creating the best product that you can release.
You’re not going to please every customer. But you do have to please the right customers or the situation will come back to burn you -- perhaps in an online mention.
16. You’re way too early for my money.
You wanted to develop an idea that could revolutionize your business niche. But your concept is too far out. I’m going to stay away until there’s been more research, your protect has traction with customers or other investors show interest. Investors typically want to stick with proven technology and industries.
17. Your company's technology is already forgotten.
Honestly, in the past six months I've received pitches concerning VHS tapes. Business trends, especially in the technology, move extremely fast. Why should I risk my money supporting a startup that makes VHS tapes more efficient, even if in 2012 roughly 13 million blank cassettes and VHS tapes were sold in America?
18. You’re too slow to launch a product.
Your company is moving too slowly. Whether it’s because you lack confidence or are a perfectionist, the longer it takes to launch your product, the longer it takes for me to see a return. Remember, there’s nothing wrong with releasing a version 1.0 and making the appropriate adjustments at time goes on.
19. You lack a marketing strategy.
Your startup is poised to begin selling a product but lacks a plan for how to boost sales and gain a competitive advantage. I, along with thousands of other investors, can tear your startup apart in seconds. Have you set marketing goals? How will you promote your product? These are crucial marketing questions that need to be addressed before you come knocking on my door.
20. What problem were you trying to solve again?
When you founded your startup, you did it with the intention of solving a problem. But you, the entrepreneur, have shifted your focus from contemplating an idea to running an actual business, you have lost sight of the original problem. I need to confirm that you’re still addressing a problem that exists and your solution is feasible,
21. You don't understand the industry.
As an entrepreneur, you don't seem to be familiar with the business sector involved so I'm not interested in investing in your startup. If you had experience in a related area, that would at least inform me that you have some knowledge relevant to potential customers or an inkling about how to enhance the industry.
Break down the actual numbers that concern your particular niche of the industry and know them solid. If you don’t have those figures, I’ll assume the worst or even more awful, I’ll come up with my own calculations.
22. You don't understand the word "lean."
You're spending money on things like branded hats, key chains or coffee mugs. Why would I want to invest your startup? An investment is supposed to go a long way toward getting a product ready for launch. That means not spending a ton of money on swag. A couple of T-shirts for promotional purposes is fine, but don’t go on a spending spree.
Also, don’t be paying yourself a big fat salary just because you’re the boss. A study by Compass indicated that 66 percent of Silicon Valley startup founders using its benchmarking tool gave themselves salaries lower than $75,000. The average around the world is $32,000 to $72,000, according to Compass. How much are you paying yourself?
23. You're not concerned about tomorrow.
Your startup seems to be based only on a current trend. You can’t expect a startup to have longevity this way. I know that we can’t predict the future, but I want to invest in startups whose owners are thinking about the future, not just contemporary trends.
24. There aren't any other investors.
I'm not finding evidence that others have invested in your business, even a couple of thousand dollars. Unless I’m a fervent believer in your startup, I need to see interest from other investors. The presence of other investments gives me an indication that someone else sees potential in your startup and that other people are support your vision. Having a couple of investors is good as they will help promote your business.
25. You’re oblivious.
Many of above issues apply to you and you haven't realized it. That's a serious problem. I can’t stand dealing with people who can't see flaws and are clueless about trying to overcome them. Remember, no one is perfect. Accept your weaknesses and work on correcting them.
Let these reasons that I won’t invest in certain startups serve as tips for every startup founder to remember when pitching an investor.
What other tips would you give entrepreneurs who are pitching startups?
Via Official AndreasCY
Marc Kneepkens's insight:
What a great list. Pin this on your refrigerator, use it before pitching your startup. Once you think you're ready, check it.
Fergal O’Mullane, director at retail tech accelerator Eccomplished, looks at the key issues that prevent investors from backing companies.
Professional investors see a constant stream of start-ups telling them that they have developed a unique product that is going to disrupt their chosen market and deliver huge returns.
To combat this, they will generally have developed a set of investment criteria that nine times out of ten will govern whether they decide to invest or not. To put it into context, a typical VC might review 2,000 or 3,000 plus 'opportunities' per annum and only invest in 10 or 15, while active angel investors might see 200-300 and invest in 4-5.
The odds are stacked and investors are constantly on the look out for 'red flags', or reasons not to invest. Here are the five we come across the most often – bear them in mind when planning your fundraising activity. They should help improve your odds of success:1. Lack of industry knowledge
Investors tend to get involved with businesses they understand and sectors they have experience in, as it is easier for them to assess the opportunity and ultimately add value to the business. Whether you are looking for angel or VC funding, it makes sense to prioritise investors who understand your business and the market that you’re in.2. Complicated share structure and cap tables
Many start-ups rely on 'friends and family' funding in the very early stages of growth. This can be an effective source of early financing, but if it's not managed correctly it can create problems when looking for professional investment later. Avoid agreeing to any non-dilution terms on future rounds and try and keep your cap table short and as tidy as possible.3. Lack of confidence in the team
For investors it's all about reducing risk. Investing in someone with a track record of success or strong skills and experience in a chosen field is attractive. If you lack these, make sure you build a team around you with the relevant experience, have a clear understanding of the gaps in your organisational structure and substitute lack of experience with a boat-load of drive and enthusiasm.4. Financial stumbling blocks
Once an investor has decided they like you and the value proposition, they will pour over the financials as they offer a mine of information on the business. There are a multitude of potential red flags for investors at this stage and three of the major offenders are:
Trying to determine what something is worth is never easy and ultimately comes down to supply and demand. If you have an exceptional business and you have investors queuing around the block to invest then you are in the driving seat when it comes to valuation. If your options are limited you need to be sensible and look at the pros and cons of holding out for a higher valuation, versus getting the funds you need to realise your vision.
It is important to remember that whilst there are many investors out there hungry for the next big investment opportunity, none are obliged to invest in your business. Regardless of how excited you are about your proposition, without proper forward planning and the right boxes ticked, finding investment will be a laborious task. On the flip side, get it right now and you could very quickly find yourself a lot closer to achieving your personal and business goals.
Marc Kneepkens's insight:
Looking through investors' eyes. Find out why they say 'no'!
The lead instructor at the FBI’s Counterintelligence Training Center, Robin Dreeke, offers 10 techniques to build quick rapport with anyone.
**Warning – the content in this post is so effective that I encourage you to think carefully how it is used. I do not endorse or condone the use of these skills in malicious or deceptive ways**
I’m not quite sure how I came across Robin Dreeke’s It’s Not All About Me but I’m glad I did.
Robin is the lead instructor at the FBI’s Counterintelligence Training Center in all behavioral and interpersonal skills training.
And he wrote an awesome book on how to master the skills of communication.
His process not only includes research into social and evolutionary psychology, but it’s been honed from years of field experience.
I’ve been trying these out over the last few days and I’ve already noticed an improvement. Most importantly, I’ve put away my phone and focused on the person with whom I’m talking. This simple act of giving people my undivided attention has made a world of difference.
There are not many places that teach these techniques and I couldn’t have asked for a better guide than Robin.1. Establishing Artificial Time Constraints
I suspect you’ve sat in a bar at one point or another and been approached by a stranger who tried to start a conversation. My guess is you felt awkward or possibly even uncomfortable. This is because you didn’t know when or if the conversation would end.
When you approach someone to start a conversation most people assess the situation for threat before anything else.
2. Accommodating Nonverbals
This is a pretty simple one. You want to look non threatening. The number one nonverbal technique to use to look more accommodating is to smile.
This isn’t new. It’s the second of six principles in Dale Carnegie’s book, How to Win Friends and Influence People.
You can however accentuate your smile in a subtle way.
High chin angles make someone feel like you’re looking down at them.
Another key nonverbal is body angle. Standing toe to toe with someone else can be intimidating.
How you shake hands matters too.
3. Slower Rate of Speech
Speaking fast may mean you’re excited. It may even mean that you know what you’re talking about. However speaking slowly gives you more credibility.
4. Sympathy or Assistance Theme
If you’re like most people, you’ve felt a bit of regret for turning down someone seeking help.
5. Ego Suspension
This may be the most rewarding and most difficult of all of Robin’s techniques.
6. Validate Others
There are many types of validation. Robin identifies three of them.
And there is another benefit. When the focus is on the other person and we’re not anxious to tell our own story, we also tend to remember the details. We’re mindful.
Demonstrating thoughtfulness in words and actions with everyone in our lives is a simple and effective way to improve our relationships.
Validate Thoughts and Opinions
But if you remember that we like people who are like us, you’ll immediately grasp the power of validating thoughts and opinions of others.
The best way to get someone to do what you want them to do is to have them come up with the idea. The best way to have them come up with your idea is, no surprise, to honestly understand the other person’s point of view and then build upon that base with your ideas.7. Ask … How? When? Why?
It’s hard to answer these questions with a simple yes or no.
This means suppressing your ego and listening to what people are saying. You’re not thinking about what you’re going to say next. You’re not thinking about how the person is wrong. If you’re really listening then asking open ended questions based on the content of what they are saying should be pretty easy.8. Connect with Quid Pro Quo
In the context of a conversation this means giving up a little information about yourself in order to further the conversation and get a little from others.
9. Gift Giving
This is conversational reciprocation in action.
The key is to do this without an agenda. If you have an agenda you’ll come across as insincere.10. Manage Expectations
The surest way to avoid disappointment is to lower expectations.
If you’re looking to improve the connections you have with others, give it a read.
Get your Free Business Plan Template here: http://bit.ly/1aKy7km
Marc Kneepkens's insight:
Another article about Robin Dreke. Very effective ways to build relations and create trust. Learn from it for many different purposes: from customer service, to writing copy, to talking to investors.
The key is to make your funds last as long as possible until your business becomes self-sustaining. Concentrating on saving money and developing your business model will take your focus out of the relentless fundraising cycle. That’s how to create a business that makes money from customers instead of taking it from investors.
Get your Free Business Plan Template here: http://bit.ly/1aKy7km
Marc Kneepkens's insight:
Good advice. Start building a business, funding may follow, not the other way around.
When you start a business, there are many financing options to consider — friends and family, small business loans, angel investment, VCs — but there is no textbook solution for getting a new business off the ground.
One option that entrepreneurs, investors, and average Joes love to love is bootstrapping. Rather than seeking external funding, entrepreneurs who bootstrap their companies rely on savings, early cash flow and conservative money management. The age-old concept of the American dream lives on in the world of startups — we have pulled ourselves up by our bootstraps.
My co-founders and I have confronted the good, the bad, and the ugly of choosing not to use outside capital in the inception and growth of Ampush. Here’s my take on the double-edged sword known as bootstrapping:
Retaining Full Control
Without a board to impose its ideas, timelines or limits, we are able to be opportunistic, nimble and adaptive. We determine which strategic vision to follow. Since we don’t have to wait for approval, we can execute that vision or make changes at our own speed. We also learn at our own pace; we make mistakes but keep going. By retaining full control of the company, my co-founders — the people who understand the business best and run it day to day — and I are in control of its future.
For every pro of retaining full control, there is also a con. As an independent, we are responsible for making decisions that might be unpopular with clients, employees or partners, but that are right for the business. We are also unable to tap into the valuable networks of board members because — guess what! — we are the board. Because no one is looking over our collective shoulder, it can take much longer to figure out that we have made a mistake. These are not impossible hurdles to overcome, but it requires a little extra work and reaching out to mentors in the industry to lend their expertise.
Clients Take Center Stage
We often see other entrepreneurs build businesses that their VCs or boards want them to build, rather than ones their customers want. We don’t have that problem; we know who butters our bread (our clients) and we keep them front and center always when making decisions. We’re focused on their needs and making their lives better.
However, going at it alone can put limitations on our flexibility. What happens if we lose our biggest client? Everything will stop until they come back or we find other clients. Sometimes building the right solution for our clients is expensive and, without an injection of capital, we have to be scrappy when it comes to R&D.
Because there’s no “free” money floating around, each new team member knows and appreciates the value of a dollar. After all, the founders went 18 months without a salary and found a way to get their first clients and travel to conferences for free. At Ampush, we call this hustle. One of our mottos is Invest Rather Than Spend — it keeps the team focused on creative ways to solve problems. There will be times when we do need to spend on something or someone, like recruiting or internal tools. But we only do so if we can ensure that these expenditures will reap bigger rewards.
Without outside investment, near-term cash flow and revenue almost always matter. We constantly thread the needle: keep growing aggressively while managing cash flow and planning for rainy days. While this near-term focus ensures that business will keep driving forward, as revenue is the key to the future, bootstrapping can hinder forward thinking and building for the long haul.
Bootstrapping a company is no easy feat, but it comes with a whole host of rewards. We are in full control of our destiny. We focus solely on our clients and are always aware of our resources and how to get the most out of them.
Marc Kneepkens's insight:
VC's and Angel Investors will appreciate the fact that founders were bootstrapping and working with their own funds. It shows commitment and focus. Getting successful that way and then looking for additional funding allows them to invest in serious companies who will not squander their monies and who have a client base and working business model, not just and idea.
For those with a great idea and some investor cash, a down economy and a troubled job market mark the right time for a small business to take off. In many cases the risk-taking, innovative, emerging entrepreneurs are women. To be successful in what can still be considered a man's world is different than it was 10, 20 and 30 years ago. Today there is less talk about asserting feminism and more about doing things openly and creatively.
Be a chameleon
Tena Clark, a songwriter, producer and entrepreneur who is the CEO of DMI Music, has triumphed and sustained a vibrant career in the music business for almost three decades because she always evolved as both an artist and an entrepreneur. She watched the music industry change and discard hardworking artists and innovators, but was able to adapt instead of fighting to keep the way things always were.
“I’ve watched industries transform and jobs disappear,” says Clark. “But I kept having successes because I kept my fingers in so many pies so that if any part dried up, I had others to rely on. I never was just a one-trick pony.”
Be ready to start over
Every industry experiences the terrible moments where half the talk is about how the good years are over and how it’s time to move on to another industry. The other half tends to think if they stick it out and keep their head down, things will be okay. Find the middle.
“Sixteen years ago I was listening to two extremes of talk with my industry, and what I realized was that they were both wrong and that it was time to recreate,” says Clark. “I realized then that I had to be ready and okay with starting over and thinking differently, thinking with fresh ideas.”
Being bold with her business and thinking far outside the box was the only way to survive. But doing so took tremendous risk and separated Clark from the pack.
“I was always looking for how to do things differently,” says Clark. “Years and years ago I was asking questions like: ‘Why is the only place you can buy music in a warehouse or a tower?’ Or, ‘Why is music only playing on the radio? Why can’t it be heard in other places?’ I was thinking of those concepts before they were in practice today.”
Be a game-changer
Because Clark had branding experience from working in commercials and films, she was able to change the game of her industry.
“I was dangerous,” says Clark. “I was about connecting the consumer to the brands through music, and using the emotional power of music. I coined a phrase: ‘There is no better way to create loyalty than through emotion, and then there’s no better way to create emotion than through music.’ We approached brands through a marketing side. We didn’t have an agenda we were trying to sell you; we were just trying to sell your brand by creating a sound DNA and now the music footprint is everywhere: online, in stores, concerts, in webisodes, in gaming...it can touch you in any audible place.”
Have a strategy
Design and map out a plan with your team that everyone signs off on so it can just be plugged in and applied to clients and projects.
“I never had to worry about what the future of radio was or what the radio would or wouldn’t play because I had all these other non-traditional dependencies I’d mapped out," says Clark. "My strategy and my company’s strategy have been to never be dependent on one way of doing things. I get new artists and understand there are new ways to hear them. Then you start to be able to predict what will happen in your industry.”
Modernize the feminist approach
The 80s are over so there are battles that have been won and new challenges to conquer.
“It’s not about going in blazing guns with ‘I am a women, here me roar’ anymore,” says Clark. “There shouldn’t even be that conversation anymore. I don’t come across the sexist stuff like that anymore. So much business happens over dinner, on a golf course, and through good relationships. So it’s important as women to really have those relationships and build them with other women in the business world."
Befriend other CEOs and entrepreneurs
Find other women you jive with in the business world whether they relate to your business or not. They can be mentors or you can be theirs.
“It’s been the best way for me to network and to give me confidence because from the male standpoint if you don’t respect yourself, then you’re aren’t going to be treated with authority," Clark says. "It’s about being you and being real. Building a group of fellow CEOs from various companies is empowering.”
Don’t equate nice with weak
For too long it’s been portrayed that a woman in power has to be a woman who is also ferocious. The reality is that being a genuine, honest person who is a forthcoming and loyal person is someone who is strong, and anything but weak.
“To be at the top and kind isn’t a weakness,” Clark. “People see being nice as a weakness and it’s not. As long as people know this is the way it is in your company and that’s it, then they know you mean business and you’re free to be human to one another.”
Seek change where it’s needed still
Female entrepreneurs still aren’t seeing an equal distribution of private equity, says Clark. “There is a lack of funding from VCs. It is still very uneven here for women.” One solution Clark suggests is working with female venture capitalists that specifically seek out private equity for female entrepreneurs.
Be in charge
Embrace being at the top and be confident with it. Clark owns 51 percent of BMI Music and her partner owns 40 percent.
“I couldn’t have done it any other way,” says Clark. “We don’t have any issues over power struggle, or dominance when you choose your partner wisely and put everything in writing."
Have a great support system
Surround yourself with people who believe in you and are your biggest fan.
“You need those people on the outside who see the barn is on fire and aren’t afraid to tell you to put out the flames or just let it burn,” says Clark. “Those people on the outside with your best interest at heart know how to help you tweak things and make things work better.”
Via The Fish Firm
Marc Kneepkens's insight:
They've all managed to make the tricky jump from great idea to great company.
Anyone who has made it through college knows that ideas are cheap. Every conversation in the classroom, on the quad or at the coffee shop is littered with them--some great, most awful. On occasion, the spitballing even spawns a bit of short-lived business action (witness all the broken links on any Best College Startups internet list from the past few years). o Clearly, it's not just an awesome idea that makes a college startup great. It takes follow-through, patience and business smarts to transform a dorm-room musing into a viable business. Here are some college startups that made the leap from good idea to great company.
The perfect fix
In 2012, Spencer Quinn was a junior at Brigham Young University in Provo, Utah, working a summer job at a company that sold athletic tape, when he heard about a doctor who used medical casting tape to fix an all-terrain vehicle. It was an "aha" moment for Quinn, a biotech major.
Along with his cousins Reed and Chris Quinn and brother-in-law Derek Rowley, Quinn attempted to repair household items using casting tape. "I thought maybe this stuff could fix more than bones, so we started putting it on broken tools, leaky pipes and other stuff," he recalls. "It was not a good solutionThose efforts didn't work, but the trio got to thinking about what elements would make a better repair tape. The product would have to go beyond duct tape to create a permanent bond, and it would need to be waterproof and able to withstand impact and heavy loads.
They worked with the BYU mechanical engineering lab to find a solution. Once they had a prototype, they took it to an adhesives manufacturer to work out the production process. The result was FiberFix, which, after being soaked in water and applied tightly, can permanently repair shovel handles, leaking pipes and just about any other broken object.
But creating FiberFix was just the first step. "I think so many products fail in the manufacturing and logistics stage," Quinn, now 25, explains. "You have to learn how to approach big retail buyers and know how to execute your product in such a way that you don't get chargebacks that kill the company. After that first sale, 99 percent of the work is still ahead of you."
The team worked trade shows, demonstrating their miracle product to hardware and construction experts, and entered their idea in competitions. They won events at BYU and placed second in the International Business Model Competition. But their biggest coup came in October 2013, when they were featured on TV's Shark Tank, where they convinced judge Lori Greiner to invest in their concept.
That led to multiple stints on QVC, where they sold 45,000 rolls of FiberFix in 10 minutes. The product is now carried at 10,000 retail locations, including Home Depot and Lowe's. More than 1.3 million rolls of FiberFix have been sold at $6 to $10 each.
Despite the success, Quinn and his business partners are dedicated to finishing their education, though on a more relaxed schedule.
"I was initially nervous that I wouldn't get enough support from my professors to do both things, but I haven't found a single one that wasn't excited about the opportunity and supported us," says Quinn, who hopes to expand the FiberFix product line over the next three to five years before selling the company. "BYU has lots of entrepreneurs and great talent. I think everyone here likes a good success story and wants to be a part of it in some way."
Let's go to the tape
Lindsay Stewart was a TV news producer in Los Angeles before enrolling at the Wharton School's San Francisco campus in 2012. The idea was to get a few letters behind her name to help make her way up the ladder on the management side of the media business.
In one of her classes, students were asked to pitch a business idea. For several years, Stewart had been thinking about the inefficient ways news outlets acquire video footage. Deadline-focused assignment editors are often forced to buy tape sight-unseen from third-party stringers; at times they even contact people through YouTube. News stations go to air with whatever images they can find, good or bad. On the flip side, Stewart knew great photographers and videographers who missed out on work because they had no way to communicate directly with editors. And the payment process was equally slow and messy.
When she proposed her idea of an online exchange where editors could view and purchase news footage, and photographers (and the public) could show their work and find assignments, her classmates were intrigued. But it wasn't until fellow student Brian McNeill filled her Dropbox with plans and calculations that she realized her concept, which she dubbed Stringr, could be a viable business.
"It was having someone throwing their weight behind my idea that was the genesis of Stringr," Stewart says. "You can go to the best business-school program, but it's not so much about the academics as it is who sits next to you. Classmates helped write the business plan and build the tech stack. They gave me all that human capital for free, and that's what helped us launch Stringr."
Through the rest of their time at Wharton, Stewart and McNeill, both of whom graduated in May, refined their concept. They're now based at the San Francisco media accelerator Matter, where they have five engineers on contract. Stringr, which launched a three-month pilot in the San Diego news market in August, plans to roll out to several more pilot cities before expanding to newsrooms around the country.
Unlike other college entrepreneurs, who often have nothing to lose, Stewart, 34, and McNeill, 37, are taking big mid-career gambles with their startup. "I think doing something like this is totally different than when you're younger," Stewart says. "There are more risks--I sold my house to do this; I'm not taking a salary. But my contacts are wider and deeper; I'm able to navigate and sell to bigger companies. I'm not a 19-year-old selling a pipe dream."
McNeill, who tried to start a tech company during the dot-com boom of the late 1990s, agrees that things are different this time around. "Without a network or capital to get you down those first 50 yards, starting a business is extremely difficult," he says. "At the same time, the opportunity loss is high. I walked away from a partner-track job at Ernst & Young. But leaving that behind has given me more confidence in what we're doing."
The founders agree that their entrepreneurship classes helped them clarify their once-hazy expectations. "One of our professors ended our class by giving us the stats on our education and experience," Stewart says. "He said less than 1 percent of the population was as prepared as [we were] to start a business, and he ended by saying he hoped we would try. That was very inspiring. This is not just an idea for me. I feel passionate about it."
A global cure
For all the debate about healthcare in the U.S., it's easy to lose sight of the fundamental problems plaguing medical systems in other parts of the world. In developing countries, people often die from lack of basic medicines, blood or operable surgical equipment.
During one of her first classes at the University of Michigan in Ann Arbor, chemical engineering major Carolyn Yarina stumbled upon this reality. Assigned an open-ended engineering challenge, Yarina turned to a campus club that had recently surveyed rural health workers. One of the needs in Africa, the survey found, was a centrifuge that could run without electricity, allowing clinicians to diagnose and treat diseases in areas without power.
Yarina took on the challenge, and by the end of the semester she and a team of students created a human-powered centrifuge built from bicycle parts. It was a neat engineering feat, and Yarina didn't want the idea to die with the end of the class. So she created a student group called CentriCycle to continue work on the project. She also enrolled in entrepreneurship classes, including a practicum in social entrepreneurship, which convinced her to go to India for the first time.
"I learned a lot on that trip, which led to a lot of changes," she recalls. "I realized what they needed on the ground, and using a bicycle was not the best idea."
Returning to India over the next two summers, she refined her concept and developed contacts. After graduating in 2013, she worked on her centrifuge full time, eventually developing a portable machine dubbed (r)Evolve that can alternate between manual power and electricity. She also lined up engineering and manufacturing support in India.
But it dawned on Yarina that she needed to go further. "Once I created our student organization and started going to business classes, I had an epiphany," she says. "Open-source designs are not a viable option if you actually want to get your product out there. If it was just about creating a process to separate blood, we would have been done four years ago."
Early this year, she and CentriCycle member Katie Kirsch teamed up with another University of Michigan grad, Gillian Henker, who is developing Hemafuse, an auto-transfusion pump for blood. Together, they started Sisu Global Health, a socially conscious for-profit company, as a platform to deliver medical products designed specifically for the needs of developing countries. The centrifuge and auto-transfusion pump are their first two offerings.
"Eighty percent of medical products are designed for 10 percent of the world," Yarina explains. "Designing for that other 90 percent is what we want to do."
The 24-year-old says she never expected to be at the helm of a company, but she's glad her life has taken this turn. "During freshman orientation they took us on a tour of the Center for Entrepreneurship. I remember I couldn't wait to get out of there," she says. "I never thought I'd do anything with entrepreneurship. After learning how to turn this idea into something that could impact people's lives, I've realized entrepreneurship can be more about making an impact than making money."
Marc Kneepkens's insight:
Three examples of great ideas with the right follow through.
"Startups are so weird that if you trust your instincts, you'll make a lot of mistakes."
Y Combinator co-founder Paul Graham gave a 45 minute presentation to a class full of Stanford students, which he summed up in 4,000 words on his blog.
His main point: Startups are counterintuitive. If you want to start one, there are six unusual things you should realize about running a company.
"Startups are so weird that if you trust your instincts, you'll make a lot of mistakes," Graham writes.
Here are the main points he makes:
Marc Kneepkens's insight:
Some refreshing ideas. That explains why a lot of wannabe startups fail and why lots of money and time are wasted.
Fact: Most start-ups fail. It's the harsh reality that is overshadowed in a world overflowing with enthusiasm and optimism.
Fact: Most start-ups fail. It’s the harsh reality often overshadowed in an ecosystem overflowing with enthusiasm and optimism.
No matter how hard an entrepreneur works or how much excitement they attempt to generate, few start-ups manage to become viable businesses. Sad, but true.
So why do start-ups fail?
According to CB Insights, the two biggest reasons are “no market need” and “ran out of cash”.
It’s fascinating – and troubling – that “no market need” topped the list because you think it is something that entrepreneurs should know before launching a start-up.
But start-ups are strange and alluring creatures. The idea of a start-up attracts entrepreneurs but the reality is often very different.
Maybe entrepreneurs have blinders on, and their enthusiasm overwhelms anything negative.
Whatever the reason, too many entrepreneurs happily jump on the start-up bandwagon without really thinking things through.
The first and most important step for a new start-up is seeing if there’s a need for the product, or whether that need is already being served. Dan Martell summed it up best with this tweet:
Ask “What problem are you solving?”, not “What product are you building?” – customer first.
The big problem is too many start-up don’t think about the customer. Instead, they focus on the product because, after all, product is apparently king. As a result, the focus is lots of features, rather than creating something that customers need or want.
This product-centric view of the world explains why “no market need” is #1 with a bullet. If you’re not thinking about the customer, you’re pretty much doomed.
It’s not enough for an entrepreneur to create something by being inspired or by meeting a personal need. They also need to validate the idea with potential customers. It sounds like a no-brainer approach but many start-up products happen in a vacuum.
In a recent blog post, Martin Zwilling talked about how entrepreneurs need to give their ideas a “reality check”. One of the seven items on his “reality check” check list was “separating nice-to-have ideas from ones solving painful problems”.
“All your friends may love your idea on how to find the nearest bar or gym, but how many others are willing and able to pay money for your solution? Even good social causes need to bring in revenue to continue their worthy efforts. Ask domain experts to quantify value for you.”
It’s solid advice but start-ups are seductive creatures that quickly get you in trouble. It is difficult to tell an entrepreneur their ideas sucks when they are stoked about its potential.
But with so many start-ups failing because there is “no market need” (aka a bad idea), being honest with entrepreneurs about their idea’s viability is an evil necessity. Hearing the truth may stop an entrepreneur before they go too far, or give them some valuable food for thought.
It could also get entrepreneurs to stop thinking that start-ups are easy. Instead, they will see that start-ups are challenging and involve hard work, and having the right product at the right time.
Final thought: A start-up that doesn’t work out is not necessarily a bad thing because there are valuable lessons from failure. But there’s really no excuse for “no market need” to top the list for why a start-up doesn’t make the grade.
Marc Kneepkens's insight:
Startups solve problems.
Mark Twain noted few souls are saved after the first 10 minutes of the sermon. Your pitch has, maybe, half that time.
When it comes down to it, you only have five minutes to convince people your product is disruptive and something people will actually buy.
As a tech startup, you are probably fluent in the language of investors, tech journalists and entrepreneurs. But sometimes, your needs call for you to step out of the tech bubble and pitch to an audience that, figuratively, speaks an entirely different language.
Recently, we faced this challenge when pitching our new product Katana at Grow Fashion, an event for fashion ecommerce business leaders in New York City. We were a bunch of tech nerds pitching a virtual customer service solution at a fashion event in New York City. This called for an entirely unique approach to our standard tech pitch.
To prepare, we did our due diligence and even pulled a couple all-nighters. But it was all worth it when we saw the line of executives waiting to give us their business cards as soon as we got off stage. Next time you pitch, here are some things to keep in mind to make your pitch stand out:
1. Do some research. Find out who your audience is. Cater the pitch specifically to their problems and needs. An effective pitch is a relevant pitch. For our GrowFashion pitch, we asked our friends who worked in ecommerce their pain points.
We learned customer engagement and loyalty are major issues for many online brands, so we focused our pitch on the importance of a unique customer experience. We touched upon the limitations of creating a great customer experience online and how important it was to have human-to-human contact to create brand loyalty. In this way, we began framing our product as a solution in a very organic way.
2. Connect with your audience on a human level. No matter how revolutionary your product is, it cannot sell itself. Introduce yourself them as person with a life outside of your startup. Share pictures, an embarrassing “fun-fact”, or just give them some family background.
Remind your audience that you are human too. It’ll give them something to remember you by.
3. Tell a story they can relate to. Once you understand their pain point, make it known you've experienced it too. Share an anecdote and give them some insights into how this makes you feel as a customer. We walked our audience through the in-store shopping experience and what we loved about it.
“We walk into a store and people know our name, ask us personal questions, and tell us how great we look in a particular pair of shoes...” This got them to consider how we can transfer this experience to the digital landscape, something we know they've been thinking about.
4. Share facts. Build trust. Get them to think about you as a thought leader, not as a salesperson. Put together some compelling quotes from articles and interviews. For us, it was all about how improving the customer experience can help retain more customers, create stronger brand loyalty, and establish a more engaged community. At this point, we had our audience thinking: How can we improve our customer experience?
When you show you are well versed in a subject, your audience starts to trust you.
5. Be subtle -- don't give it all away. This one can be a little tricky. While it's important to showcase your product, there's no need to walk through each feature like you're selling a car. What is it that is going to attract people to your product or service?
When you present your startup as a solution to their problem, you begin to create interest. Show them a preview of what you've got, but hold off on the tutorial until they've made the transaction—leave it up to the audience to connect the dots.
6. Make them laugh. Crack a smile and remind them, yet again, that you are human. Don't risk taking yourself too seriously. Say something silly. If you've lost their attention, you're likely to get them right back with a little unexpected humor.
7. Create a sense of urgency. Point out their competition. Find an example of how one company is using a similar product to convince them that they must act now.
We introduced our audience to Amazon's Mayday video chat customer support to reminded them they were late to the game. Just how much longer are they willing to wait before a competitor beats them to market and lures their customers away?
8. Make a bold statement. Make it really easy to extend your reach beyond the conference. Come up with a few unique statements that are less than 140 characters long. These tweetable lines will get your audience sharing your pitch with their networks.
9. Make your final words count. Give your audience a reason to come see you after your pitch. Your last line is what they will walk away with.
Ending with a generic “Come sign up for our product now!” leaves your audience with only one reason to approach you. Try a friendlier, more approachable conclusion: “learn more” or “come say hi.” You'll have the opportunity to attract a much larger, more enthusiastic crowd.
Using these tips to pitch our startup at GrowFashion got us the attention of Fortune 500 companies and taught us how to make a valuable connection with our audience and leave a lasting impression in less than five minutes.
Via Samuel Pavin
Marc Kneepkens's insight:
More tips to understand what investors want.
Launching a startup takes a great deal of courage. Some initially successful entrepreneurs don’t fully grasp the proper strategies for sustaining their efforts.
Startup success depends on taking risks, having faith, and being patient and persistent. Without these qualities, the smartest businessman will be unable to sustain the enterprise.
Personal resilience is a large part of the equation, certainly, but startups also require calculated business moves to ensure long-term success. If you follow the six guidelines below, you’ll have a better shot at achieving long-term success.
1. Set goals
To endure the inevitable growing pains that will occur if your startup manages to last beyond a successful launch, you have to set both short- and long-term goals. Every business needs to dream big, but it must also pay attention to the details and identify the practical steps necessary to reach more elaborate goals.
Some long-term goals would be extremely practical, however. When Adventure Life’s founder, Brian Morgan, started his business in 1998, he spent a total of $45,000 on advertising in 1999-2000.
Many people might find this too big a risk, but by 2008 Morgan’s company was bringing in $11 million in revenue. His short-term choices led to a long-term achievement.
2. Invest in business consulting
One of the smartest things a new startup can do is spend a little money on business consulting.
According to CSG International, a combination of innovation, goal setting, and balancing of resources is important to realize growth.
Since business is constantly evolving, you can find it a challenge to stay up to date on the latest trends in technology, marketing, content strategies, and more. Startups need to know how to utilize every dollar their company starts with and generates to create some form of return on investment.
Learning how to match technology with practical business strategies will lead to more success across multiple channels. Expanding this area of your business will open unexpected doors to special niche markets that are possibly unnoticed and untouched by competitors.
Finding your unique role can be a big part of success, and a sharp business consultant can help you uncover new areas of potential.
3. Don’t be afraid of unconventional strategies
Don’t get in the habit of making up excuses. Businessmen and women who are afraid to take risks won’t achieve much.
Risk-taking is a part of any thriving business, and learning to trust your instincts and move away from traditional business models will set you apart from your competition.
Apple’s founder Steve Jobs once said: “Remembering that you are going to die is the best way that I know to avoid the trap of thinking you have something to lose.” Jobs’s work is a testament to the practice of taking risks.
From the company’s launch to becoming a competitive cell phone provider, Apple has constantly taken alternative routes to place itself at least two steps ahead of the competition.
4. Fill in where competitors don’t
Watch how your competitors operate and observe the more established members of your industry closely to discern the places where they might not be meeting all needs and expectations. Identify their weak spots, and learn how to focus your business on addressing those neglected areas.
This demonstrates your value to the consumers, and they will recognize your effort to offer an alternative to traditional providers.
5. Keep changing
The business arena never stops transforming. Especially given the large role technology plays, companies have to think quickly to keep up with trends, new competitors, and new markets.
Startups play a unique role because they often threaten to destabilize the norms of the existing industry. Capitalize on this! Watch trends and stay current, and don’t be afraid to try new things.
6. Work toward growth
Growth doesn’t happen automatically. It requires discipline, consistency, and persistent efforts to sustain performance by a startup.
Think about the essential elements required to propel your startup toward its goals, and develop practical strategies for obtaining the growth you desire. Pinpoint which type of people you need to hire, which functions are most vital for success, and how you can cultivate a sustainable business model.
With enough creativity, determination, and courage, any startup can grow into an established industry member. Building a well-oiled machine takes time and risks, but the right balance of non-traditional business ideas combined with practical tactics of execution can evolve a powerful business force ready to withstand any competition.
Get your Free Business Plan Template here: http://bit.ly/1aKy7km
Via Raj Nadar
Marc Kneepkens's insight:
Get your startup up and running before applying for funding. It'll be much more likely to catch the investors' eyes.
Finally the SMS arrived:
“Tomorrow morning 5am, flight number AZ610 from Rome to NewYork.”
An SMS hitting my BlackBerry on Sunday evenings used to decide my destination and client for the coming week.
I was working for one of the top three global strategy consulting firms.
A life packed in a suitcase. A consulting life where you miss out on everything and everyone in life, except Excel spreadsheets. A fancy business life we are taught to be ideal slaves of, at top business schools whose degrees we are proud to hold.
After few hours of sleep, the private driver was taking me to the Rome Fiumicino airport so I could take my fancy business-class flight to NYC. Upon arrival, I was checking in to a fancy five-star hotel and heading to my client’s office afterwards.
The salary? It was fancy, too. The company was proud to be among the top payers of the industry.
There was something wrong with this consulting life, though. I couldn’t stand this bullsh*t any longer and one day I called my parents:
“Dad, mom, I just quit my job. I want to start my own startup.”
My mom almost had a heart attack. It wasn’t the first thing a perfectionist mother wanted to hear after encouraging me to graduate from the world’s top business schools with top grades.
I tried to ease her distress. No chance.
“Mom, I hate it. All these consultants are pretending to be happy and they are taking happiness pills. I get to sleep only 3–4 hours a day. All those benefits the company promised don’t exist. Remember the fancy five-star hotel? I am working almost 20 hours a day and I don’t even enjoy it. Fancy breakfast? We never have time to have that. Fancy lunch, dinner? It’s just a sandwich in front of our Excel spreadsheets.
Oh, by the way, instead of enjoying a champagne, I stare at spreadsheets during my entire business class flights, too. The fancy salary? I never have time to spend a single penny of it.
I hate my life, Mom, it’s such a loser life. I don’t even see my girlfriend. I can’t fake it anymore. I want to start my own business.”
My parents had retired after years of a 9–5 working routine at their secure and boring government jobs.
I knew that coming from a family with no entrepreneurial background, it would be difficult to explain my situation to them, but I didn’t expect the call next morning.
It was my mom on the phone:
“Sooooooooo, how is your business doing?! Is it growing?!”
No matter what I said, I couldn’t explain to her that a business needs more than one day to grow.
Girlfriend, Friends & Social Circle
Having had the most supportive girlfriend ever, it was now time I shared the news with my friends who were busy climbing the fancy career steps in the fancy corporate world.
I told everyone that I just quit my job to follow my startup dream. Some of my friends gradually stopped seeing me, probably because they thought there was something wrong with me since it was the second “fancy” job I had quit in a short period of time.
While the rest of my friends were supportive, there was, however, still something wrong with my relationship with them:
I soon realized I was starting to pull myself away from social gatherings.
Every time I met with those friends, I didn’t have many updates to give them in response to their repeated questions, such as, “So, how is your startup going? You are going to be the next Zuckerberg, right?” “Oh man, we are so proud of you and we are so sure you will soon receive a huge round of investment.”
Doing a startup was a long journey and I was putting myself under so much pressure by giving such a f*ck about what other people think.
Day by day, I was getting lonelier and more depressive as I avoided social occasions. My startup progress was not as fast as my social circle imagined it to be and I was fed up with telling people it took years for startups like Facebook and Twitter to arrive at where they are now.
The only comfortable place was next to my few entrepreneur friends. It was true, only an entrepreneur could understand an entrepreneur.
Cash, cash, cash.
As if the social pressure and loneliness were not enough, I was meeting the mother of all stresses: running out of cash much faster than I had imagined.
This was killing my productivity and ability to make proper decisions. I was panicking and rushing to be successful and to make money.
One day, I even found myself asking my girlfriend for a few cents because I had no money to buy bottled water. I didn’t know it was just the beginning of such a difficult life full of ups and downs…
Enough with the drama: more than two years have passed since those days. I am now writing this blog post in a beautiful resort in Phuket, Thailand, while enjoying my mojito.
Wait, I am not selling a dream. No, I haven’t become a millionaire startup founder.
However, my business has a constant stream of cash that allows me to travel the world and to work from wherever there is WiFi.
There are, however, five things I wish I had asked myself before starting this painful journey. Five questions I believe every future entrepreneur should ask himself before taking the first step to entrepreneurship:1. Are you ready for the social pressure?
If you have friends and family who are not entrepreneurs, they won’t truly understand what you are trying to achieve and the public pressure will be even higher.
I cared so much about what other people think of me– so much that it ruined my life.
I was so hard on myself and punished myself with even more work so I could announce my success as soon as possible. That is, until the day I realized no one gave a f*ck about me, so why would I?
You are no more than a few seconds of attention other people give to a Facebook status. In 2014, no one has time to care about others in such a crowded, noisy world.
If you care so much about what others think, you will waste your time trying to prove that you are successful instead of focusing on your startup.
Get a life. I got mine quite late.2. Are you single or do you have an extremely supportive partner?
As we grow up, we share more of our life with our partners than with our friends or family. While I was lucky to have such an amazing girl, it was so sad to see many of my entrepreneur friends breaking up with their girlfriends along the way.
Doing your own business is tough – way tougher than I could have ever imagined. Your mind is constantly f*cked up with a million things going on inside and no other person, including your girlfriend, has a single clue what is going on in there.
If you are not single, make sure your partner understands it’s sometimes normal not to have a mindset even for a simple kiss.
Yes, for a simple proper French kiss.3. Do you have enough cash to last at least a year?
Good, then multiply that amount at least by three because you will be running out of your savings way faster than you ever imagined. Along the way, there will be so many hidden costs, accountant fees, lawyer needs, broken iPhones or PCs, etc.
Get ready for a smaller apartment, smaller food portions, or counting your cents, which you never cared about in your life previously.
The last few months before you totally run out of your cash will be especially difficult and the pressure will grow so exponentially that you won’t be able to sleep properly.
Success will come slowly, and cash will burn fast. Be smart – plan from day one.4. Are you ready to sleep only few hours a day?
Having escaped from the corporate consulting world, I was thinking I was finally going to live the dream by working whenever I wanted to work – until I read Lori Greiner’s following quote:
“Entrepreneurs are willing to work 80 hours a week to avoid working 40 hours a week.”
It all started by little wake-ups in the middle of the night. At the beginning, it was because I was too excited about my ideas and I had so many of them. I simply couldn’t wait for the morning to arrive so that I could start working again.
Then came the exaggeration phase. I was working too much because I never had enough of working for my idea and I wanted to do more. However, the more I worked and the later I went to bed, the more difficult it was to fall asleep and the lower the quality of my sleep became.
As a result, at least two or three days of every week I was having days with almost no productivity.
Don’t be fooled by my fancy Instagram picture above. Don’t be fooled by over-hyped funding news about startup founders becoming millionaires.
The stories behind the scenes have so many painful days, sleepless nights, and continuous rejections and failures.
The journey to success is long. Very long. Very often, too long.5. How do you define success?
Each of us has a different priority list in life. For most people, money is the number one priority on the list, while work-life balance ranks higher for others. Consequently, people define success differently.
Depending on your definition of success, the difficulty of your entrepreneurial journey will differ, too. If money and public success are what matters to you the most, you are likely to have a hard time along your journey.
Remember Hemingway’s wise words:
“It is good to have an end to journey toward; but it is the journey that matters, in the end.”
Successful entrepreneurs are not necessarily those who raise millions of investment rounds. Don’t forget, they are one in a million.
There are, however, thousands of dreamers out there who manage to bootstrap their startups or live so well off on their own, but even they do not make it to the top of tech news.
No matter how much your journey f*cks up your life or how difficult it will be, enjoy the ride and keep following your passion. As Tony Gaskin puts it perfectly:
“If you don’t build your dream, someone will hire you to help build theirs.”
Marc Kneepkens's insight:
Here is a fun article with some wise conclusions. Valuable warnings before starting the 'startup' life.
Women make up about 20 percent of both the entrepreneurs and investors involved in angel investment deals, up from single digits a decade ago
In 2009, when Amy Norman and Stella Ma started pitching investors on their San Francisco-based startup, Little Passports, both had young children and Norman was pregnant. The overwhelming majority of the investors they met with were men who wanted to know “if we were running this as a ‘lifestyle company,’” Ma recalls. Investors passed and word got around Silicon Valley that “there’s no way women like this could grow a company fast enough” to satisfy venture capitalists, Norman says.
Yet grow it did, to $5 million in revenue five years later. Norman and Ma eventually raised nearly $2 million for their education business, which sells monthly subscription packages to help kids learn about geography. Much of the funding came from a female investor group that saw in the idea potential that eluded many men.
With ‘brogrammer’ culture spreading through the male-dominated world of tech, Little Passports’ experience reflects a contrasting trend: Women are running an increasing number of America’s startups, and they make up a growing share of the angel investors funding them. Today women make up about 20 percent of both the entrepreneurs and investors involved in angel deals, up from single-digits a decade ago, according to the University of New Hampshire’s Center for Venture Research (PDF).
Women made up 23 percent of all entrepreneurs seeking angel capital in 2013, up from 9 percent in 2005. There were fewer than 20,000 female angel investors in 2005, but that number increased to nearly 58,000 by last year.
The group that funded Little Passports, Golden Seeds, was founded nine years ago, making it an early female investor group. Managing director Jo Ann Corkran says the group has 300 investors, 72 percent of them women. They are committed to investing in companies that have in top executive positions at least one woman who holds significant equity and decision-making power.
All together, members from chapters in New York, Boston, Silicon Valley, and Texas have invested $50 million in 61 companies, Corkran says. The group also holds regular open office hours, giving company founders a chance to meet informally with experienced investors.
There’s no mystery about why women are underrepresented in the investor community, Corkran says. “If you make 77¢ on the dollar and you compound that over a lifetime, you end up with women having a lot less free cash flow.” Corkran is aware of the perception that women aren’t as comfortable with risk, but she doesn’t buy it. “They are as thoughtful and as willing to take a knowledgeable, considered risk as anybody else,” she says.
Natalia Oberti Noguera, founder and chief executive of Pipeline Fellowship, an angel investing boot camp for women, agrees. Since its April 2011 launch, her program has trained more than 80 women, who have committed over $400,000 in investment. Having started in New York, the group has expanded to Atlanta, Austin, Boston, Chicago, Los Angeles, Miami, San Francisco, Seattle and Washington.
The idea came about after Oberti Noguera attended a gathering of nearly two dozen investors as one of two women in the room. “These people were deciding whether or not to invest and they went around the room saying, ‘Well, my wife and her friends say this,’ or ‘My girlfriend says that.’ I realized then and there that women do not have a seat at the table.”
A Silicon Valley pitch-fest at which her all-female team presented to an all-male investor panel provided a further vivid lesson. “We were told, ‘The fact that you’re an all-woman team is too distracting.’ I came out of that realizing that we weren’t taken seriously,” she says.
If women are becoming increasingly influential as angel investors, however, they still have a way to go in the venture capital world. Alyse Killeen is an associate at March Capital Partners in Los Angeles, specializing in the fields of health and life science. Last year, she founded a networking and professional development group called Women In Venture. The group has about 18 members, but only two—herself and one other woman—currently hold jobs at venture capital firms.
The group’s goal is to provide encouragement and professional development that will help keep women in the field and advance them. Women now make up just 4 percent of venture capital partners. “We want to make it at least 20 percent women,” Killeen says.
She feels that along with her efforts, entrepreneurs themselves are pushing advancement for women. Both male and female founders are actively looking for diversity in their investment teams and on their boards and management teams, she says.
“We have had a few competitive deals come in because entrepreneurs who could have chosen from between 20 to 30 firms chose us because they wanted to work with a woman investor. It’s like, ‘Listen, all of our engineers look essentially the same, but we believe you can help us recruit women, and that will give us an edge,’” Kileen says.
Oberti Noguera is also hopeful, but says she won’t back off any time soon. “I tell people, don’t complain,” she says. “Just raise awareness of the issues and disrupt within the system, while creating our own systems. That’s the way we’re going to make progress.”
Marc Kneepkens's insight:
Women bring a whole new perspective in funding. They work with different kinds of startups and bring in different criteria, balancing out the male dominated world of funding.
If you’re a young startup with a gleam in your eye, a working prototype in your back pocket and very little else, then making the right first step will be crucial for success.
For founders with little-to-no previous startup experience,joining an accelerator makes a lot of sense. Even if you’re a seasoned pro with an exit or two under your belt, a helping hand might still be useful.
Traditionally, accelerators provide a combination of things; primarily a small amount of funding, a space to work and access to mentors, industry bodies and individuals they would otherwise struggle to gain the attention of.
However, while many accelerators are open houses in terms of their focus, there’s been a growing trend of certain businesses to host their own in-house programs, or take part in accelerators that are designed to connect brands with tech startups.
So, how does a brand-focused accelerator – that is, one that promises startups an audience with relevant world-leading brands in their area of focus, or one focusing a specific segment of industry, differ from a more general approach? We spoke to Brandery, Collider, The Bakery London and Orange Fab to find out what they had to offer.What do startups get out of brand accelerators?
So, what a startup gets out of a brand accelerator is pretty similar to other accelerators – although the specifics of the funding and other benefits often vary.
For example, Collider – a UK-based organization that works with more than 27 individual brands – gives startups a combination of oversight, cash and mentorship over a program lasting 13 weeks.
Each of the Collider startups this year will get up to £150,000 ($243,000) – increased from up to £70,000 – to help them bring a product to market, its co-founder Rose Lewis explained. However, it’s the focus on a specific vertical and the added exposure Collider gives the startups and brands that really makes the key difference, she argues.
In the first four weeks of our accelerator, they meet with up to 12 brands – all giving their time to the startups, and all [based] around the product marketing questions: are these businesses building stuff that William Hill, Unilever, Haymarket are going to buy?
Brandery‘s four-month long program is similar to Collider’s – it provides support for seed stage companies in the form of $25,000 in funding, mentoring and access to a host of discounted or free services (such as IT, HR, legal etc.). Brandery also provides one year of free office space for a year, general manager Mike Bott explained. Collider does not offer physical work space.
Similarly, during Growth Hack Day, the startups, their creative agency partners, and brand managers from Procter & Gamble hammer out key parts of the startups’ marketing plans, including user acquisition strategies, go-to-market strategies, and other ‘growth hacks’ they can use to keep the startup growing and retaining users as quickly as possible.
One of the startups to come through Brandery’s program – and now a part of Disney’s accelerator is ChoreMonster. Chris Bergman, founder and CEO of the company told us that the experience was “incredible” for the company.
Slightly differently, while Brandery and Collider tend to focus on seed stage startups looking to develop their business rapidly for the long-term, The Bakery London exists solely to accelerate ad-tech and marketing startups to a test market within eight weeks.
Its focus is increasing revenues, not scoring investment, its co-founder Alex Dunsdon explained to TNW.
Dunsdon added that it takes very little time to accelerate a technology to trial stage, so the only real reason you’d perhaps want to look elsewhere is if you were looking for investment to get off the ground, rather than looking for a perfect market fit.
For other startups, there are reasons to think twice about joining a specific brand’s accelerator program.
For example, if its technology isn’t particularly well aligned with the brand, or because the startup fears that association would jeapordize its independence. It might also make more sense for a startup to enter into an accelerator program based on a specific topic, rather than a specific brand, such as FinTech or health-oriented programs.
The funding aspect of brand accelerators like these are in contrast to the way in which Orange Fab operates: there’s no systematic cash support, although it does provide a convertible note option for interested startups – up to €15,000 in France and $20,000 in the US. Instead, at the end of the program, Orange’s VC division can choose whether or not to invest in the startups.
Douplitzky said that VC affiliates like Iris Capital tend to make minority investments in startups, but that the program launched too recently to provide details on the percentage that receive follow-on funding.
Ultimately, whichever accelerator a startup enters, they generally provide similar benefits on the surface, and an underlying promise of more closely connecting each startup to a brand, whether that’s a single one or mutliple. In some cases they also provide the potential to add legitimacy to startups simply through their association, which is a slightly less tangible benefit.