Posts Tagged ‘Entrepreneur’

Loving the Underdog! PART3 – Why we Love ‘em

July 18, 2011

This is the final part to my Loving the Underdog blog series, with previous posts: PART1: The 800lb gorilla and PART2 – City of creation.

I’m continually amazed by the support and help my startup gets from other startup founders and company employees. They seem to go out of their way to help and support us without expecting anything in return. I’ve previously called this support Startup Karma in my ’5 shocking things founding a startup’ post. This help is core to our economic innovation and creativity. Without startup karma we would be ruled by the same corporations forever!

Getting by with a little help from my friends
Nottingham Young Entrepreneurs Event

Startup Karma surprises and shocks you when it happens. Other founders survived to tell their tale and know exactly how hard it really is. Employees have recognised or have seen what a challenge a startup is. These people introduce you to others, give you valuable advice or become your early customers. They give you assistance when you really need it. They even sometimes put themselves into a difficult position to help. The catch is, startup Karma can’t be forced. You can’t ask for it. It just happens.

The reality is few people really want to work for a faceless corporation or company – see my post “Running a start-up is like being punched in the face repeatedly… but working for a large company is like being waterboarded.”. In our hearts we want to feel free to choose the things we want work on. The things that motivate us. In a big process driven organisation you are often told exactly what to do. Your creativity and entrepreneurial spirit is gradually worn away.

We see the potential, the creative spirit in younger companies and sometimes we’re in a position to help them along the way. We believe in hope. ‘They just might beat the big guys..’ This little v’s big scenario is played out time and time again in business and in stories. Think:  Apple v’s IBM in the 80′s; Virgin Atlantic v’s British Airways; and Dyson v’s Hoover. Over and over again the cycle continues.

So why do we love and want to help the underdog so much..?

  1. Passion – It is easy to become enthused by the passion and determination of the underdog. They believe, have faith and are willing to sacrifice much.
  2. Control - Individuals, especially in the West don’t like the idea of being dominated by large companies or organisations. We have a long history of fighting for independence and freedom. Underdog’s help keep freedom.
  3. Making a difference – We all want to make a positive difference to the future. By helping the underdog we can influence the future. And we know helping the big companies will have little effect.
  4. Influence – By helping the underdog you can have much more say into how the product or service works.
  5. Innovation - The underdog is far more likely to innovate. They have no choice. A differentiated product/service has to be produced. This is good for everyone, especially those that have helped them on the way.

Of course, every dog eventually has its day. When a successful underdog inevitably becomes the dominant player the tables are turned and the whole cycle of little startup v’s big company then starts over again. It’s the great virtuous circle of our evolutionary economic system.

Me, I love being the underdog! It gives you something to fight for.

Innovation sucks!!

June 17, 2010

Innovation is extremely alluring to companies and startups. It offers so much potential. However innovation  takes mountains of time. You just can’t come up with a Facebook, Dyson or Ford in 5 minutes!! It’s simply not a light bulb moment. It can take 1000′s of  attempts. “I have not failed. I’ve just found 1000 ways that won’t work”Thomas A Edison. Innovation is a gradual internal company and external market process.  This makes innovation very frustrating for the entrepreneur because the one thing they have in short supply is time! Innovation is awesome but it also sucks!!

Innovation has to build-up momentum and be developed over several or many iterations. This evolution of ideas can be within the same team, company or marketplace. It can even be ideas shared between different markets or countries. That’s the great thing about our modern economy, its survival of the fittest ideas. The key to unlock innovation is for the idea to be at the right time and in the right place.

I’m sorry, but time and time again I hear startups saving we are the next Facebook, Twitter, etc. In reality you need to know where are you in the innovation cycle – that ranges from innovation to commoditisation. Geoff Moore ‘Crossing the chasm’ is always a good book to read on this subject. The position in this innovation cycle dictates your actions, growth and timescales.

The challenge with innovation is that it takes eduction, thus the need for time. The educating of potential customers is difficult because people don’t really like change and risk. Companies, especially big ones, definitely don’t like change and risk. Education costs an awful lot of money whether with mass market consumer items or niche corporate b2b products. The marketing message needs repeating over and over and over again. First mover advantage is great but second mover can be better. Just look at Google (2nd to market) and Yahoo (1st to market) and who came of on top.

The trick is to get into a market niche on an upward curve, get running with the pack (competition) and then gradually innovate. As always it is easier to say than do!! Apple is a great example. The success they enjoy today with the iPhone popularity goes way back to 1993 with the failure of the Apple Newton. Apples’ iTunes which is intrinsically linked to the iPod and therefore the iPhone originally benefited from the downfall of Napster. These innovations have been brewing for many years and between many competitors.

The great thing about innovation is that it has unlimited possibilities. It’s brings the combination of creativity and exciting growth potential. Innovation is awesome but it takes time, money, careful listening to the market and mountains of persistence. One hit innovation wonders are rare and not the norm. All of this can be frustrating for startups because no one is in a rush except the startup and the one things startups are most short of is time.

Startup Opportunity Identification 2.0

February 18, 2010

The difficulty with customers is that they don’t really know what they want until they see it! This creates a nightmare for any startup or corporation trying to build a new product – What do you make that people really want and are willing to pay for?

To find the answer startups have to commit to an idea and  move quickly, and cheaply  through to a Minimal Viable Product .  You are looking for a ‘must have” product. This  requires continual iteration around customer needs. The ultimate test is  getting customers to profitably pay for your solution i.e. a higher lifetime value of a customer to the cost of customer acquisition.

We’ve had three product ideas in our startup before we found the one we’re working on now. Creating a new startup product moves through three successive stages starting with ideas development and finishing in a successful product/market fit.  Currently our startup is trying to get to product/market fit.

Last  week I gave talks to MSc and  MBA Entrepreneurship students on identifying entrepreneurial opportunities (above deck) based on these three stages:

  1. Ideas development – We spent a  very long  time researching and looking for the killer idea. We were trying to find the perfect opportunitya gap in the market between existing suppliers in a new growth market. We went round and round in circles looking for the perfect opportunity. In the end we ditched our first real idea because the customer ROI was weak in the economic downturn. We then,  much more rapidly, came up with lots of new  ideas and committed to one – external website monitoring. Unfortunately research takes time and as a startup without revenues you don’t have time. You have to commit to an idea even if it’s not perfect -  NOTE: there will always be competition!
  2. Product development & release – Without perfect knowledge on customer needs and competition you have to make many product  assumptions. Right from the  start  we were testing our assumptions with potential customers at network events, in meetings, online and during our Alpha/Beta. It’s not easy to get real answers without a shiny product to sell.  A prototype helps. You have  to rely on your gut instinct. During  this feedback we switched our app from internal systems monitoring to external web monitoring. We found potential customers more receptive to this offering. This early engagement process also helped us to develop our sales messages, sales funnel and  go-to market strategies.
  3. Market/product fit -  If you’ve made it this far the really hard work starts.  You’re now looking to make your product a ‘must have’. The challenge is its very hard to be heard by potential customers. You’ need to get the product in their hands! Only then can they make a true judgment on its value. They’ll also compare your product to  substitutes and alternatives in the market. You therefore need to differentiate and deliver a much better product to get them to change! The sales message and product needs constant refining until you have a measured product/market fit. Only the can you pull the sales trigger.

As startup founders we think we know what customers want and the problem they want solving the most. Unfortunately we’re probably wrong. We then  waste huge amounts of time building a product around that  perceived need. It’s hard for many founders to admit their ideas, product and dreams are incorrect. The ideas which formed the startup were based upon a assumptions.

You have to know when to quit an idea, re-form it or find a new idea as assumptions are tested.  Flickr (started as on-line games), Youtube (Hot or Not) and Blogger (project management) are all great examples of product ideas which iterated to a different final product. As startups we don’t have the comfort of time and must move rapidly through an idea, production and iteration. Unfortunately non of this guarantees success but it sure helps!

3 great entrepreneurial talks to watch

February 11, 2010

They are not new but they are all a must watch if you’ve not seen them before: Steve Jobs has an amazing life story to tell which he delivers incredibly well; Guy Kawasaki brings a side-splitting comedy performance, but also insightful message, with his “The Art of the Start” talk; and Richard Branson is very cool on TED.

Valuing an MBA in a startup

February 3, 2010

Over the last week there’s been alot of talk questioning the value of having an MBA in a startup – Giff Constable, Rob Chogo, Jon Steinberg, and Charlie O’Donnell (All stateside and non of whom I know). I’ve an MBA in entrepreneurship, 20 years tech business development experience and now a startup. In my experience an MBA does not teach anything you don’t  already know or can work out for yourself. However it does say something about you as a person. Unfortunately this counts for squat in a startup.   As in sales and in a startup you are only as good as your last months or quarters sales.

“Reach for the sky!”

Why do an MBA?

From my experience meeting other MBA’s Jon Steinberg summarizes  really well why people undertake the MBA:

  1. Value in building a network
  2. Credential – certain employers require an MBA for certain jobs
  3. Need a break from work
  4. Career change

For me it was about adversity, learning and change. Adversity has been shown to be the number one  driving force for successful entrepreneurs. I don’t have a first degree and dropped out of  college. I’d been stuck on an educational ledge ever since. Some of my close family and friends strongly advised me against doing the MBA, particularly in entrepreneurship. Yet it was one of the best years of my life. I loved every MBA minute!

Experience v’s an MBA

During my tech career I’ve built significant profitable customer bases three times from scratch. It ‘s been an amazing experience with great highs and the occasional low.  In my last employment I grew a remote managed services business unit  into a highly profitable multimillion dollar Global business winning customers like Richard Branson’s V2 Records. Building customer bases from nothing is not easy. I’ve found building a company even harder.

There is much an MBA does not teach you. It does not show you the many practical skills needed in business. In particular skills like sales, marketing a small business, attracting resources – the list goes on..  There are  so many skills needed  to run a startup.  Given the choice real small business experience wins hands down over an MBA in a startup. However sometimes we forget that an MBA is an academic qualification. I’ve found that my MBA  has brought value to our startup.

We like difficult challenging times

Some of us perversely put ourselves into difficult and challenging positions where the odds are not good. It’s often not a comfortable place to be. However we keep going back there! The MBA is deliberately tough. It was challenging for me not having the educational experience and understanding from a first degree. The first semester was the hardest. Its like a bootcamp. They give you too much work. It was an especially hard as my mother was diagnosed and died of cancer during the first semester – all part of life and doing an MBA!

Does an MBA bring value to a startup?

After so many years at the practical coal face of business development the MBA has definitely helped me see things differently. I now look at decisions more objectively. It has brought a greater understanding of internal business structures and holistic competitive markets. Was it worth the $10,000′s of dollars it cost? Plus all the living costs and lost savings -  probably not. Would I make that decision again to do it – defiantly!

An old serial entrepreneur friend of my said that ‘a startup is an MBA of life.’ And he is so right. Nothing can prepare you for a startup. It is unlike anything I have ever done. It messes with your mind and body. We all know you didn’t need an MBA to start as business. So why do it? For me is it’s about exciting new adventures where you push yourself to the limit and learn new tricks. This could be doing an MBA, starting a new challenging job or having a startup. Keep learning and pushing your own boundaries. Life is boring otherwise. And why have a boring life! You only have one of them ;)

Yeah I know I’ve got an MBA, so I’m bound to be a bit bias. However on balance I highly recommend an MBA for those that have something to prove and love challenges. If your heading to startup ville and not moving up the career ladder in the same company an MBA will probably set you back. It will cost you lots of money and if your doing it to change career will put you back years. But these are  good things. They keep you fresh and hungry. It’s the learning and personal growth that really matters.

Life, death & startups..

January 7, 2010

How many times have you heard the saying life is Too short. Thing is, there is much truth in this. Jeffery Walker’s recent untimely death from cancer and seeing the movie The Curious Case of Benjamin Button got me really thinking about life and death. It’s also got me thinking where startups fit into life’s equation. Life’s challenge is we only have a short time to work out what we really want from it. In many ways having a startup or fulfilling your dreams brings  self understanding, personal growth and even enlightenment.


The final words in life (Blade Runner, 1982)

Entrepreneurial stories and the movies are a great reflections of life. The alter ego fictional Fight Club character Tyler Durden said “This is your life, and it’s ending one minute at a time.” Reflective life films and the death of someone you know creates self-reflective questions.  Are you happy living the life you live or would you rather being doing something else. Would you rather have a different job? Or desire a startup company?

“First, you have to know, not fear, know that someday you are going to die. Until you know that, you have no sense of urgency. You think you have all the time in the world to do amazing things, but you may not live to see that particular someday.” Another Tyler Durden quote

In Steve Jobs wonderful speech after surviving cancer “Your time is limited, so don’t waste it living someone else’s life”. Steve went onto repeat Breaker Morant quote, which he’s lived by since the age of 17,  “Live every day as if it were your last and then some day you’ll be right.”

I’ve found in life that when you’re doing  something new and challenging in an intense short space of time period, time  seem to slow down. Learning and keeping your experiences new and fresh is so important in life.  It brings a life full of rich and varied experiences. Paul Graham says that working in startups “seem like time slows down”. It’s because there is such an incredible amount to learn in a young company. Paul goes onto say in his great 2006 essay post The Hardest Lessons for Startups to Learn:

“..there’s nothing particularly grand about making money. That’s not what makes startups worth the trouble. What’s important about startups is the speed. By compressing the dull but necessary task of making a living into the smallest possible time, you show respect for life, and there is something grand about that.

The character Benjamin Button said “When it comes to the end you have to let it all go.” Why wait until the end when it’s too late.. We can all choose what we do with our lives, no matter what our age is. “Every passing moment is a chance to turn it all around.” Look forward and don’t dwell in the past or you will just stay there lost. We can choose to hold onto negative emotions such as fear, doubt and anger or let them go and fulfill your dreams doing something you really enjoy.

I regard making money as a boring errand to be got out of the way as soon as possible. There is nothing grand or heroic about starting a startup per se.

The challenge in life is that  we only have a short time to work out what we really want from it. Some would call the discovery of a life’s purpose or understanding as enlightenment. Wikipedia defines ‘Enlightenment broadly as wisdom or understanding enabling clarity of perception‘, ‘full comprehension of a situation’ and ‘a state of freedom from suffering, desire and ignorance’. In many ways having challenging experiences and doing something you love brings deeper self understanding and personal enlightenment.

Are the best startup founders young or old?

November 23, 2009

I recently heard a University lecturer say “entrepreneurship is a young mans game”. Investors do prefer younger founders.  The well-respected startup investor Yossi Vardi: “I generally invests in young entrepreneurs”. The average Y-combinator or Seedcamp winner tends to be in their 20′s.  However there is no best age to be an entrepreneur.  There are benefits and draw-backs to both young and older founders. Being  a successful entrepreneur is derived from the ability to  learn, having  an inner driver and maintaining the right attitude.

Our web app startup operates from a student/post grad startup incubator. I see alot of young startup entrepreneurs coming through. Most startup founders at the incubator are either young or middle-aged.  A recent US report showed that the average age of startup founders is 39! There are benefits and draw backs to both young and old founders:

  1. Energy – Youth brings an abundance of energy. Startups require alot of energy. You have to work hard, often and late. However startups are more of a marathon than a sprint. They  require long-term mental and physical stamina to succeed.
  2. Enthusiasm – The danger with enthusiasm is it does not always last  in the young and inexperienced. Startup projects can be dropped as enthusiasm wanes and reality kicks-in. It is important to be committed on a path whether young or older.
  3. Experience -  A younger entrepreneur is often eager to learn and has fresh ideas untainted by working as an employee. Whereas an older founder often has great industry knowledge. Research shows that companies are more likely to survive if the entrepreneur is older, and has previous business experience.
  4. Money – Older startup founders tend to have more capital to invest than younger entrepreneurs. However older founders outgoing’s tend to be much higher with kids, houses, etc..
  5. Risk – Younger entrepreneurs are often less risk averse than older founders because they haven’t got so much on the line i.e. outgoings and responsibilities.
  6. Time – Without responsibilities a young founder can focus just one  thing – working hard on the startup. Sequoia Venture’s Michael Moritz.:  “distractions like families and children…that get in the way of business” . They also have time to make mistakes that can be learnt from and then try again.
  7. Innocents – The young tend to be more naive on how hard startups can be. Whereas the older tend to be more worldly-wise.

VC’s prefer more youthful startup founders because they have  fresh ideas and can more easily be managed. The best founders are probably older serial entrepreneurs with both startup know-how and market experience.  However they can suffer from destructive excessive egos at times.

There is no best age to start a company. Age plays both ways. It can be a strength or a weakness in either age group. Attitude and an inner driver, with a sprinkling of luck, is more crucial than age. An entrepreneur is  made by building upon an individuals fundamental personal qualities, including determination, and not age.

Entrepreneurs: Beating the employee out of you

October 14, 2009

Being a startup founder is poles apart from being an employee. During my 20 year employment career I’ve worked for small tech companies and large software manufacturers. I’ve now had a web app startup for the last two years. Like many I’ve been taught by successive employers how to behave as an employee. My attitude has had to change with our startup because uncertainty abounds and as founder’s we’re responsible for everything.

FightClub self beating

Edward Norton beating himself out of employment
in the movie FlightClub.

Last year I met Ben Way who started running companies at 15! Ben’s now the grand age of 29. I spoke to Ben about his startup life and he said ” I’ve always known it this way and don’t know it any differently.” Having a startup, particularly one where you are trying to build a product, requires a very different approach from being an employee. You have to change your outlook and the way you manage your time:

  1. Job security - There is none!  Remember what it was like when one of your past jobs was in jeopardy and uncertain abounded. That is what it is like everyday in a startup, get used to it.
  2. Salary – In a startup, particularly if you are building a product, there is no money posted into your bank account every month. Get used to living frugally.
  3. Structure – You don’t have the hierarchy of a company to rely on. You have to do everything. From setting strategic direction to putting out the trash (rubbish)
  4. Discipline – There is nobody telling you what to do. This sounds great, however it does mean you have to be totally self disciplined.
  5. Direction - Too much freedom can be a bad thing. You can become paralyzed by uncertainty. You must maintain a focus on where you are going.
  6. Massive Overload - There is too much to do in a startup. Much more than any other job I’ve ever had. And I’ve worked for small 10 person companies before. You have to prioritize.
  7. Tough decisions - You continually have to make difficult decisions which have significant downstream effects. If you’re a procrastinator stop it and make decisions. Afterall a decision is better than no decision at all.

Many employees dream of having their own company. The reality is that it’s whole new world. In a startup the highs are higher and the lows are lower. It much more of an emotional roller coaster of a ride than being an employee.  The challenge of building a company is extremely exciting. And the ability to create in a startup is immensely rewarding. However the workload, responsiblity and uncertainty can sometimes make the whole process  seem overwhelming. There certainly is never a dull moment in the life of a startup.

What the heck is startup brand identity?

September 17, 2009

We’ve been thinking about startup branding for a while. I recently touched on branding when I posted ‘Do startups really need branding straplines?’ and concluded that top level marketing straplines embody the vision of the startup. This brings clarity of purpose, consistency of understanding and direction. It seems to me that ‘brand identity‘ is a vague and fluffy term.  However branding is not just for the big boys. It’s also great for startups. Brand identity helps brings credibility to a startups customer, investor and partner relationships.

Print

It’s the Real Thing

Startup branding certainly isn’t anything like coca-cola with their big budget corporate brand personality. However  both big company and startup branding is about personality. Branding is very, very, very important for the big companies. It’s worth an awful lot to these giants. It is also really important for tiny little startups like our new web monitoring service. Branding sends out a consistent recurring and reliable message of what the company and product stands for. Customers love consistency. They want to know what they are going to get and they will be satisfied. This builds brand and product/service trust.

In a startup brand personality means the founder’s personalities. Like it or not its about  the founders character’s!  The startup is a reflection  the founders values, beliefs and the way they behave. Startups have the ability to be much more human and friendly than the big faceless corporations. This means startups can use their founders personalities to their advantage. They can be so much more human, personal and engaging.  This is particularly effective in the new world of social media. However startup founders need to have a clear message on what they stand for and who is their the target audience. The founders also have to live and breath the brand for it to be real.

Mindtouch Aaron tattooMy friend Aaron Fulkerson, the CEO of MindTouch, has taken branding
to the extreme by tattooing the company logo on his leg!!

Most business relationships, whether B2B or B2C, are based upon trust. Potential customers need to know that a supplier will deliver on their promises and they will be around in the future. The challenge for startups is  that branding and trust takes time to build up.  If the founder chops and changes  messages or brand personality too much this trust will not buildup. It takes patience and persistence on a single course to buildup branding identity. This is what makes it so valuable for both the big companies and startups alike.

The source of entrepreneurial determination

August 12, 2009

My MBA in Entrepreneurship didn’t refer much to  the importance of determination. Yet I believe that being determined is a key quality for entrepreneurs. Since I’ve been immersed in the real world of startups I found this idea to be very true.

Rachel Elnaugh calls it the “pit” which you have climb out and Seth Godin named it the “dip” that you must see beyond. Paul Graham says its “The most important quality in a startup founder. Not intelligence– determination.” (point 5). But what does it mean to be determined?

terminator_fireThe Terminator movie

The Terminator machine has absolute determination to achieve its single objective. Entrepreneurs derive their determination from:

  1. Focus – There is alot of talk in business schools about vision and strategy.  A vision brings something to aim for. Laurence Peter said “If you don’t know where you are going, you will probably end up somewhere else.” With so much to do in a startup it can be overwhelming. Time can easily to burnt on doing things that don’t really matter.  Determination brings the focus needed to work on the things that do matter.
  2. Belief – Because startups have limited resources they have to believe in their vision.  The founders have to be determined  to energise  enough new resources to reach their goal. Mahatma Gandhi,  “If I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning.” If  founders don’t believe in what they are doing no one else will and others aren’t going to help.
  3. Committed - There’s is no getting away from it. Startups are hard work . The entrepreneur has to  fully commit and be determined to make the startup work. Peter Drucker said “Unless commitment is made, there are only promises and hopes; but no plans.”  The entrepreneur has to sacrifice other parts of their life’s to make it work.
  4. Consistency – Most business is based upon trust. Potential customers need to know that a supplier will deliver on their promises and they will be around in the future. The trouble is trust takes time to build up.  If the entrepreneur chops and changes too much this trust will not buildup. Patience and persistence on a single course is necessary. Build momentum through each successive achievement towards the startups overarching goal.
  5. Think skinned – Entrepreneurs are well known for their determination and tenacity. They have to be thick skinned to survive the startup emotional roller coaster. Everyone will give advice and “hundreds of people will tell you your idea is rubbish” says Richard Reed the co-founder of Innocent Drinks. They may even think the entrepreneur is insane. The entrepreneur has to be determined to press ahead if they believe in an idea.
  6. Flexible -  There is no point in flogging a dead startup idea! Once a new venture is started it can be difficult to see the difference between a set back or an idea that will never fly. Seth Godin believes that successful entrepreneurs know the difference between a dead-end and  natural dips. A startup vision and plan needs to be broad enough to accept change.
  7. Lucky – Entrepreneurs need to be lucky people. However, as  Ernest Hemingway said, “You make your own luck”. If the entrepreneur is  determined and locates themselves often enough in the right place where things can happen, they eventually will.

James Dyson is a classic case of determination. In 1983 his new idea was rejected by all the major house hold vacuum cleaner manufactures. He had the focus,  belief and commitment to manufacturer the new idea himself in 1993. During 2005 Dyson took a massive a 20.7% US marketshare compared to Hoover’s 15.6%.

Determination keeps us going when we loose all hope. Its when everyone and everything seems to be going against us. Determination is the spirit of innovation, entrepreneurship and being human. As Thomas A. Edison said “I have not failed. I’ve just found 10,000 ways that won’t work.”


Follow

Get every new post delivered to your Inbox.