Justin Timberlake and Andrew Garfield via Wikipedia
Most startups dream of attracting a celebrity endorsement, and assume that it will take their startup to the stars. Startups such as Chirpify have managed to flourish and raise millions with endorsements from folks like Lil Wayne and Snoop Lion. Others go the way of 12Society, an LA subscription commerce startup with six celebrity sponsors, but still couldn’t get any traction.
Startups using celebrities is such a hot topic these days that Gary Vaynerchuck, noted author and entrepreneur, has coined a new term “star-ups” for the phenomenon. New books are popping up on the subject of how and when to seek celebrity endorsements, including “Will Work for Shoes,” a popular one by Susan J. Ashbrook, who has courted celebrities for twenty years. Read more
The answer is no, yes, and it’s irrelevant.
Back in the days of the dinosaurs, my first software company was in the wireless communications space (when that meant “pagers”, not “smartphones”), and our product let you type a message on your computer and send it to a pager, using a very simple protocol known as “TAP”. We were—by far—the market leader in the industry (providing the software for Motorola, Nextel, Apple, Sprint, etc.) despite having lots of competitors. When people would ask a similar question back then about the difficulty of software development, my usual response was “anyone can write a TAP program over a weekend that will work with 80% of the paging systems in the world…but getting it to work on the other 20% will take you a year.”
With that in mind… Read more
There are two separate and distinct sets of things that you need to look at when evaluating an offer.
The first, and most important, has to do with who the investment is from. It is impossible to over-emphasize the value of “smart money” and “good money” over “dumb money” and “evil money”. You should do at least as much diligence on your potential investor as they are doing on you. You should check references (speak with as many of their portfolio CEOs as you can, cold-calling them preferably), read everything written about them, and that they have written. Have long talks with them about what they are looking for in the relationship, what your respective ideas are when it comes to exits and long-term management of enterprise, and how much dry powder they are keeping for future follow-on investments. Above all, look for unimpeachable integrity and strong personal chemistry, so that you will both feel comfortable when there are tough decisions to be made. Read more
Every startup founder I know talks about the chaos of their business, which they usually attribute to that burst of growth that is required to get to positive cash flow. They envision a stable environment after that point, and may have convinced themselves that they will be safer and happier with a livable income, maintaining a loyal but flat customer base.
Sadly, this false perception often leads to the death of their business, or at least the end of their tenure as CEO. I “second the message” that chaos never subsides, from a couple of successful entrepreneurs, Clate Mask and Scott Martineau, in their book “Conquer the Chaos.” Your only choice is to live with it, and find a way to conquer it. Read more
While anything is technically possible, the reality is that venture capital firms do not fund “ideas”. There are many wonderful ideas, and even many people having the same idea in the market at any given time. So what VCs fund is execution. Indeed, VCs only invest in one out of every 400 fully-formed companies that approach them for funding…let alone someone with a “startup idea”. Read more
How will you make money (and no, advertising is not the answer)?
Who, specifically, is your first customer? Second? Third?
What is your contingency plan for when this seed round is exhausted, and you are unable to raise any more?
What is your API/platform/partnership strategy?
How are you going to sell the company, and to whom, within six years?
You are an aspiring entrepreneur, eager to dump the corporate grind, and work to the beat of your own drummer, but you can’t come up with that killer idea to save the world. What are the alternatives that will give you the independence you crave, and challenge your business acumen?
Technically, I believe an entrepreneur is anyone who manages his own profit and loss, and doesn’t meet the government tax definition of an employee. Beyond the traditional new product or service model, you can always buy an existing business, purchase a franchise, join a multi-level marketing (MLM) company, or simply go out on your own as a consultant. Read more