I was reading the TechFlash blog post on the RescueTime founder and CEO leaving after 28 months to start a new venture and it occurred to me that there are almost no launch-and-move-on entrepreneurs in Atlanta. What I mean by that is an entrepreneur who enjoys the birth to early growth stage of getting a company off the ground, but then turns the reins over and goes on to their next idea. Now, I don’t know if this is a good thing or bad thing, but does a strong startup ecosystem need more of these types of entrepreneurs?
As another example, last Fall, the Twitter co-founder Jack Dorsey announced his new company Square to process credit cards on iPhones. He’s another launch-and-move-on entrepreneur. One benefit of this type of entrepreneur in the community is that there will be more companies with strong foundations growing fast. One downside might be that the entrepreneur leaves prematurely and the company doesn’t do as well. Of course, that is hard to predict.
What do you think? Does Atlanta need more of these types of entrepreneurs? Do you know of any entrepreneurs like this in Atlanta?
Side note: RescueTime is partially funded by an angel investor in Atlanta.
One of the interesting aspects of entrepreneurs that I’ve noticed, but haven’t articulated, is that of the producer mindset. What I mean is that entrepreneurs typically have an inherent need to continually build things — companies, products, teams, projects, etc. When looking for that right co-founder, I’d probe and ask them if they did any of the following in their youth:
- Lemonade stand
- Yard work for neighbors
- Classified ad newsletter (this would be pre-Craigslist)
- Web design for businesses
- Miscellaneous business (e.g. sports cards, animal husbandry like hamster breeding, etc)
Then, the most important follow-up is to ask why they did one or more of those items. The key response you want to hear is that they identified an opportunity and went after it — not that their mom/dad said they needed to get out of the house.
What else? Do you agree that entrepreneurs typically have a producer mentality?
I believe a good domain name, and thus company name, is absolutely critical for a software/web-based business. The challenge, naturally, is that it is difficult and/or expensive to find a good name that isn’t already taken. Here are some rules I try to follow:
- 10 characters or less
- Must be a .com and not a secondary extension
- Should be phonetically spelled and easily spoken in English
- Always purchased and not rented/leased from someone else
- Ideally relevant to the business, but this is more optional
To meet these requirements I’ve generally found it takes a budget of $500 – $1,000 and the buying of an existing domain on Sedo.com. It is still worth trying a site like BustAName.com to find an unregistered domain, but I haven’t had luck going that route in several years.
What else? What other attributes do you look for in a good domain name?
One of the questions I like to ask entrepreneurs is “Are you unleashing latent demand for your product or are you taping into existing demand?” This question is another way of asking “Do most of your clients have an existing vendor that you replace or are you the first vendor they ever use?” Here are a few questions that come up with this important question:
- Why isn’t there more demand already?
- What can you do to help grow the market?
- Can you solve the problem(s) that is/are holding back the growth of the market?
- Is it a timing issue (e.g. the market is about to explode) or is it so early that you risk not getting to scale?
The question also helps determine if it is an innovative or replicative business. My recommendation is to think through this topic as part of strategic positioning for the business.
Do you agree? What other questions would you ask related to market demand?
A few days ago I was talking to an entrepreneur who was considering bringing on a business partner, who wanted significant equity. Now, this potential business partner had been a VP at several previous companies but hadn’t started a business and this entrepreneur was concerned if he had the entrepreneurial mentality — the owner mentality.
Here are some questions to ask when determining if the owners mentality is present:
- Are you prepared to personally guarantee the business line of credit and office space, using your house as collateral?
- Are you comfortable with inconsistent cash flows potentially resulting in significantly reduced paychecks?
- Are you prepared to roll up your sleeves and take on any and all tasks to ensure success, even if they take you out of your comfort zone?
What else? What other attributes would you include with the owners mentality?
Today we kicked off our first investment for Shotput Ventures 2010. Now, like Shotput last year, we don’t talk about the specifics of our portfolio companies until they launch, but one of the things I want to do is capture more of the lessons learned as we go through the 12 week mentoring process.
During our discussions about their product today, which comprised most of the few hours, several issues were brought up:
- What’s the right balance between working on code and talking to prospects?
- How simple should a minimum viable product actually be?
- What functionality can standalone and what is dependent on other items?
- How should the features be prioritized?
While there is no right or wrong answer, one piece we did quickly realize is that the team was building a good bit of functionality that was overkill for getting something out the door that added real business value. This is especially true when there’s such a clean slate with a new product — new features are incredibly easy and fast to add. The hidden problem, which most entrepreneurs don’t appreciate until after they’ve felt the pain, is that these quick-to-add features add code debt and actually slow down development in the future — when it is even more important to move fast.
My advice: ask yourself “Do we really need this?” for every little feature or option of a feature when building a product — you’ll appreciate it in the long run.
My initial inspiration for doing a post every day on my blog came from Fred Wilson’s blog over at avc.com
. Amazingly, he’s already done 5,000 posts. Yes, 5,000. This post is actually my 365th post, and I’m feeling pretty good about things. One area that I’m still working on is the name for this blog.
Here are some names I’ve used:
- Entrepreneur Musings — not sure it is specific enough
- B2B Tech Entrepreneur — possibly too generic
- Startup Stammer — not a positive connotation with stammer although I do like the alliteration
- 10,000 Startup Hours — the current title, which comes from the Malcom Gladwell book Outliers and is the idea that it takes 10,000 hours to become good at something
My goal with the name is to be unique and memorable but also pretty relevant, whenever possible.
What do you think of the new name? What are some blog names you like?
One aspect of entrepreneurship that isn’t talked about very often is the personal growth path. What I mean by this is the necessary progression management progression during the lifecycle of a startup that scales from nothing to tens, hundreds, or even thousands of employees.
Here are some sample inflection points:
- 0 – 10 employees – doer and manager
- 11 – 20 employees – mostly manager and some manager of managers
- 21 – 50 employees – mostly manager of managers and some manager of manager of managers
- 50+ employees – manager of manager of managers (e.g. manager of an executive team)
There’s a book just about this subject — Leading at the Speed of Growth. My advice is for entrepreneurs to be cognizant of this path and to prepare and understand it as best they can.
The startup process: there is none. Much like the debate around business plan competitions being bad (too much making up stuff) and a potential solution being business model competitions, startups shouldn’t be viewed as having a formula. Rather, they should be viewed as a multi-year marathon with a series of iterations (some people say pivots, but I prefer iterations).
Generally, from my experience, here’s one way to look at the startup process:
- First six months – Build the beta product and get it in the hands of the early adopters
- Second six months – Refine the product and get ready for launch
- Second year – Focus on optimizing the customer acquisition process
- Third year and beyond – Scale and grow the business
What else? What would you include in a simple startup process?
We’re getting close to the launch of our first book and it has been quite the learning experience. I sprearheaded the process and worked on it with my co-founder as well as several other great people on my team. From start to finish it took a solid eight months.
Here are some book details:
- 160 page trade paperback
- Seven chapters
- Published through a local publisher
- Printed through CreateSpace.com
Here are some lessons learned:
- Plan for it to take 50% longer than expected — the post writing process is still time consuming
- Get stakeholders involved in the editing process throughout the writing and not all at the end
- Use the book content for company white papers
- Prepare for several rounds of printed proofs to work out kinks in formating
- Build a spreadsheet of people to be sent a copy at launch and ask for an Amazon.com review
If you’d like a free copy of the book, please post a comment here and I’ll have one sent to you. Yes, the topic is a surprise until a week from Tuesday when it comes out. Thanks!