Tech Entrepreneuring – the ultimate reality program

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Here’s a presentation I made thanks to www.htdc.org folks. Mahalo Nui to Sandy Park, Laurie Akau, and everyone else over there for their hard work in putting this together.

Good fun!

What I talk about in this 1.5 hr presentation is:

– How to ride a tech trend up, down, and out with class.
– What VC’s look for
– A slightly different model for starting up companies with far less capital yet with similar gains.

– a small dose of a spiritual perspective on success

Let me know what you think!

simple, yet deep entrepreneurial tips

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Marc Hedlund put up these tips to live by at ETech, Dane at Business Opportunities Weblog condensed them, and I remixed them here.

  • Losing sucks
  • Building to flip is building to flop
  • Prudence becomes procrastination
  • Momentum builds on itself
  • Jump when you are more excited than afraid
  • Pay attention to the idea that won’t leave you alone
  • If you keep your secrets from the market, the market will keep its secrets from you
  • Immediate yes is immediate no
  • Build what you know
  • Give people what they need, not what they say they need
  • Your ideas will get better the more you know about business
  • Three is fine; two, divine
  • Work only with people you like and believe in
  • Work with people who like and believe in you, just naturally
  • Great things are made by people who share a passion, not by those who have been talked into one
  • Cool ideas are useless without great needs
  • Build the simplest thing possible
  • Solve problems, not potential problems
  • Test everything with real people
  • Start with nothing, and have nothing for as long as possible –
  • The best investor pitches are plainspoken
  • No means maybe and yes means maybe
  • For investors, the product is nothing —
  • The best way to get investment is not to need it

Handling Q&A

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Read “Icing the Hot Seat” By Jerry Weissman, Power Presentations, Ltd. for some really good tips on how to handle Q&A:

  1. DON’T make a list of potential tough questions and prepare an answer for each.
  2. DON’T refer back to a slide if someone asks a question about a subject you’ve already covered.
  3. DON’T compliment your questioner by saying, “That was a good question,” or “I’m glad you asked that.”
  4. DON’T think you don’t have to answer irrelevant questions.
  5. DON’T use every question as an opportunity to deliver your message.
  6. DON’T shift to a different subject if you don’t know the answer to a question.
  7. DON’T feel you must answer all the questions if you are asked a multiple question.
  8. DON’T repeat the question so that everyone can hear it.
  9. DON’T say, “I’m not at liberty to answer,” or “If I told you, I’d have to kill you,” if a question addresses a confidential matter.
  10. DON’T answer the question you want to answer.

How to sell $1.3M of software in 3 days and lose a ton of money

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Good story here:

“How Axosoft Sold $1.3 Million Worth of Software in 3 Days”

Here’s how they did it:

1. Take a $495 package and instead sell it for $5.
2. Promise you will donate all of the $5 to the Red Cross.
3. Get Robert Scoble to promote your promotion.

The immediate result:

A. Sell 2,642 copies of the software.
B. Get your ass handed to you in terms of credit card payment fees that you have to eat.
C. Divert the entire company to fullfilling unprofitable orders.
D. Lose a lot of money.

The long term possible result:
I. Great PR.
II. Great referral.
III. Great word-of-mouth marketing potential.
IV. Good chance to get support revenue.

Summary:

A fantastic story of how to get a lot of buzz about your company. Even though they “lost money”, it would have cost them tons more to get similar coverage using traditional methods. For that, they should be commended.

Many businesses fail because they have too much capital

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I’ve got a personal affinity to bootstrapped startups. Bootstrapped to me means starting up with little or no capital. I like that model because it forces you to watch every single penny, every single hour, every customer, every sale, every problem, and every employee.

Think you can’t start your company without money? Well, that is probably technically true, but that doesn’t mean you can’t get started with doing *something*.

I was working with an entrepreneur who didn’t have enough capital to start up his company. His solution was to try to sell t-shirts with the company logo and use that to raise a few bucks until he can get going. Who knows whether he’ll succeed in that or not, but you gotta give him credit for being both resolute in his conviction and creative in his resourcefulness.

Ed Sim wrote this post “Having too much money can be a curse, not a blessing” that motivated me publish my $0.02.

Obvious tips to remember when dealing with the media

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I’ve seen so many companies make so many stupid mistakes when dealing with the press that it’s not even funny. You’d think that brilliant management teams that can leap all buildings in a single bound would use that same IQ to apply some common sense when they work with the media, but they don’t. So here’s a few simple, obvious tips to consider when you want/have to deal with the press:

#1 Don’t lie

This is so common sense yet gets blown so many times I gotta lay it out. When you’re talking w/ a reporter, remember that there’s a damn good chance they will fact-check everything you say, and many times they will fact-check it by calling your competitor. So whether you’re bragging to the reporter about the latest coolest thing that you did, or trying to cover up for the latest dumbass decision, know that your arch-enemy will have a chance to tell the real truth, just in case you didn’t.

So how do you handle that? Easy: prepare. Whether you’re going to call a reporter with good news or you think you might get called by a reporter on some bad news, make sure you’ve brainstormed a list of all possible questions you might get asked and have an answer ready for each and every one of them, and please, make sure your answers are drop-dead honest. This doesn’t mean you need to gush out every single thing that’s ever happened, just make sure that whatever you do talk about is so honest that the best your competitor will be able to say is, "Wow, I didn’t know that."

#2 If it’s public, they’ll find it

This may seem overwhelmingly obvious, but you’d be surprised. If you’ve had to make any kind of a public filing, the press already knows about it. So don’t deny the fact that you’ve started a new company, or filed for X, or had a judgement against you, or sold your stock, or whatever. They know. Don’t insult them by breaking rule #1.

#3 WTF is your message?

You’ve spent tons of time refining your elevator pitch, right? Why don’t you spend a fraction of that time getting your media message buttoned down too? What is it that you want everyone to know? If you can’t spew that out in just a few words, what makes you think the reporter can? Be clear on what you want the main message of your conversation to be. I know you want to keep talking about every wonderful thing under the sun and I know it makes you feel really great, but leave out the crap and stay on message. If you can’t decide on what you’re trying to say, the reporter will.

#4 Who should cares and why?

People sometimes think that the press really can’t wait to publish the fact that your company shattered last year’s sales records. The press doesn’t really give a rat’s butt about anything. What they do care about, however, is what their readers care about. So before you pickup the phone and get all excited that your supplier just gave you a shiny trophy for selling the most widgets in your area, think about this: what percentage of this media’s audience will really give a crap? And if it’s < 20%, don’t waste their time and make yourself look stupid by calling them about a story that on one will care about.

#5 Be prepared to answer questions you might not like

If you do have something newsworthy and the media is interested, in addition to preparing for #3, you also want to prepare for the possibility of getting asked about something tangential, like "Can you explain why you fired your VP of Marketing last month?". Just because they didn’t call you last month on some dirty laundry doesn’t mean they won’t ask you about it now. Be ready.

#6 Come to Jesus as early as you can

The best way to not get bad press is to call them before they call you. It’s 10,000 times better than getting an unexpected call that don’t return, or, worse yet, respond with "No comment". When you call them first, you’re in control. You’ve thought through the questions, you’ve got the right answers, and you know what your message is. When you stick your head in the sand and then the phone rings, it’s almost a guarantee that you won’t get out the message that you want. And their’s nothing the media loves more than some juicy bad news.

 

I’ve got a few more points that I’ll share later. Stay tuned.

 

[update: Guy Kawasaki’s blog has some addition Q&A with Adam Lashinsky of Fortune magazine and there’s some interesting overlap. ]

One leg at a time…

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Entrepreneurs sometimes look upon VC’s like some kind of supernatural, infallible, ever-wise uberMortal.

And of course nothing could be further from the truth. VC’s are first and foremost people, just like you and I, with strengths and weaknesses. They make mistakes about as often as anyone else does.

The only thing that really gives them the aura is the money and their ability to direct it. But don’t let that fool you. Just ’cause they have a lot of money, doesn’t always mean they know how to invest it.

Want proof? Read “Redpoint Ventures raises $400 million, despite mediocre results” to get a dose of reality:

As of Sept 30 of last year, Redpoint’s $600 million first fund, raised in Oct. 1999, was showing a negative 18.5 percent internal rate of return, according to the University of California endowment, which is an investor.

As of June of last year, Redpoint’s $750 million second fund, which was raised in August 2000 (it was initially $1.25 billion, but Redpoint later returned money to investors, saying it couldn’t invest it all) had an internal rate of return of negative 13.9 percent.

I think it really helps to remember that VC’s put their pants on one leg at a time. When you go asking them for money, just remember that they’re not Gods, just a bunch of people trying to make the right bet on the right company, and most of the time they are wrong.

Getting cozy with VCs

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Guy Kawasaki has posted some good wisdom on what VC’s like. My favs:

  • Build a real business.
  • Get an intro.
  • Obey the 10/20/30 rule.
  • Show traction.
  • Clean up your act.
  • Disclose everything.
  • Acknowledge, or create, an enemy.
  • Don’t fall for old trick questions.
  • Under promise and over deliver.

A very good read.

Patent Searches

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I received an email recently:

I have a patent pending technology in e-commerce that deals with comparison shopping and would like to have a patent search done on it. Would you be able to recommend a company that can help me with this?

Here’s the answer:

Patent searches could and should be done by you first. Go to uspto.gov and do it. Google will actually be an even better patent search mechanism in that you can look around for things that may be prior art but not necessarily patented.

If you really want your patent to be good, you must become an expert in that field. Otherwise you’ll potentially spend a lot of time & money to patent something which is potentially worthless or has already been invented. You need to know about all the other techniques used to do things similar to what you’re doing.

I asked Patent attorney Leighton Chong what he thought about this and he added:

You might also include the importance of “literature” searching as well, i.e., white papers, industry proceedings, conference symposia, press releases, new product literature, etc. These commonly precede patent publications, and are far more diverse, wider ranging, and easier for anyone to publish than patents. Online searching for published literature is also made convenient through search engines like Google which are about as reliable as industry databases. Since published literature is just as usable for prior art as published patents, in my opinion it is far more important to search published literature than patents.