For Start-ups

Information from various sources regarding the start-up eco system

If You Haven't Failed, Then Maybe You Aren't A Real Entrepreneur

Author: Martin Zwilling

If you haven’t had a failure, you aren’t pushing the limits. If you are really an entrepreneur, you are a risk taker and less cautious by nature, so failures should be expected. Wear you startup failure as a badge of courage. Don’t go after failure, but embrace it when it does happen and grow from it.

People who are afraid of failing should not become entrepreneurs. They can't overcome the psychological fears of making a mistake, and are afraid of losing money. They are better off keeping their day job. Successful entrepreneurs, on the other hand, tap into the positive power of failure. Here are three examples:

  • Steve Jobs was fired by Apple Computers in 1985, the company he helped to create. He went on to acquire Pixar, made it a success, and then came back to reinvent Apple as a very successful consumer products business.

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When Is Your Start-up No Longer A Start-up?

Author: Seth Levine

A few days ago I received an email asking me if I had a “rule of thumb for determining when a start-up can no longer be considered a start-up”. The sender proposed a few potential answers but I thought this one might be a good one to put out there for feedback from readers. His suggestions were:

  • Two consecutive  quarters of positive free cash flow?
  • Drop pooled benefits company like Administaff for in-house benefits administration?
  • Anything > C round, seeking to lever w/ mezz debt or file S-1?
  • Name of company becomes a verb in our lexicon?
  • Receive gov’t stimulus funding?
  • Oprah uses your product?

For a long time I’ve asked entrepreneurs at what point their company no longer felt like it was a start-up. The answers were remarkably consistent, although I don’t think exactly answer the question in the way that was meant above. In any event, most founders tell me that around 30 employees is when their start-up companies start to feel like real businesses (or at least feel “different” – I think largely stemming from the fact that around 30 employees is the time when a CEO no longer really feels like the know all of the people that work for them). Of course depending on their funding and growth expectations this can happen at many points on a company’s growth curve and spending money (i.e., hiring employees” is not the mark of a business), so I feel that a better metric is probably the right one. Or more likely several better metrics.

 

imeem Founder Dalton Caldwell Gives A High-level Analysis Of The Common Business Models For Music Start-ups

Author: Jason Kincaid

One of the standout talks at Start-up School came from Dalton Caldwell, the founder of defunct music startup imeem who is now running his second company, picplz. If you’ve ever considered launching a music startup yourself, or wondered why so many seem to falter, it’s really a must-watch. We’ve embedded a video of his full talk here, and he’s also given us the slides so you can take your time reading through some of the data points he lists off.

Watch live video from Startup School on Justin.tv

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Is The Entrepreneurial Path Right For You?

Author: Mark McClain 

It’s often hard to choose between staying with the comfort and perceived safety of a corporate job and moving to the excitement and potential riches of the startup world. I know. I’ve been bitten by the entrepreneur bug twice.

Before you tender your resignation, allow me to play devil’s advocate for a bit. It might help you determine if you would truly be following an entrepreneurial impulse or if you’re simply bored at your current position.

Being an entrepreneur means you can determine your own destiny and experience the adrenaline rush of building something from the ground up.  There’s no better feeling than putting your heart and soul into your own company to deliver a product (or service) that you’re passionate about. But start-up life has been dramatized by the media in a way that doesn’t quite capture reality.

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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.

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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.

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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">

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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.

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