Archive for the 'Bootstrapping' Category

Is your startup too old to fail?

I review several hundred startup business plans a year.  Many ventures have been fighting and struggling for years.

I especially see that here in Dallas where the pressure and the cost of living is much lower than the West Coast.  It’s easier to drift in a zone where your business is making progress but slowly.  You’re trying to survive and so may have other work.  Your venture gets just a slice of your mindshare.  You learn to survive without funding and bootstrap.

Compare that to Silicon Valley where entrepreneurs are more apt to deem their effort a failure.  They move on if they haven’t had huge traction and funding in 1-2 years.

What is your goal?  Is it a true hypergrowth startup,  a linear growth venture, a small business that will provide employment for you, or a lifestyle (hobby) activity?  If your choice is the first, are you truly focused on that?  Are you committing 100% of your time and effort to your startup?  Managing your startup is not about velocity.  It should be about acceleration.

Startups stand for change.  That includes your own business.  As the saying goes, you have to know when to hold ’em and when to fold ’em.   While it’s critical to engage your passion and invest yourself, don’t drown to the point that you’ve drunk the Kool-Aid and will never leave.  Listen to the universe and the cards you’re dealt. Sometimes you have to exchange a few cards and pivot.  Other times you need to deal yourself a whole new hand.

Most successful entrepreneurs have had to brave a few failures before they find the right combination of concept, timing, team, and, yes, luck. If you never let yourself fail, you will never get that shot at the big win.

While the entrepreneur’s determination and persistence are to be admired, they also can be your enemy, as Jason Calacanis writes in Moderate Success Is the Enemy of Breakout Success.

Your innovation is In The Air

Malcolm Gladwell says innovation is always In the Air. It’s a smart takeaway from his interview with Nathan Myhrvold and the work of his Intellectual Ventures company.

Innovation evolves rather than is invented.  It’s the natural result of the science, culture, and technology that has preceded it.  If you think your business concept is truly unique,  you’re in the wrong business and need to work on that 10,000 hours.  It’s been considered, if not at a minimum conceived, by many others.

Sorry, Thomas Edison, invention is NOT 5% inspiration and 95% perspiration.  It’s more like .01% and 99.9%.  As any good investor knows, it’s all about execution. So entrepreneurs, keep your NDAs, stop whining, and start building!

 

Are you cut out to be an entrepreneur?

Vince writes:

I’ve got a few ideas for an internet startup but a few VCs I’ve talked to basically laughed when I mentioned I wanted seed capital to start a business at my age.  One other person told me being over 45 was a negative indicator for eventual success. The closer to 60 you are forget it.  If you are young < 30 you have a  much
better chance.

So …here I am wondering what opportunity will come along for me (and many other software developers that I could help employ), or should I keep swimming out to meet yet another opportunity hoping I don’t drown in shark infested waters as my idea goes elsewhere and I’m left without a life raft (humor) after I submit an idea.

Vince,

Entrepreneurs can be any age. Don’t believe the myth that young people make the best founders.    Adeo Ressi combats ageism in Is There A Peak Age for Entrepreneurship?  I know a few Dallas entrepreneurs who are in their 60s. So don’t be discouraged because …

Investors are lemmings.   Some do follow what’s hot and want the hip 20 something.  Really, as a founder, why would you chase such shallow money? Many investors, like BAE, evaluate companies irrespective of age. Founder and team experience are a big plus.  We see past the hype of concept ventures that are hot air.  But if you’re concerned about this …

Accept God.  Our God. You must accept the Church of Infinite Rejection as your true savior.  You WILL be turned down and receive grief  for thousands of  reasons on a daily basis from everyone in your life – loved ones, investors, partners, staff, volunteers, service providers.  But frankly this is jumping the gun because at this point …

You are not  an entrepreneur.  Everyone has ideas.  It’s the execution that counts.  You have barely started.  Being an entrepreneur is a long, hard, painful path.  If you truly believe in your mission, you do it because you’re driven.  It’s in your DNA.  You invest the time.  You find solutions.  You adapt.

Now there are incubators that will provide seed funding on concept.  But enrollment is very competitive.  Assuming it’s not a fit or you can’t get in …

You survive.  You don’t pay yourself or your partners or team members.  If you have hard costs, seed capital comes from your savings, credit cards, other personal assets and debts, family, friends, and crowdsourcing.

If you’re just at the idea stage, you have far to go to be ready for an accelerator like BAE, angels, or VCs.  You’ve got to refine your business model, find customer pain, acquire partners, demonstrate market need and demand, create value, start a prototype, build your business plan, and show your sweat investment.  Try my BlueEntrepreneurs.com Resource Guide for helpful links.

Now young kids often are more successful at getting to this point because they have no obligations.  It’s easier for them to make the sacrifice and survive while they build the business.  They don’t have to have a full-time job, support others, or make house, car, or insurance payments.  They can live at home with mom and dad or with other starving entrepreneurs.

Vince, if you truly believe, just do it.  Anyone can at any age.

Good luck!

Marc

Are you dying? An entrepreneur’s life.

I get approached all the time by entrepreneur wannabe’s.  My first question – where is the blood?  Because you aren’t trying if you aren’t dying.

  • Dying because there are millions of decisions that you have to find, decide, implement, and learn from to grok your market, design specifications, and develop the minute details of the product that bears your name.
  • Dying amid insistent calls from your creditors, friends, and family as you squeeze money and time like water from a rock to enable you to survive yet another day.
  • Dying in spite of the continual volley of arrows in your face and your back of rejections as you promote your genius to anything with a heartbeat that crosses your path.

There is no reward without risk.  Real risk.  The kind that takes everything you have.  And then more.  That spills your blood from both a million cuts and a dozen gaping wounds.  That feels like dying.  And you gotta love that pain.  Either you’re in or you’re out. Which is it?

If you’re in, unless you’re already a well known serial entrepreneur, be prepared to Bootstrap. Entrepreneur Vivek Wadha lights your path while you’re slowly dying in Ditch the Biz Plan, Buy a Lottery Ticket.

His top tips:

  • Share your ideas with those who have done it before.
  • Find a way to connect with your market.
  • Start small.
  • Focus on revenue and profitability from the start.
  • Remember the importance of cash flow.
  • Think outside the box.
  • Learn to sell.
  • Prepare for the worst.
  • Never forget the importance of ethics and integrity.

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