The Two Most Common Entrepreneur Mistakes

I was on an American Marketing Association (AMA) panel today with Reggie Bradford of Vitrue and Joel Lunenfeld of Moxie Interactive — moderated by Benjamin Rudolph of Relevance Advisers. Reggie made a comment that stuck with me saying he received advice early on from a VC who’s been investing in startups for 20 years. The VC told him these are the two most common mistakes made by entrepreneurs:

  1. Not firing poor performing/bad fit employees fast enough. As an entrepreneur, there’s an effusive optimism that plays out in the tendency to believe everyone can be successful on your team. That’s just not the case — be slow to hire and quick to fire.
  2. Pricing the product or service too low. When first launching a product or service, the natural inclination is to price it in a way that makes it appealing to large group of buyers, which usually means a lower price. Unfortunately, a lower price can mean the difference between success or failure as it signals a quality message and affects margins.

What do you think? What are the most common entrepreneur mistakes?

Thinking About the Three Year Goal

Today I had the opportunity to talk with two different potential EO Accelerator entrepreneurs. One of the questions I always ask is “What are your revenue and company size goals three years from now?” I don’t ask that question because I believe having a large company is the only way to go, in fact, here is info on my ideal company. Rather, I ask because the goal of EO Accelerator is help entrepreneurs with revenues under $1 million grow their business to the $1 million mark so that they can then join EO. If the entrepreneur doesn’t mention a three year goal of at least $1 million in revenue, then they aren’t a good fit for EO Accelerator.

So, with that in mind, here are some things I’ve noticed:

  • Some entrepreneurs give the three year goal but then go into their grandiose plan for five or ten years from now, showing that they are ambitious
  • Some entrepreneurs say they haven’t thought it too much and just want to grow their business
  • Few entrepreneurs give concrete numbers, instead offering vague ranges of values, showing they haven’t mapped out where they want to be, and worked backwards from it to now what they need to do to get there

My advice to entrepreneurs is to think hard about your three year goal and spend time working backwards from it to come up with a plan for what you need to accomplish in the interim. The best time to start is now.

Boredom in Startups

Boredom and startups don’t go together. By the very nature of a startup there are always 100 things to do because there is a lack of resources and people to execute on all the ideas. At today’s EO Accelerator accountability group, one of the entrepreneurs mentioned he was bored with doing a certain part of the business related to a third-party service. When he used the word bored I knew what he really meant: that function was no longer adding value to the business.

My takeaway from that conversation was that as soon as something becomes boring or doesn’t add value, immediately kill it. Too much cruft gets added along the way as the business grows and leaving things in there that you don’t care about only makes it worse.

What do you see that should be stopped in your business? Can you get rid of it?

User’s Conference Planning

We’re deep into the process of planing our annual user’s conference. I really underestimated the power and importance of user’s conferences before we put on our first one a few years ago. There’s something incredibly powerful about spending a day or two with customers, learning how different clients use your product, and talking about the future vision. It really is a great morale builder and helps nurture and deepen relationships.

Here are a few general items we think about as part of our user’s conference planning:

  • Charge a reasonable fee that barely covers costs but still allows for a great event
  • The venue is extremely important and should be recently renovated and professional (don’t skimp on the venue!)
  • Have as many clients speak as possible — customers love to learn from other customers
  • Provide a back channel for clients to communicate including a Twitter hashtag
  • Line up the conference dates at least six months in advance and solicit speakers for the agenda
  • Get partners/resellers involved in addition to customers and employees
  • Include a happy hour or field trip to help foster relationships
  • Buy the best internet access you can afford and get backup options like 4G wireless
  • Make it fun!

What else? Have you been to a user’s conference that was especially memorable?

Ecommerce Mystery Coupons

Last month there was a good bit of dialogue around the lack of innovation in the ecommerce world. Over half of the top 15 internet sites didn’t exist 10 years ago, yet only one of the top 15 ecommerce sites didn’t exist 10 years ago. There are lots of theories why but I’m not going into those now. I want to talk about something related.

My wife was doing some online shopping, and is passionate about saving money and finding the best deals — she truly gets excited about it. One of the retailers she shops at was running a promotional campaign I hadn’t seen before: put in your email address to have a mystery coupon, worth up to 50% off, sent to you. This is brilliant. As I mentioned before, email is a currency that’s worth more than people realize. People love getting deals and playing games — a mystery coupon combines the two. I believe we’ll see more of these types of campaigns in the future.

What are some analogous ideas in the B2B world? Do you think these types of campaigns will become more commonplace?

Thinking About the Perfect Office

We’re a little over nine months out from finishing our current office lease. You see, historically, we’ve always done subleases, and we plan on continuing to do so. The big difference this time is that we plan on heavily customizing our space, unless an awesome creative space comes along, which isn’t likely in the financial district of Buckhead in Atlanta.

A sublease usually only needs to be negotiated 3-4 months before assumption of the lease. But, when building out or modifying an office, it’s usually good to add another 3-4 months for pulling permits, doing construction, etc.

Now, if you had a clean canvas and could paint a perfect of the perfect office, what would it look like? That’s a question we’ve been debating for a few days now. Here are some of the initial ideas:

  • Open, collaborative space with no cubes or individual offices
  • Lots of conference rooms and phone booths for privacy
  • Awesome kitchen with free food
  • Bright colors and modern decorations
  • Lounge area with sofas for hanging out
  • Multi-purpose area that can host events, all hands meetings, etc
  • Balcony or patio outdoors
  • High in the sky with great views or a loft style space with tall ceilings
  • Shower and relaxation room

What else? What should we add to the list? Do you have any good examples?

Where do Entrepreneurs Hang Out

I was talking with Mike Landman, the incoming President of Entrepreneurs’ Organization (EO) Atlanta, earlier today about how to spread the word and recruit more members into EO. EO is the organization that entrepreneurs who’ve been in business for a few years, and have over a million dollars in revenue, wish they would have known about all along. It’s an exclusive non-profit for entrepreneurs to network with other entrepreneurs with a strict non-solicitation rule, participate in peer-to-peer experience sharing forums, and learn from some of the best speakers around.

So, our discussion today was about where entrepreneurs hang out, and how to reach them. We identified the obvious places:

What else? What are some other places entrepreneurs hang out in Atlanta?