Blog

Last week an entrepreneur emailed me asking for advice about building out a sales team. Knowing the entrepreneur, and his situation, I replied that he shouldn’t be spending any time right now trying to figure out how to build a repeatable customer acquisition process. Why? He hadn’t achieved product / market fit yet (see the four stages). Spending time on a sales team would take away from the more important task at hand.

Here are a few requests that should often be rejected:

• Will you introduce me to VCs? If the startup doesn’t have a serious user base or over a million in recurring revenue, VCs don’t make sense.
• Will you give me advice on hiring a VP of Sales? Resist the VP of Sales temptation.
• Will you help me outsource software development? No, a tech startup shouldn’t outsource the core of their business.

So, the next time an entrepreneur requests help that doesn’t make sense, reject it and point them in the right direction.

What else? What are some other examples of entrepreneurs asking for help on things they should be avoiding?

I get asked on a regular basis about balancing time between several different initiatives. I’m working on a new software company (Kevy), a tech entrepreneurship center (Atlanta Tech Village), and investing in startups (Atlanta Ventures). Yesterday, I was talking to an entrepreneur and he said a statement that helped crystallize my thinking:

Routine sets you free.

There it is: a simple four word strategy for business and life. The idea is that by having a simple routine I can maintain a pulse of how things are going, regardless of number of projects, and jump in and help wherever I can add the most value. When people hear how many meetings I have, there’s a tendency to think it’s overkill. In reality, they’re focused and add a tremendous amount of value (list of meetings).

So, the next time there’s a challenge juggling a number of different initiatives, considering developing a more consistent rhythm, and let the routine set you free.

What else? What are your thoughts on letting a routine set you free?

Tomorrow I’m giving my Start With What You Know – 7 entrepreneur lessons (SlideShare slides) talk at the Industry Leadership Summit. I’ve given the talk 5 or 6 times now and each time I tweak it slightly to improve the flow and content. Overall, the idea is that success is all about continual learning based on what you know at the time and constantly looking for ways to improve. Pretty simple, right?

Here are the seven entrepreneur lessons learned:

• Even great products need marketing.
  Winning product awards and accolades doesn’t translate into sales. Building a repeatable customer acquisition process is a must.
• Sell “pain killers.” Not vitamins.
  Solve hard, meaningful problems. Avoid vitamins and candy.
• Embrace your constraints.
  All startups have constraints. Make them an advantage.
• The startup with the most money doesn’t always win.
  Money matters to a certain point but heavily funded competitors aren’t as scary as expected.
• Good timing is better than good luck.
  Pick a fast-growing market with a huge opportunity, and get the timing right.
• Focus on one thing and do it well.
  More success results in more distractions. Stay true to the vision.
• Culture matters.
  The only sustainable competitive advantage is a great culture.

Take a look at the slides online and I’ll post a video of the talk in the future.

What else? What are some of your other favorite entrepreneur lessons learned?

With Dragon Army, our new mobile games studio at the Atlanta Tech Village, there have been a number of interesting conversations with entrepreneurs and business leaders in the community. Everyone is excited about building great, casual games and other consumer apps in Atlanta. One of the most common questions I personally receive is how are things different with a B2C startup, like Dragon Army, compared to my background in B2B startups. Well, there’s one main difference that stands out above all else:

Video games, much like the movie industry, is a hits business where users have to truly love the product.

Now, with business applications, the goal is find product / market fit such that the product solves a major issue that customers are dealing with on a regular basis. Even if the business product isn’t perfect and isn’t pretty, it can solve a meaningful problem and be successful. With video games, mediocre isn’t good enough to build a real, scalable company. And a great game doesn’t happen on the first try. Famously, Rovio, the company that makes Angry Birds, built dozens and dozens of games before making their break-out hit.

So, the next time someone talks about B2B vs B2C, think about being in the hits business.

What else? What are some other thoughts about being in the hits business?

Recently I was talking to an entrepreneur that has owned his own consulting firm for many years and is in the process of spinning out a startup based around a product they had built for a customer. After hearing the pitch, and seeing the product, I thought about it for a minute and offered up a few suggestions.

Here are a few ideas around spinning a startup out of a consulting firm:

• Ensure the startup is truly separate from the consulting firm including separate employees, payroll, financials, etc (shared office space makes sense but the startup needs to be a completely different business)
• If the consulting firm is owned by one person, it’s important to unwind the use of “I” and to start using “we”, assuming the startup is going to have one or more co-founders and an employee stock option plan
• With a handful of paying customers courtesy of existing consulting relationships, there’s a good chance there’s solid progress towards product/market fit, but it’s important to separate out the consulting value from the product value so that the majority of future clients buy the product without buying the consulting
• Building a repeatable customer acquisition process will be one of the most difficult things as the sales and marketing process for a product company is often very different from a consulting company, and most consulting companies don’t have a repeatable customer acquisition process, so they don’t know what it looks like (most consulting companies generate customers via word-of-mouth)
• Determining the startup’s core competency early on (e.g. product/engineering focused or sales focused) is important as well as it’s a different mindset from a consulting firm where the core competency is the domain expertise and specialty of the consultants

All startups are hard regardless of origin. Spinning a startup out of a consulting firm is especially difficult as there’s a tendency to not fully separate the two and resources eventually get pulled back into the larger entity as it’s the one paying the bills. Figuring out how to get the startup self sustainable as quickly as possible through sales or investors is key.

What else? What are some other thoughts on spinning a startup out of a consulting firm?

Jeff Haynie gave a passionate talk today at the Atlanta Tech Village about lessons learned growing his 170+ person company Appcelerator. Over the past six years, Jeff has raised over $75 million dollars, fought off a near-shutdown of his startup, and built one of the fastest growing mobile app development platforms in the world.

Here are a few notes from the talk:

• Investment capital is portable, so it doesn’t matter where the entrepreneur is located
• Entrepreneurs should raise as much money possible from anyone available and not worry about control
• Future growth in technology will come from wearable computing and mobile devices (Dell went private so that they could kill their PC business faster and reinvent themselves)
• Shift away from Nokia and Blackberry as the dominant platforms to Apple and Android were faster and more dramatic than people expected, making Appcelerator’s timing even better
• Almost went out a business when Apple changed their terms of service disallowing programs like Appcelerator to produce iOS apps, but two months later Apple reversed the change

A big thanks to Jeff for spending time with us today and sharing some of his lessons learned.

What else? What are some other takeaways from today’s talk with Jeff?