Startup Professionals Musings

MARCH 6, 2011

Starting a business is a lot like starting a marriage. At first, all parties are in dreamland, with a vision of changing the world, having lots of fun, and raking in the profits. But all too soon, reality sets in. Product development is stuck at that 90% mark, a key person leaves, and customers are talking but not buying. In his book Reality Check , Guy Kawasaki summarizes some of the key issues.

Startup 245

Startup Software Developers Software Development Business Model 245

Startup Professionals Musings

JULY 6, 2011

“Scope creep” (or feature creep) is an insidious disease that kills more good startups than any other, especially high-tech ones, and yet most founders (who may be the cause) never even see it happening. This term refers to the penchant to add just one more feature to the product or service before first delivery, just because you can. The instigators are all well-intentioned – executives talk to potential customers who “must have” a few more things; or the technical team edicts some “technically

Technical Review 241

Technical Review Startup Software Review Database 241

Startup Professionals Musings

MAY 5, 2011

Every startup faces a myriad of challenges that are well beyond the scope of any founder, so you need a few guiding lights to illuminate the road ahead. These should be carefully selected, with a proven track record, willing and available to help, and be completely trustworthy. Make sure they are willing to check their egos at the door. Let’s talk specifics.

Advisory Board 239

Advisory Board Technical Review Software Review Startup 239

Startup Professionals Musings

SEPTEMBER 11, 2011

With the tenth anniversary of 9/11 upon us, and the recent financial woes, there seems to be a growing population out there worried about all the people and companies watching to hurt them. Why is everyone so paranoid these days? My plea to entrepreneurs is to recognize it as an opportunity, and go the extra mile to make people’s life better rather than stoke the fires.

Technical Review 235

Technical Review Startup Social Network Software Review 235

Startup Professionals Musings

SEPTEMBER 19, 2011

I see more and more entrepreneurs who seem to have everything going for them – vision, motivation, passion, even a good business plan, product, and money, and yet they can’t close customers. Maybe it’s time to look harder at the mantra of a new breed of gurus and successful entrepreneurs, including Steve Blank and Eric Ries , called “nail it then scale it” (NISI).

Startup 286

Startup Angel Investor Technical Review Incubator 286

Startup Professionals Musings

NOVEMBER 14, 2011

Many budding entrepreneurs struggle mightily with that first step – out of their comfort zone and into the unknown. They keep asking people like me whether the time is right, and the truth is that there’s never an ideal time to start your own business. It’s like starting a personal relationship, if you wait for exactly the right time, you’ll never do it.

Software Review 273

Software Review Salary Global Cost 273

Startup Professionals Musings

DECEMBER 10, 2011

Mid-level or even top executives who “grew up” in large companies often look with envy at startups, and dream of how easy it must be running a small organization, where you can see the whole picture and it appears you have total control. In reality, very few executives or professional stars from large corporations thrive in the early-stage startup environment.

Startup 263

Startup Early Stage Technical Review .Net 263

Startup Professionals Musings

OCTOBER 28, 2011

Most of the entrepreneurs I know realize they have some bad habits, like maybe procrastination or not listening well, so they focus on dropping these. New studies indicate that a more productive approach would be adopting new good habits and behaviors that clearly move your business forward, like good time management and implementing customer recommendations.

Entrepreneur 262

Entrepreneur Programming Partner Design 262

Startup Professionals Musings

SEPTEMBER 22, 2011

There is so much written these days about how to attract investors that most entrepreneurs “assume” they need funding, and don’t even consider a plan for “bootstrapping,” or self-financing their startup. Yet, according to many sources , over 90 percent of all businesses are started and grown with no equity financing, and many others would have been better off without it.

Sweat Equity 255

Sweat Equity Technical Review Entrepreneur Bootstrapping 255

Startup Professionals Musings

NOVEMBER 24, 2011

Everyone can recognize a great manager a mile away, so why is it so hard to find one? We all remember a few that are “legends in their own mind”, but that doesn’t do it. In fact, the clue here is that the view in your mind is the only one that matters, rather than the other way around. Almost every one of us in business can remember that one special manager in their career who exemplifies the norm, who commanded our respect, and treated us like a friend, even in the toughest of personal or busin

Technical Review 254

Technical Review Leadership Employee Management 254

Startup Professionals Musings

FEBRUARY 24, 2011

Every startup lucky enough to get some traction gets to the point where they decide to hire some “regular employees” for sales, marketing, and administrative tasks. Then they are surprised to see productivity and creativity take a big dip. What they should be doing is hiring only “entrepreneurs,” meaning people who think and act as if this is their own business.

Hiring 250

Hiring Entrepreneur Startup Technical Review 250

Startup Professionals Musings

NOVEMBER 4, 2011

Every new startup I know dreams of being funded by an angel investor. Yet according to the latest data from Gust (formerly AngelSoft), only about 3 out of 100 companies who initiate the formal request process actually get funded. The Gust Deal Funnel from the last 12 months indicates is that 70% of the interested companies never make it past the initial screening process.

Intellectual Property 249

Intellectual Property Angel Investor Technical Review Elevator Pitch 249

Startup Professionals Musings

DECEMBER 20, 2011

Most entrepreneurs have learned that it’s almost always quicker and easier to get cash from someone you know, rather than angel investors or professional investors (VCs). In fact, most investors “require” that you already have some investment from friends and family before they will even step up to the plate. You see, investors invest in people, before they invest in ideas or products.

Early Stage 247

Early Stage Technical Review Elevator Pitch Due Diligence 247

Startup Professionals Musings

AUGUST 9, 2011

A while back I received a discouraging note from an entrepreneur with a patent and a medical software application who couldn’t find a dime of investment, and was grousing that seed funding just wasn’t available anymore. After exchanging a couple of notes, I concluded that she was more likely a victim of item #1 on my reject list below, rather than a drought on seed funding.

Software Review 246

Software Review Due Diligence Elevator Pitch Early Stage 246

Startup Professionals Musings

FEBRUARY 5, 2011

After struggling to create your business plan for months, every entrepreneur likes to think that their document is inspirational and will reach someone who is smart enough to see the brilliance of the idea, intuitive enough to recognize their business acumen, and enthusiastic enough to offer the money required to make it happen. Every serious investor, on the other hand, has a stack of these in their in-basket (email or real plastic) awaiting review, and is looking for the flaw or less-capable e

Business Plan 242

Business Plan Elevator Pitch Technical Review .Net 242

Startup Professionals Musings

AUGUST 25, 2011

Entrepreneurs always work hard to create an innovative product or service, but often count on standard seller marketing for sales. But the reality is that sellers are no longer in charge of the customer buying process. Recent reports suggest that 90% of today’s shoppers skip marketing pitches, to research online before they buy, and over 50% check user reviews before making a decision.

Customer 242

Customer Technical Review Business Model Revenue 242

Startup Professionals Musings

SEPTEMBER 13, 2011

Everyone in the business world has heard of the book by Geoffrey A. Moore titled “ Crossing the Chasm ” (1991), but most entrepreneurs have no idea how it relates to them. In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. Most investors and startup professionals expand this concept of focus to apply to key issues of every aspect of strategic and tactical planning in a startup.

Marketing 238

Marketing Entrepreneur Technical Review Dilution 238

Startup Professionals Musings

JULY 3, 2011

Angel investors and venture capitalists don’t invest in non-profits. The simple reason is that it’s impossible to make money for investors when the goal of the company is to not make money. Yet I still get this question on a regular basis, so I’ll try to outline the considerations in common-sense terms. A non-profit organization is generally defined as an organization that does not distribute its surplus funds to owners or shareholders, but instead uses them to help pursue its goals.

Angel Investor 238

Angel Investor Technical Review Exit Strategy Equity 238

Startup Professionals Musings

APRIL 29, 2011

The average length of a funding pitch to angel investors is ten minutes. Even if you have booked an hour with a VC, you should plan to talk only for the first fifteen minutes. The biggest complaint I hear from investors is that startup founders often talk way too long, and neglect to cover the most relevant points. Or they get sidetracked by a technical glitch due to poor preparation.

Technical Review 237

Technical Review Elevator Pitch Angel Investor Matching 237

Startup Professionals Musings

MARCH 23, 2011

Many entrepreneurs I know feel guilty about not quitting their day job when initiating their startup, worrying about not giving their all to an employer, juggling the multiple roles, or even a legal conflict of interest. I’ll try to offer some guidelines to address these issues, but I generally recommend you keep the day job until your new company is producing real revenue.

Founder 233

Founder Startup Cofounder Angel Investor 233

Startup Professionals Musings

MARCH 16, 2011

Money to build the business is the number one challenge for most startups. Don’t believe the urban myth that you can sketch your idea on a napkin, and professional investors will throw money at you. In reality, only 3 out of 100 companies who apply are successful with Angels, and the success rate with VCs is even lower. A large percentage of startups never apply to either.

Technical Review 233

Technical Review Bootstrapping Startup Venture Capital 233

Startup Professionals Musings

APRIL 20, 2011

The best survival guides tell you how to be proactive and avoid the probabilities of ending up in a worst case scenario. Of course you need to learn how to recognize a bad situation before it bites you, and you need to know all the secret ways to wiggle your way out, before you succumb. The challenges stem from the simple fact that every entrepreneur is starting something new, where things are predictably unpredictable.

Advisory Board 232

Advisory Board Startup Forecast Early Stage 232

Startup Professionals Musings

DECEMBER 23, 2011

Most people think that the Peter Principle (employee rises to his level of incompetence) only applies to large organizations. Let me assure you that it is also alive and well within startups. There I see founders and managers who are stalled transplants from large organizations, and technologists trying to run the business. Forty years ago, in a satiric book named “ The Peter Principle ”, Dr.

Non-Compete 231

Non-Compete Entrepreneur Management Founder 231

Startup Professionals Musings

JUNE 28, 2011

Presenting your startup vision as a founder to a potential investor, or presenting an idea as an employee to an executive, requires that you effectively communicate, or “translate”, the value proposition into terms that the receiver can fully understand and appreciate. If you fail, it’s your loss, not theirs, no matter what the reason. For example, if your investor has been a senior business leader, you need to transform your message so that it addresses the issues that senior business leaders h

Agile 230

Agile Startup Architecture Distribution 230

Startup Professionals Musings

JULY 31, 2011

Some aspiring entrepreneurs are so desperate for funding, or naïve, that they ignore the obvious signs of scams and rip-offs on the Internet, praying for a windfall. One would think that with all the sad stories and tools published over the past twenty years, this problem would be behind us. But people are still begging for more technology or laws, often to protect them from themselves.

Technical Review 228

Technical Review Internet Startup Email 228

Startup Professionals Musings

SEPTEMBER 6, 2011

A while back, when a startup founder mentioned to me that he wasn’t sure he had the personality to be an entrepreneur, I realized how important that insight was. My first thought is that if you are more annoyed than energized by expert advice, team suggestions, and customer input, then you should probably avoid this line of work. Actually, it’s more complicated than that, but that’s a good start.

Management 315

Management Startup Restful Entrepreneur 315

Startup Professionals Musings

MARCH 12, 2011

At some point in their life, hopefully everyone strives to be the best in their chosen profession. Most people think that being the best requires more intelligence, more training, and more experience. In reality, in business or even in sports, the evidence is conclusive that it is as much about how you think, as what you do. I saw this illustrated well recently in a sports excellence book called “ Training Camp: What the Best Do Better Than Everyone Else ”, by Jon Gordon.

Entrepreneur 306

Entrepreneur Business Plan Startup 306

Startup Professionals Musings

MARCH 1, 2011

Business success begins in the mind of the startup founder and his team. A winning startup is a team of entrepreneurs who build and run the business as an extension of who they are, rather than some extrapolation of the Google or Facebook model. It’s not so easy to fake the important attributes when the going gets rough. So before you risk it all by jumping into a startup, do a reality check on your own mind to see if you can find a majority of the following attributes, summarized from the book

Entrepreneur 304

Entrepreneur Business Model Startup Design 304

Startup Professionals Musings

MARCH 26, 2011

Every startup founder knows implicitly that startup success is a long hard road. Yet we always dream that we are the exception to the rule. So once in a while it’s good to look at some facts to temper our imagination. I was reading an article written by marketing guru Seth Godin a while back where he mentions that “it takes about six years of hard work to become an overnight success”.

Initial Public Offering 295

Initial Public Offering California .Net Business Plan 295

Startup Professionals Musings

MAY 13, 2011

People ask me if they really need ANY business plan, unless they are looking for an outside investor. In fact, a business plan is needed more by you than investors, as the blueprint for your company, team communication, and progress metrics. Things that make it investment-grade for outside investors will also benefit you, since you are the ultimate investor.

Business Plan 290

Business Plan Sweat Equity Exit Strategy Intellectual Property 290

Startup Professionals Musings

MAY 16, 2011

The Internet and social media have totally destroyed the meaning of the word “friend” and even changed it from a noun to a verb. On Twitter and MySpace, many young people follow hundreds of friends before age twenty, all without ever having said or heard a word from most of them. Top Facebook users proudly proclaim their “whale” status, with 5,000 friends or more.

Arizona 280

Arizona Social Network Internet Social Media 280

Startup Professionals Musings

MAY 22, 2011

Entrepreneurs often have formidable technical expertise, key to developing a new product or service, but a great naïveté in management skills. They run into difficulty when their business reaches the $1-2 million annual sales range, or their employee count exceeds 5-10. It’s here that entrepreneurs must shift their thinking from tactical and operational, to strategic and managerial.

Management 279

Management Entrepreneur Revenue Internet 279

Startup Professionals Musings

APRIL 26, 2011

I don’t have an MBA. I used to fear that this would put me at a disadvantage in starting my own company, but now I’m convinced that it may be the other way around. In some recent surveys, as many as two-thirds of entrepreneurs felt that their entrepreneurial spirit was more ingrained than learned, so a specific education level is at least irrelevant.

Entrepreneur 279

Entrepreneur Silicon Valley Cofounder Salary 279

Startup Professionals Musings

OCTOBER 7, 2011

Every entrepreneur needs to be honest about their strengths and weaknesses, and realistic about their reasons for choosing the startup route. For any entrepreneur, even the best business opportunities, if entered for the wrong reasons, will likely fail. Some of these reasons seem obvious, so forgive me for restating, but I still hear them too often.

Entrepreneur 277

Entrepreneur Employee Startup Partner 277

Startup Professionals Musings

JUNE 23, 2011

One of the most common complaints I hear from entrepreneurs is that they are overwhelmed by the workload and stress of starting their company. Then there are the additional challenges of balancing the demands of family and friends. Having too much on your plate can turn your dream into a nightmare. Some people will tell you to just get a bigger plate, meaning hire some help.

Entrepreneur 275

Entrepreneur Demand Hiring Product 275

Startup Professionals Musings

DECEMBER 13, 2011

First things first – your startup needs a name! This may seem a silly and frivolous task, but it may be the most important decision you make. The name of your business has a tremendous impact on how customers and investors view you, and in today’s small world, it’s a world-wide decision. Please don’t send me any more business plans with TBD or NewCo in the title position.

Naming 271

Naming Cofounder Algorithm .Net 271

Startup Professionals Musings

OCTOBER 21, 2011

To be successful as an entrepreneur, you don’t have to be a fabulous person, but it helps. Some people, and some entrepreneurs, have that something extra, like Simon Cowell is searching for on the X-Factor , that you can’t quite put your finger on. But the entrepreneurs that have “it” seem to be able to effortlessly get team members, investors, and customers to follow them anywhere.

Advisory Board 271

Advisory Board Entrepreneur Bandwidth Social Media 271