For Start-ups

Information from various sources regarding the start-up eco system

Great Article About The Good Reasons Why Some Entrepreneurs Were Able To Raise Money

Author: Jason L. Baptiste

I spent a few hours at Dogpatch Labs in NYC earlier this week to catch up with an old friend and also discuss the email space with a few members of the email mafia. I only brought my iPad and my friend, Joseph, wanted to see Flipboard in action. Of course it got the usual “oohs and ahhs!”. I ended the demo with a comment of: “Yeah, not sure on the revenue model, but it’s fine they raised 10 million dollars from Kleiner”. My friend was taken back and could not believe that an iPad app that just launched raised $10 million dollars. My answer: The co-founder sold TellMe to MSFT for $800 million and the other co-founder was an original engineer on the iPhone team. At that point pattern recognition kicked in, and hence the inspiration for this article was born. There are often fundraising announcements that bewilder entrepreneurs or even plant the seed that “Oh, they raised a ton of money just like that, holy shit, I can too!” Sadly, this is often not the case as there are a good list of reasons why they raised money. These reasons are beyond the usual Brilliant team in a huge market with a killer product. These reasons also apply primarily to the angel round to initial Series A round. If made public, the valuations may also be fairly high.

Read the rest of this post »

10 Strategic Risks Every Entrepreneur Should Take

by Martin Zwilling

1. Deliver an innovative solution to a painful customer problem
This can be high risk if your solution doesn’t work, or your price is more painful than the problem.
A bad risk is assuming that you because you like the solution, everyone will buy it, or that you can build an existing solution cheaper than anyone else.


2. Plan to replace your product with a better and cheaper one
Probably more companies fail by avoiding this strategic risk than any other.
If the current product is making money, it seems like a bad risk to obsolete it.

Yet, new technology can quickly blindside you, and market dynamics change, plus you need to broaden your opportunity.

Read the rest of this post »

37 Start-up Insights

Author: Dharmesh Shah

 37 "Signals" From 37 Signals

1) Great businesses have a point of view, not just a product or service.

2) Writing a plan makes you feel in control of things you don’t actually control.

3) You have the most information when you’re doing something, not before you've done it.

4) Stuff that was impossible just a few years ago is simple today.

5) Failure is not a prerequisite for success.http://bit.ly/37Insights">

Read the rest of this post »

Marc Andreessen's Stanford Lecture: A Panorama Of Venture Capital and Beyond 3 Criteria For Startup Success

Marc Andreessen, former serial entrepreneur now of VC firm Andreessen Horowitz, was a guest speaker at Stanford Business School earlier this month.

His lecture was full of insights into what it takes to start a successful business, the importance of product, and the current climate of venture capital and entrepreneurship.

One of the most interesting segments details Andreessen's three requirements for a successful startup:

1. Enormous market (either existing, or new)

2. A fundamental technological or economic change (the product must be "10 times" better/faster/cheaper than what's on the market now)

3. A kick-ass founding team (tech and sales "superstars" are most important)

Entrepreneurs: Four Issues To Figure Out How Much To Pay Yourself

Author: Karin Price Mueller

When you work for someone else, you earn a salary for the work you provide. Pretty simple.

Being your own boss is another matter entirely. You need to bring in money to run your personal affairs, but the business needs cash, too. Deciding how much income to take compared to what you should leave for the business is a quandary, indeed.

"It is imperative that the business owner know their income revenue cycle, payables and receivables. A critical issue to understand is cash flow, which is the lifeblood of any small business," says David Morganstern, a certified financial planner with CMC Advisers in Portland, Ore.

That includes paying yourself. Here are some tips to help you take the income you need while leaving your business with a decent operating budget.

1. There is no formula
As a business owner, taking a salary is not as simple as being satisfied with what's left in the till after expenses are paid. Having a fixed salary, while inviting, may not be realistic because the financial health of each business is different--and fluctuates from year to year.
Your first consideration should be not about the business, but about your own personal living needs. Determine how much you need to pay the mortgage, food bills and other expenses, and that's the amount you strive to meet. But of course, business profits aren't likely to be as stable as your personal money needs, so you have to be flexible.

Lifestyle overhead should remain low to avoid any undue stress on the business, says Curtis Smith, a certified financial planner with Interactive Capital Management in Sugar Land, Texas. Low personal expenses will leave more money available for the business to maintain operating capital--and hopefully a cash cushion--for the future.

Read the rest of this post »

The 4 Key Elements Of A Massively Scalable Start-up

Author: Sean Ellis

VC backed startups generally aspire to valuations in the hundreds of millions or even billions of dollars, but very few really consider all of the elements they’ll need to make it happen.

After analyzing several startups I’ve worked with that have reached or are approaching these valuations I’ve boiled it down to four interdependent commonalities that always seem to exist.

While they are easy to describe, they are of course very difficult to achieve. Still your best chance of achieving them is to know what they are.

Sean Ellis is founder and principal at 12in6 Inc., a firm that helps startups transition to high growth companies. This post was originally published at his blog, and it is re-published here with permission.

Read the rest of this post »

Business Plan Competitions Are A Huge Waste Of Time

 

Author: Steve Blank
 
Last week one of the schools I teach at invited me to judge a business plan contest. I suggested that they first might want to read my post on why business plans are a poor planning and execution tool for startups. They called back laughing and the invitation disappeared

At best I think business plan competitions are a waste of time. But until now I haven’t been able to articulate a framework of why or had a concrete suggestion of what to replace them with.

Read the rest of this post »

When Entrepreneurs Should Ignore Advice

Author: Audrey Watters

Entrepreneurs are oftentimes bombarded with advice - some of it useful and some of it destructive. It can be disconcerting to hear feedback from people that don't understand your project or your vision. And it can be frustrating to face rejection from potential investors, partners, or customers.

Of course, comments that "That'll never work" can also become the motivation for even more determination. So in that spirit, here is a list of the some of advice that, thankfully, other smart folks ignored.

  • "Children just aren't interested in Witches and Wizards anymore." - Anonymous publishing executive to J.K. Rowling, 1996.
  • "Who the hell wants to hear actors talk?" - H. M. Warner, co-founder of Warner Bros. 1927.
  • "There is no reason anyone would want a computer in their home." - Ken Olson, Founder of Digital Equipment Corp., 1977.
  • "We don't like their sound, and guitar music is on the way out." - Decca Records executives rejecting the Beatles, 1962.
  • "You better get secretarial work or get married." - Emmeline Snively, Director, Blue Book Modelling Modelling Agency, to Marilyn Monroe in 1944.
  • "The horse is here to stay but the automobile is only a novelty, a fad." - The President of the Michigan Savings Bank advising Henry Ford's lawyer not to invest in the Ford Motor Co., 1903.
  • "I would say that this does not belong to the art which I am in the habit of considering music." - Alexandre Oulibicheff, reviewing Beethoven's Fifth Symphony.
  • "I'm sorry, Mr. Kipling, but you just don't know how to use the English language." - The San Francisco Examiner, rejecting a submission by Rudyard Kipling in 1889.
  • "The Americans have need of the telephone, but we do not. We have plenty of messenger boys." - Sir William Preece, Chief Engineer, British Post Office, 1878.
  • "A cookie store is a bad idea. Besides, the market research reports say America likes crispy cookies, not soft and chewy cookies like you make." - Response to Debbi Fields' idea of starting Mrs. Fields' Cookies.
  • "The world potential market for copying machines is 5000 at most." - IBM, to the eventual founders of Xerox, saying the photocopier had no market large enough to justify production, 1959.
    • via readwriteweb.com

     

    How to Avoid Making PowerPoint Your Enemy: Tips for Your Pitch Deck

    Author: Chris Cameron
    The idea that PowerPoint is evil is not new. But on Monday, the New York Times rekindled discussions about the pitfalls of its use during presentations when it published a story on the U.S. military titled "We Have Met the Enemy and He Is PowerPoint."

    The article details both the complexity and the duration of the slides the military utilizes for its briefings, and contains the rather damning quotation from General McChrystal, leader of NATO forces in Afghanistan, who when shown a particularly convoluted graphic (see below) during one briefing said, "When we understand that slide we'll have won the war."

    Read the rest of this post »