Mike Michalowicz photo via Wikipedia
To be an entrepreneur, you have to be navigate lots of unknowns, and the path is fraught with risk. Once you are past a certain mental age, you know too many of the things that can go wrong, so you never start. Sort of like the old saying that if we didn’t have young men to fight our wars, we could achieve world peace in no time.
People who are young, or young at heart, don’t know all the negatives, or don’t worry about them. The result is that they achieve things that no one else ever thought possible. That’s the definition of a true entrepreneur. Many people, including Mike Michalowicz, in his highly irreverent book, “The Toilet Paper Entrepreneur,” have identified specific reasons for this: Read more
Social media can indeed be a good way to start the process of finding investors. The first thing to do is to use your immediate network to reach beyond it, and that’s where LinkedIn does a marvelous job. I just checked my statistics there, and it turns out that 14 million people can get a warm introduction to me through one or more people whom we both know. That’s a lot of people, and probably covers a good percentage of the active entrepreneurs currently seeking funding. What this means is that if you draw up a list of potential investors, the odds are very good that you will be able to find someone to introduce you them. Read more
True story: After this particular startup team pitched a couple dozen investors, many of the investors told them their strategy was too narrow and too focused. One comment: “there’s a huge potential market, and you’re boxed into a niche.”
Later, when I talked to the startup founder about it, she was disappointed. “The last time we pitched they all said we were trying to do too much,” she said. “They told us we shouldn’t talk about the big market, but identifiable, defensible niche instead.”
I see this a lot. It’s a bit of a “grass is greener” problem. Potential investors, trying to help, and with all the best intentions, make suggestions. And quite often it’s like focus groups, in which the conclusion is determined by the most vocal member. So different groups have conflicting recommendations. I’ve seen this on other issues, but the whole-market-vs-niche is the most common.
My preference is a so-called beachhead strategy, in which the startup focuses on a strategic niche first, but is already thinking about how to move from strength in the niche to other contiguous markets, growing the market as they go. I think validation is easier to get in a niche. And sales. And cash.
Done right, that’s the best of both worlds.
(Image: Jen Tik, Flickr cc)
Image via OhioBusinessCollege.edu
Many entrepreneurs actually refuse to do financial projections beyond the first year, insisting that no one can predict the future. They need to realize that investors ask for projections, not merely as predictions, but more as commitments from the founder and his team. If you are not willing to commit, don’t expect anyone to back you.
In reality, you need to set these projections as goals for your own use, to convince employees as well as investors that you have a business which is challenging, but achievable. Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition.
Using your data, here are the basic elements of the projection process, which are measurable by milestones, and can be tracked to show when a re-forecast is required: Read more
Absolutely…in a positive sense [doh!], in order to help proactively ensure that (a) not only white males become entrepreneurs in the first place, and (b) that as investors they are not inadvertently restricting their universe of potential investees.
That’s why in the past few months I have gone out of my way to participate in the Black Founders Ideas Are Worthless conference (http://www.blackfoundersconferen…), the Latinos In Social Media conference (http://conference.latism.org/), and the women-focused We Own It summit (http://www.weownitsummit.org/pre…).
*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *
Michael Hyatt on the Platform at Biola Universiy courtesy of now.biola.edu
The space for startups is more crowded than ever. First of all, it’s now international, so you have startups from every country in the world competing for your customer’s attention and their business. Then there is the Internet, delivered through every media, including your smart phone, where the volume of data spewing out is like a new Library of Congress every 15 minutes.
According to the most recent study by the Ewing Marion Kauffman Foundation, there were approximately 514,000 new businesses created per month in the US in 2012. The days when you could launch your business with a new web site, and the phone would begin to ring, are long gone. Even the Google search engine crawlers may take up to two weeks to find you.
So what’s an entrepreneur to do to get his new business noticed these days? According to many experts, including Michael Hyatt, in his book, “Platform: Get Noticed in a Noisy World,” you need to build the highest platform you can, to stand out and be heard above all the rest. Read more
It’s true, but…
Starting a company is NOT at all easy, and unfortunately there simply is no way toreally learn about it other than by doing it. No book, school, mentoring, or even apprenticeship can substitute for hands-on experience. When you consider that doctors spend a minimum of two years in pre-med, four years in med school, one year in internship, and two years in residency before you would consider putting yourself in their hands, think about how investors feel putting hundreds of thousands, or millions, of dollars into the hands of a startup team with no experience. Isn’t creating a viable company at LEAST as difficult as treating a patient? [Hint: Yes!] Read more