Go BIG Network Entrepreneur Blog

Can you Afford Not to be an Entrepreneur?

Wed, 23 Jul 2008 11:00:00 GMT

There's an old adage that says "Entrepreneurs do what other people won't in order to do what other people can't."

The suggestion there is spot on - that the entrepreneurs who get to live the life people dream about did so because they were willing to make the sacrifices it took to make that life happen.

So the question really is: can you afford not to be an entrepreneur?

If the answer is “yes”, your life will probably be just fine doing whatever it is that you enjoy doing. But if you really want a taste for what it means to control your own world and reap the benefits of taking risks, starting off on your own is really the only option.

A Paycheck versus a Pay Out

Most people equate starting and growing a business to the financial rewards of being the business owner. That's because business owners enjoy the difference between earning a paycheck and earning the bigger reward - a pay out.

You may think those with a big paycheck, like the Celtics' Kevin Garnett's $25 million pay stub, are the big winners. Not at all. It's the guy who can write that check, like Celtics owner and Highland Capital Managing Partner Wycliffe Grousbeckand, who paid $360 million for the entire team.

Even if Kevin Garnett continues to be the highest paid player in the NBA for the next decade, he still won’t be writing the checks that his boss can.

The real cash comes from either the profits of the business on a regular basis or the eventual sale or IPO of the business down the road. Until your earnings are tied to the performance of the company, not your position, you’ll never be in a position to enjoy the real rewards.

Give Yourself a Raise

As big as they can get, paychecks are inherently limited to what someone else is willing to pay you. If you can’t stand the idea of someone else determining what your pay scale should be, then starting a company is the fastest way to change all that.

The day you start your own company, the only person that will ever determine your income is you. If you’re as good as you think you are, the sky’s the limit.

Most entrepreneurs are financially stifled in their current jobs, particularly among younger workers. Since salaries are often dependent on age and experience, not raw capability, your earnings may not at all reflect what you are truly capable of.

Consider the fact that Bill Gates, Michael Dell, and Steve Jobs were all around 30 when their companies went public. Can you imagine how little they would have been paid (by comparison) if they had stayed in their salaried jobs? Clearly their ages had nothing to do with their capability, and starting their own venture was the only way to prove that.

Don’t Leave Money on the Table

When you’re working for a paycheck, you’re making yourself a bit of money, but you’re also making the company a bit of money. Every hour of your time is putting a dollar in your pocket, but it’s also putting a dollar in the owner’s pocket as well, which is good for him, not so good for you.

The fastest way to double your money is to put both of the dollars in your pocket for the same amount of effort! Of course as the owner yourself you may have more overhead than you would as an employee, but long term you’re not only maximizing the payout on your time, you’re creating a business that will one day exceed your own value.

Cumulative Value

Even if you’re incredibly well paid in your current position, it doesn’t change the fact that you’re only one person. You can only earn as much as your own time and contribution will afford you. At some point, in order to get to the next level, you need the company working for you, not the other way around.

That means taking on employees and leveraging the economies of scale. As the employer, you can infinitely scale the size of your income by adding more business and more employees. At some point the cumulative value of their contributions will far exceed what you could possibly earn as a W-2 employee.

Stop the Bleed

No one is ever surprised to hear that you can make a great deal of money as a successful entrepreneur.

What is surprising is to consider how much you’re losing by not being an entrepreneur yourself. When you add up how much value you’re losing by taking a paycheck every week, you start to wonder what was keeping you from taking the plunge in the first place.

In many ways, starting your own company is the only way to eliminate the risk of not being paid enough.

Your First idea is only the Beginning

Wed, 09 Jul 2008 09:37:47 GMT

Your First idea is only the Beginning

Like everything else in this life, the plan for your new startup company will almost certainly change beyond anything you could have contemplated.

We would all love to think that we can have one new product idea that is so brilliant we never need to change a thing, but that rarely happens. In fact, many successful companies launch with one idea in mind but become fabulously successful by shifting directions completely.

Google started out just powering keyword searches before they realized they could become a massive advertising platform. The founders of PayPal thought they were going to build a company that beamed payments between Palm Pilots before they shifted focus to power payments on eBay.

Ideas, even the ones that are the basis for your entire company, were made to be changed. It’s important, however, to understand why those ideas change and how to feel comfortable reacting to them.

You don’t have a Customer

A big part of the reason startup companies have to change product strategies early in the game is because they are only guessing at what the customer really wants.

Sure, you may get some focus groups that tell you what they’re willing to buy, but until someone actually writes a check for your product, it’s still an educated guess at best. Only when the product hits the shelves and people react with their wallets can you truly evaluate the idea.

Prior to having real customers, it’s fair to assume that your product idea is only in “beta mode”. Assume that the product will likely change dramatically based on true market testing with real customers on a sustained basis. In the event that your initial idea is spot on and no changes need to be made, you’ve become the exception, not the rule.

You don’t have any Scale

Even if the first few customers do purchase your initial product just as you had envisioned, the product still isn’t truly tested until you’ve sold enough of it.

You may think that just because the neighborhood wives have all bought your fancy homemade hand lotion that you’ve got it figured out. But until the product can sell next to dozens of others on the shelves at Wal-Mart, you really don’t know how great it is.

It’s easy to get excited about the success of a small market test or an initial reaction to your product, especially if people are buying. But that doesn’t mean the idea and its success will necessarily scale to a bigger company. Like not having any customers to begin with, not having any great amount of scale in your sales relegates you to still having to guess whether your product is ready for the big leagues.

You may find that the approach that works for your local market only makes sense for that audience. Once again, you’ll have to be prepared to consider drastic changes to your product if you want to reach a much more substantial audience.

You don’t have a Company

There’s a big difference between solving a problem on paper with your business plan and building a successful company with that same idea. Until you’ve tried to build an entire business around your idea, especially one that employs lots of other people, you still don’t know how well that idea translates into a growing company.

Many ideas work great to support just one person, and that’s OK too. However if the business idea only works if you’re the person creating all of the work, it may need to be modified to scale. Some ideas, like offering consulting services based on your personal wisdom, will need to change significantly if you’re going to scale them past just yourself.

The goal of a business is usually to solve a customer’s problem, not to solve the problem of building a company. So it’s no surprise that in order to support the growth of the company, you may have to broaden or change the focus of the product accordingly.

Prepare for Change

No matter what your cause for change, and truthfully it will probably be all of the items mentioned above, you need to embrace that things will inevitably shift, maybe even dramatically.

With so many unknown factors going into your startup company’s launch, it would actually be a miracle if you were to pick the perfect product without any real market testing. For those of you that are truly the prophets of product development, we salute you and your wisdom.

For the rest of us poor schleps that aren’t as all-knowing, it’s back to the drawing board over and over until we find a fit that works.

How to Part Company with a Smile

Wed, 25 Jun 2008 11:30:00 GMT

No matter how well your startup company does, sooner or later you're going to be faced with the fact that someone has to go. It may be a disgruntled co-founder or it may be the intern that looked great on paper but turned into a disaster when they walked into the office.

While parting company is a tough thing to do, there are definitely better and worse ways to go about it. There's an art to ending a corporate romance on a positive note, and it starts with looking past the moment of departure and into the future.

One Size Doesn’t Fit All

Unlike the big corporate machine where everyone is expected to fit in, a startup company is a perpetually chaotic, anxiety-inducing roller coaster of emotion that fits very few people real well. Chances are the person you are sitting across from is just not a fit for any startup company, let alone yours.

A great way to set the stage is to explain how well you understand the incredible challenges of being in a startup company and that it’s very difficult for anyone to maintain their footing in this environment. This isn’t about you patronizing your co-workers – it’s about recognizing the fact that there are often very good reasons the fit just isn’t right and using those reasons as a platform for departure.

In many cases the person you’re sitting across from has had to endure a lot of sacrifices just to be able to contribute at all. Even if they didn’t work out as an employee, it’s a good idea to recognize and appreciate the sacrifices they have made up until this point. Those sacrifices were part of their contribution.

Leave the Door Open

Although today you may feel like you can’t possibly get this person out of the door fast enough, always be sure to leave that door open for them to return. This may sound ridiculous, since the last thing on your mind right now is ever seeing this person in your office again.

Yet your corporate life is very long, and it extends down many roads. The gal that just walked out of your office today may be the key customer that hires you a few years from now. It may be the person that was a bad fit in the formative stages of your company but is exactly who you need three years from now. It never pays to be short-sighted when winding up any relationship, no matter how tenuous at the time.

Leaving the door open also shows a gesture of good faith. If people know that they might have to deal with each other again in the future they’re a lot less likely to spew fire and brimstone today. You may find that a few years from now, after you’ve both forgotten a about what brought you to this departure, that there’s a much better opportunity to re-connect.

Send People off with Dignity

There’s a big difference between just terminating someone and terminating someone with dignity. No matter what the situation is, everyone deserves to be shown the door without being crucified in front of their peers.

Aside from the fundamental respect of another human being, you’re also setting an example for how you will treat the rest of the organization. If all of your employees watch a person get humiliated in front of their peers the first thing that you’ve instilled in everyone else is that they will be treated the same way. That kind of fear is incredibly unhealthy in any organization. (Unless you are a pirate, in which case you’ll probably be just fine.)

Instead, go out of your way to make sure that this person’s departure ends on a positive and supportive note. Even if the rest of the organization dreaded their existence, it’s important for you to be the bigger person and show that everyone will come and go with dignity at your company.

Think About the Ripple Effect

A departure affects more than just one employee. It creates a ripple effect through the entire organization that’s impossible to ignore. If you think that an employee walking out the door takes their drama with them, you’re dead wrong.

The gory details of what you’ve said, how the employee responded, and every moment thereafter will be repeated in infinite detail inside and outside of your organization. Think of the termination event like a video clip on YouTube that is about to get re-broadcast endlessly.

A simple, positive parting isn’t worth gossiping about. There’s no story. But an ugly and bitter battle is something that will keep lots of people talking for a long time, all at your expense. When it comes to parting, creating as little drama as possible is absolutely critical.

Look at the Big Picture

Every time you let someone go you’re changing the face of the company and setting the tone by which it treats its people. If you can use this opportunity to show that you’re supportive and respectful of the people leaving your company, you’ll make both the people that work there now and the people that will work for you in the future far more comfortable with living in your world.

How to Easily Evaluate your Startup Idea

Wed, 11 Jun 2008 10:00:00 GMT

After you listen to about a hundred startup company pitches you start to notice that they all sink or swim on just a few basic points. Given enough time, you don’t even need to know what the product is. Instead you just start asking whether or not the entrepreneur has the right answer to a handful of questions that validate just about any startup idea.

This isn’t about having a sixth sense about the success or failure of a potential business idea. No one has that, not even the investors sitting across from you pretending like they do. This is about boiling your startup idea down to the few principles that make all the difference in the world. So here they are, in order of importance.

The Problem / Solution Issue

Every great business idea comes down to a solution to a problem. As entrepreneurial visionaries, we sometimes get enamored with our solution at the expense of having a real problem to solve. If you’ve ever wondered what a solution looks like without a problem, just take a look at anything being sold in a Sharper Image catalogue.

The value of a good product idea is proportionate to the size of the problem it solves. For example, if I tell you I have the cure to cancer I don’t even have to tell you what the product is. You inherently know what a massive problem cancer is, so certainly any solution I have must be somewhat interesting.

When you can communicate the severity of the problem to investors, and they nod their head and say “yeah, that’s a huge problem, I get it” then you’ve got an interesting business idea.

When you can communicate that same problem and back up it up with a solution that consumers respond to with “here’s my check” then you’ve actually got a business!

The Sales and Marketing Strategy

Although you may have the solution/problem thing licked, it means nothing without knowing how to bring a customer in the door. Anyone telling you that a product will sell itself should try walking into a grocery store after it’s closed. I guarantee when you don’t bring people through the door, the products don’t sell themselves!

That’s why a powerful sales and marketing plan can be even more critical to your business than an initial revenue model. Don’t get me wrong, you can’t sustain your business forever without revenue. But I’m 100% sure that without any customers you’ll never have to worry about your revenue model.

You don’t have to have a ten year plan for every type of media you will buy and sales pitch you will perform. You just need to have a basic explanation for how you can cost effectively find customers over the next year or two. Your plan might stink, but not having one is a huge red flag.

Revenue Model

There are many conflicting schools of thought on what it means to have a revenue model for your business. Some people will say that with enough customers you can eventually make the numbers work. Others will say that if you grow quickly enough you can get acquired long before you ever have to worry about making money.

Both schools are rarely right, and the exceptions only prove that there are exceptions. “We’re going to sell to Google” isn’t a revenue model any more than “I’m going to win the Powerball Lottery” is a full-time career move.

Your revenue model should be simple – someone is willing to pay for what you offer. Whether they pay for it indirectly through advertising or directly through a purchase, there has to be a sustainable and readily identifiable revenue model.

More importantly, it has to be a profit model. I can sell dollar bills for 99 cents and generate tons of revenue, but will certainly guarantee that the company will go bankrupt. The only companies allowed to exist without a profit model are charities and major airlines.

If you Figure all that out, Let’s Take a Look at the Product

The last order of business, which may sound bizarre, is the Product Plan itself. That’s because if the product doesn’t solve a customer’s problem that you can make money on, it just doesn’t matter what the product is.

In many cases you can test the market for your product against the three previous points by simply doing some basic research. Long before you actually build a product, you can ask customers if they’d buy it. You can start to figure out how difficult and costly it might be to acquire more of them. You can also get a sense for what you could sell your product for and get a basic understanding of whether you could do it profitably.

When you’ve got answers to all of these questions, then, and only then, it’s time to go build a company. Until, then, keeping asking questions.

BrassTacks – A Raw view of Business Planning

Tue, 03 Jun 2008 09:41:32 GMT

Here at Go BIG, we read a ton of blogs. Every once and a while you need a blog that breaks the typical news and advice clutter. BrassTacks @ BusinessPlan.com is a new blog that does just that by providing a real and raw view of business planning and business building issues.

The BrassTacks main blogger, Brittany Schaeffer, continually provides fun and edgy articles that helps digest industry news and events. Stories like “Web 2.0 Doesn’t Make Money. VC’s Keep Funding”, looks at the continual funding of valley startups that don’t have revenue models. Very true.
BusinessPlan.com also provides a startup resources tab with sources for business planning, funding and incorporation services. Because you have to get work done eventually.

BrassTacks hosts a quarterly executive summary competition for entrepreneurs. The best summary will win $10,000 in start-up capital. All they want to see is the executive summary, no need to wade through the whole plan.

Dump that Web Site and Just Build a Blog!

Wed, 28 May 2008 10:00:00 GMT

Dump that Web Site and Just Build a Blog!

What’s the fastest way to get your Web startup launched without having to raise capital, hire programmers and spend countless hours developing a Web site?

Do it yourself with a blog.

Why a Blog?

When most people think about blogging, they conjure an image of someone’s personal Web diary or a site bubbling with celebrity gossip.

But blog software has much greater potential,from selling a product to building an entire community. Sure, you could use a blog to give a long-winded report on your last vacation, but you can just as easily (and more effectively) harness its power to keep customers updated on your offerings.

A Web site is most valuable when you can to get it up and running quickly and edit the content on the fly. A blog facilitates this for you by having all of the design templates, content editing, and publishing features built-in.

Simple tools like Blogger.com or TypePad.com will allow you to setup a basic site with a good looking template, and even your own unique URL, for less than $10 per month. They take the site design, programming and hosting issues right off the table in one swoop.

Learn to Fail Faster

Launching a blog quickly also allows your idea to fail a lot faster. You see, your Web business isn't going to fail because you didn't raise enough capital or you didn't design a sweet enough set of buttons. It's going to fail because you don't know how to get customers to show up to your site or because your product just isn’t that amazing.

The inherent speed of launching a blog brings you closer to the point of potential failure, and that’s a good thing.

You want to quickly find out whether your idea is getting traction. The sooner you are in-market and getting customer response, the sooner you can either bet the farm on growth or pack it up and move on to the next idea.

You may find that your initial approach to the market was flawed, which is often the case. Creating a blog allows you to quickly evolve your concept so that when you do go to build a full Web site, you’ve got a better idea of how to spend your time and capital.

Master Web Marketing

After you get your product on the Web, mastering the art of attracting traffic is extremely important. There’s very little difference between marketing a blog and marketing a full blown Web site. Frankly if you can’t figure out how to get traffic to a simple blog, your Web company will have much bigger problems!

The Web is a big place these days with over a billion people on-line. It used to be the case that you could simply make a mark by being the one company in your industry that had a Web site. Now a website is compulsory and marketing them competitively is the greatest challenge.

Removing the build phase of your Web site by focusing on your blog will free your time to learn how to optimize your content for search engines, build effective cost per click campaigns, and leverage the various social networks to get your word out there. You’ll need every waking moment to figure this stuff out and orchestrate your campaigns. Having a hassle free site will be a huge blessing.

Total Content Control

Which brings us to the next point – easily editing your own content.

Your Web site isn’t a single static document that you build once and forget about. You’ll need to change your offers and messaging constantly to hook new customers and respond to existing ones. It would be nearly impossible to write effective copy for an entire site on your first attempt and never have to change it again.

This is where the beauty of blog publishing shines through. A blog is ultimately a word processor with a few extra features, so editing content and making site changes are easy. If you need to create three different versions of a product sale page to test different messages, no problem. You can and should take advantage of easy changes to adjust your product strategy as your learn about your customer.

An Ongoing Pilot Program

The days of front-end investment in a product that never changes are over.

The Web enables, and requires, that innovation is iterated for a demanding, changing and hopefully growing audience of consumers. Eventually your brilliant idea will probably outgrow your modest little blog and explode into the next Amazon or YouTube.

If you can come to terms with the fact that your idea isn’t a business until you’ve tested it in front of enough customers to prove the business case, then the concept of using a flexible tool to build from should make a lot of sense.

Wils Interview on The American Entrepreneur

Thu, 22 May 2008 09:52:36 GMT

Wil was recently interviewed By Ron Morris of The American Entrepreneur. The interview provides Wil's advice on how to market your service and yourself, connecting with industry experts and addressing pricing questions.

Listen to the entire interview with Wil.

Wils New Forbes Article - How To Lower Your Legal Bills

Wed, 21 May 2008 10:39:44 GMT

Wil has written a new article in Forbes that explains how to lower your legal bills when starting a new company.

"The most common legal expenses start-ups incur are associated with the process of incorporation. In the past, this often required either navigating a bunch of state or federal forms--or hiring an attorney to do it for you. These days, the entire process can be done online in less than an hour, for an average of $200 (before filing fees)."

Read the Full article - How To Lower Your Legal Bills

Your Idea Alone has no Value

Wed, 14 May 2008 10:00:00 GMT

Your Idea Alone has no Value

Contrary to popular belief, great companies are not borne from great ideas alone. We'd all love to think that if we could simply invent the next Post-It note, we could sit back and watch the cash tumble in.

But if great ideas don't spawn great companies, what does?

The short answer is: you. The longer and far more complicated answer is how you specifically position yourself and your company to execute on an idea. Anyone who overhears your idea, has the same idea at the same time, or basically plans on doing anything similar, is already on the same playing field as you are.

In order to differentiate yourself and your idea, you don’t need a patent or some proprietary method. You need a focused plan that allows you to execute above and beyond your competition every day of the week.

Think of your competition like your favorite professional sports league. There are dozens of teams which have talented players on them, but only one team that is going to perform better than everyone else. Your goal is to build that team.

Focus on Execution

There is a massive chasm between having a great idea and executing flawlessly on a business model for a great idea. Lots of people have great ideas, but very few people ever execute well on them.

Execution isn’t just about showing up for work every day and punching a clock. For the team that wins, execution is about going above and beyond the call of duty each and every day.

It’s about reaching out to your customer when there are no problems just to see how they are doing. It’s about releasing a product feature faster than your competitor even when you’re already ahead. It’s being the first car in the parking lot in the morning and the last one to leave at night. It’s doing what the guy next to you isn’t willing to do.

Service the Heck out of your Customer

Even a product that’s a total commodity, like food, can take on a whole new meaning when you compare the service that comes with it. In your city there may be a hundred places where you can order a filet mignon, but only a handful that are considered top notch.

The difference is that the top restaurants understand that in order to differentiate their product, they need to rely on better service. They pay attention to every detail of your experience, from the greeting you get at the host stand to whether you’re given a white or black napkin based on your pant color.

Exceptional service is by no means a commodity. It’s a rare and unusual thing that very few companies can deliver. Chances are your competition isn’t going to go the extra mile to service the heck out of your customer, which creates an incredibly powerful competitive advantage for you.

Find the Weak Spot

It’s not uncommon for a startup company to go toe-to-toe with a much larger company offering a very similar product. On its face, it looks like the startup is at a severe disadvantage. Surely the behemoth megacorp can provide better execution and better service with its vast resources than a scrappy little startup can.

If you were to try to compete against the behemoth on their own terms you’d get crushed. That’s why startups tend to look for the weak spots in larger companies and exploit them. You can easily differentiate your product from a larger company by focusing on stuff large companies mess up all the time.

Unlike a large company, you can offer the personal service and attention your customers love and probably are missing from your bigger competitor. You can leverage your speed by releasing new versions of your product faster and responding to market conditions more quickly. You can offer talented managers founder’s stock while a big company can only offer another bonus plan.

Every weak spot that you can exploit is another way to add value to your idea. Once you’ve identified the points, the more pressure you put on those weak spots, the more value you’ll build for your own product.

Tying it Together

Outmaneuvering your competition isn’t about doing any one of these things – it’s about doing all of them consistently. If your idea is great and novel, the only guarantee is that it will be copied. If it’s not, you have to wonder how great of an idea it really is.

When your idea does get copied, the only thing you’ll be able to rely on is your team and your execution. All of the points about going above and beyond the call of duty, servicing your customer, and exploiting the weak spots will soon be used against you.

The only defense against the next up and comer and the only way to consistently create value around your idea is to stick to fundamental execution. Nothing else has value.

Wil Discusses Initiative with Jim Canterucci (Part 4 of 4)

Wed, 07 May 2008 08:17:00 GMT

Jim of MyPersonalBrilliance.com interviews Wil about the Initiative to start a new company. Jim and Wil discuss sustainability, the role of discipline and not confusing great companies with great ideas. You can listen to the forth and last interview with Wil here.

Wil Discusses Focus with Jim Canterucci (Part 3 of 4)

Mon, 05 May 2008 14:39:23 GMT

Jim of MyPersonalBrilliance.com interviews Wil about the Focus needed when launching a startup. Wil discusses why reacting to trends, understanding the little details and when to bring in help is best for your business. You can listen to the third interview with Wil here.

Wil Discusses Ideas and Solutions with Jim Canterucci (Part 2 of 4)

Thu, 01 May 2008 08:00:00 GMT

In this episode, Wil discusses with Jim of MyPersonalBrilliance.com his formula to create an innovate company. Wil also explains how questioning your business decisions and the answers can guide entrepreneurs to a better company. You can listen to the second interview with Wil here.

Your Equity Isn’t a Payment, it’s an IOU

Wed, 30 Apr 2008 07:00:00 GMT

Hello there young entrepreneur, I’m your investor. Remember me?

I’m the guy that sat in front of your heartfelt and emotional presentation to raise capital for your business. I listened closely to your entire plan, and made a few comments about what I didn’t think would work. You of course ignored my comments and assured me that with the right amount of my money, you’d be able to solve all of your problems.

I wrote you a check, you spent the money, and those problems haven’t gone away.

So aside from all of your promises of future riches, you haven’t paid me back. And, you know, the reason I wrote you that check was to create more money than I started with, which hasn’t happened.

You see – giving me equity in your company wasn’t a payment, it was an I.O.U.

Your Currency is Worthless

Giving up that equity may have felt like a payment. You may have felt like what you were giving up was an actual asset that had real value. We signed agreements and created a currency that was backed by your promises and intentions. I swapped my currency for yours. Now yours is losing its value - fast.

You may have thought those promises you made were going to be forgotten about or displaced by other promises. In fact they weren’t. Unlike the currency I gave you, I couldn’t spend your promises to hire my friends, find a fancy office or buy everyone new laptops. But you did.

Now I’m stuck holding the bag with the useless currency you gave me while you’re out trying to print new currency with even more promises. I’m sorry, I’m not buying it.

Remember these Guys?

Perhaps you may have forgotten about our arrangement, but maybe you’ll remember these guys – your employees. What? You don’t? Allow me to jog your memory.

You may recall an evening over more than a few beers when you convinced them to quit their existing jobs to go work for you. You told them that even though they would be giving up a steady income with an existing company, the money they would make from the stock options you gave them would far outweigh the risks.

They went back to their families and took your sales story with them. They convinced themselves and their loved ones that the opportunity you had for them was real. Soon thereafter they were missing family dinners, soccer games, and any time they ever had with their friends. They were pretty confident that you’d make good on that little I.O.U. you created after that last beer.

Just like me, they seem to be wondering what happened to all of those promises. They’re wondering how you expected to pay them back for all of the investments they have made in you. By now they’ve figured out that no return is going to pay them back for the time they’ve lost with their friends and family, but they sure would like to think a payout might help them create some more time in the future.

We’re Not Done Here

Maybe somewhere along the line you forgot the basic mechanics of an exchange, so let me re-educate you. When I hand you something of value, in order for the exchange to be equitable, you need to hand me something back something of equal or greater value. Unless we finish the exchange, which involves you giving me something of value, we’re not done here.

In fact, unless you give me something back at all, it’s not even an exchange. It’s probably not theft but it’s certainly not charity, and I’m not feeling like Santa Claus right now, so it ain’t a gift, that’s for sure.

In order for us to complete this transaction, and in order for you to make all of your debts right, I need you to fulfill your promises. I need you to dig down and find all of the energy, enthusiasm and focus you had when you accepted my check and think about getting that money back.

You’re not Alone

Although times are tough and you’re feeling the pressure, you may feel like you’re the one with everything to lose. Truthfully though, you’re not alone. You may be the most visible person in this transaction, but if you quit on us, we all lose.

It took all of us to start the exchange and write that IOU, and it’s going to take every one of us – your investors, your employees and even your customers – to make good on your big promise to us.

We realize that you need us as much as we need you, so we’re here to support you in any way you need us to. We just ask that you don’t forget about us, because we can absolutely assure you – we won’t forget about you.

Wil Discusses Success with Jim Canterucci (Part 1 of 4)

Tue, 29 Apr 2008 08:00:00 GMT

Wil Schroter discusses with Jim Canterucci of MyPersonalBrilliance.com his definition of success and the difficulties of evaluating the market for your idea. Wil also explains how to build a strong team for your venture, being aware of your weaknesses and how to best use GoBIG as a resource. You can listen to the interview with Wil here.

Not all Employee Attrition is a Bad Thing

Mon, 07 Apr 2008 15:15:43 GMT

Sooner or later, no matter how sweet your new startup company is, someone is going to hand in their resignation. It could be the gal you’ve been working with since the day you founded the company, or the person you hired last week. Regardless, the thought of losing people may sound like a bad thing – but in fact it’s not.

Not all employee attrition is a bad thing. I’m not talking about sitting around your conference room like Dr. Evil and eliminating anyone that doesn’t please you today. I’m talking about embracing the benefits of attrition, whether initiated by you or someone else, to breathe some new life into the organization.

Not Intended for Everyone

Let’s face it – most people aren’t cut out to be in a startup environment to begin with. While the idea of creating some wonderful company out of nothing may sound great, the reality is not so romantic. Even the fastest growing startups take many grueling years to build, and the long hours can go from nominal to normal in no time at all.

A lot of people can handle the breakneck pace and constant change for a few months, maybe a year. In comparison to their big corporate jobs it may sound like a nice change of pace. But eventually they realize that chaos isn’t a momentary period of a startup’s life, it is the startup’s life.

When this happens, people become increasingly uncomfortable with their environment. Soon they long for the predictable life they had in their corporate jobs, which, if they want to do you a big favor, is exactly what they’ll go back to.

A startup needs all hands on deck at all times, and it needs them all focused on the same goal. If one of your people is thinking about taking it easy back in the warm embrace of “big corporate,” let them go. In fact, encourage them to go. All they are going to do is slow you down by sticking around.

Purging the Bad Blood

Some of your team members may have been around during a particularly dark period of your evolution, like the time when you didn’t make payroll for nearly a month. Once you’ve shattered the confidence of your team it’s very hard to ever bring that confidence back. The lingering emotions are a debt that’s often too high to repay, which means you’re better off parting company.

The beauty of bringing on new staff at a positive time in your growth is that they don’t have the baggage of your youth. It’s like moving to a new city where people only know you for what they like about you, not the mistakes you’ve made in the past.

If you’ve suffered through a particularly long and terrible spell of misery, your best bet may be to create a new, healthy situation by recruiting some fresh faces. Let your disgruntled team members find a new environment where they can thrive, without having to dwell on the problems of the past that should be history anyhow.

Shedding your Skin

As the organization grows, you may also find that the people that made a lot of sense for one point in your growth no longer make as much sense. The guy that was the CFO three years ago (because he was the only person who took an account class in college) may now be sitting three layers deep in the organization in the billing department. The company grew, but he didn’t.

Not everyone is going to keep evolving their skills and capabilities as quickly as the company can grow, and for that, you need some attrition. These team members need to find a place where they can use what they can leverage what they’ve learned in a new company versus losing ground in yours.

Keep Reloading

Change is a tough thing to go through, whether it’s forced by your employees or by you. Finding people is always tough, and the holes people leave by walking out of the company create problems for everyone. But they are problems that need to exist in order for your company to truly evolve.

You can view attrition in two ways – as either a horror that you’ll try to avoid, or an opportunity to evolve the organization once again. If you’re constantly looking for new ways to re-energize the company, finding new talent could be a great way to keep things fresh.

Think of your company like a championship football team. Over time some of your recruits will become all-star players while others will never live up to their potential. Unless you’re constantly reloading the bench with fresh talent that’s excited to be in the game, your team is going to get old and tired. And those are two things a startup can never afford to become.

What Startups Don’t Need to Spend Money On

Tue, 11 Mar 2008 10:43:21 GMT

I’m not proud to admit it, but I’ve made some dumb business purchases during my career and now I’m ready to come clean. Here are a few that come to mind that are particularly relevant to startups and were either committed by myself or other startups that I’ve known over the years.

Office Space

Go Virtual. Why? Because it is easy and it’s cheap.

Staff no longer need to be in the same building to be productive. Furthermore, you don’t need a building for phones, conference rooms, or a place to escape to from your home office. There are plenty of virtual phone services, plenty of executive suites that allow you to rent conference room time, and plenty of coffee shops with Internet connectivity to escape to.

I made the mistake of office space on several occasions only to find no client meetings ever took place, rarely were staff in at the same time to even think about collaboration, and worst of all was the additional line item expense labeled Rent that haunted me every month until the lease was up.

Accounting/Bookkeeping Services

Don’t hire someone to do your books. You need to be in the numbers every day in order to stay on top of the business and the never ending twists and turns that come with running small business or startup. If you can’t handle the books, you shouldn’t be starting a business. They just aren’t that complicated to maintain.

Swag

Don’t you dare buy a t-shirt or a pen with your company logo on them! And if you do, don’t think it is a marketing tactic because I guarantee the pens will end up in a drawer at home and the t-shirt on one of your kids after the cheap thing gets shrunk in the wash. I highly doubt your target audience is a bunch of Kindergarteners so it won’t buy you much exposure.

Back in 2001 I was involved in a startup in which we secured funding to support business development activities that would ultimately bring together a large network of realtors. While my brain kept telling me that a good strategy and business case would be the lynchpin of our success, my youthfulness stumbled across the world of on demand custom printing. Within a few weeks of securing the biz dev funds, we purchased pens, pads for note taking, and a few other things I thought were just cool (err “useless”). In the end, most of the stuff never made it to the meeting, nor did it make a difference. In fact, I still stumble across some of it at home in boxes or desk drawers.

Software/IT Systems

Unless you are a specialized business that requires specialized software/systems, I’d argue you can do most of what you need to do with a word processing program, a spreadsheet, and some accounting software (remember, you’re doing the books!).

I once made the mistake of purchasing some online collaboration software because I felt like we weren’t communicating well enough. Six months later (and 6 monthly payments later) I was the only one that ever logged into the system more than 2 or 3 times.

Software and IT Systems won’t be the lynchpin to your success or failure so just forget about them when getting started.

What should you spend your money on as a startup?

While the situation is different for every company, there are a few common expenditures that are worth making in the startup world. Maybe I’ll cover those in another post as to not drag this one out any longer. Anyway, in the end what you don’t spend (waste) money on is much more important.

The Seven Laws of User Interface (UI) Design

Mon, 10 Mar 2008 10:39:00 GMT

Although it’s not common knowledge, there is a list of Laws to Interface Design (which is credited to Jef Raskin, the author of The Human Interface). Most of us designers and developers “play it by ear” but end up forgetting a lot of these things (or just downright taking them for granted).

Interface Design is more practically used when developing any type of application since that is the time when users will spend most of their interaction. Websites can take on most of these laws, although I would argue that this list holds a lot more importance for startups that are building products, particularly web applications.

You can also use these laws to “fine tune” your applications at any point in their development. Most startups will rapidly prototype and push their alpha and beta versions, which are just as good a time as any to implement these strategies (in fact, it may cause your early adopters to appreciate your apps even more if you do).

Visibility – How clear are you being with the user? What is the goal expected of the user? Are icons being used to portray this? The underlying psychology shows that icons become very important for repetitive tasks when many choices are available. Give clear icons and a clear path to portray what the user should be doing.
Feedback – Are you sending information back to the user after a certain action is performed? What type of feedback is given when a user does something right, or wrong? Does a sound play? Is there a visual cue (ie graphical or textbox) that will indicate, and if so, does it suggest an alternative for the user?
Affordance – Are particular elements clear and obvious to the user? Do you clearly define what something does for the user? A great example: you’re going to the movie theaters, and you have no idea whether the door is supposed to be pulled or pushed. Half of the time you push it, look like an idiot, and realize that you’re supposed to pull. Affordance would mean putting a “Push” sign on the doors. Don’t get fancy or creative, just design for the lowest common denominator (think kids).
Simplicity – Are you keeping it simple, stupid? Are you adhering to the old high school KISS rule? A classic example in desktop applications is to put an “Open File” option on a menu, underneath the “File” tag. Nothing complicated, nothing fancy, nothing overly created or overanalyzed. Keep it deadly simple.
Structure – Are you organizing the information in a way that makes sense to the user? Is your information cluttered or is it grouped into sensible and related chunks? Include all similar information within a dialogue box, separate from other distinguishable groups of information.
Consistency – Do you have a uniform and constant theme to your product? Are the elements positioned thoughtfully? You will see an X in the top right corner of this screen, don’t get fancy and try to put it in the bottom left because you want to be “different.” That’s just being confusing. If there is already a popular way of positioning something, try to follow it so that your software is easy to pickup and doesn’t create any unnecessary tension on the user.
Tolerance – Are you proactively trying to prevent users from making errors? Are you giving them an easy way out if they do? See #2. Hide options that aren’t appropriate in a certain context, and don’t give more information to the user than is absolutely necessary at any point in time (although provide a means to get access to it).

What if every Entrepreneur had to tell the Truth?

Wed, 05 Mar 2008 09:00:00 GMT

In the movie Liar Liar, Jim Carrey plays attorney Fletcher Reede, who’s been cursed with the inability to lie. Every attempt Fletcher makes to lie results in him blurting out the God’s honest truth instead.
Imagine what would happen if an entrepreneur were cursed with the same affliction. What would their pitch really look like?

The Sales Pitch

“Hello, I’m Wil Schroter, and thank you for being the only client that was willing to return my phone call. I’ve borrowed my roommate’s car to get here and you’ll probably notice that while it’s the middle of August, I’m wearing a 3 piece wool suit that I bought for a $1 from a thrift store yesterday.

Since this is the first time a real customer has ever looked at my product, I’d like to pitch you on every last idea we’ve ever had for the product, hoping that one of these ideas is something you’re potentially looking to purchase today.

Unlike pitches I’ve given for previous employers that simply meant a bigger commission in my regular paycheck, this time I’ll be pitching for the money that pulls me out of a mountain of debt. In many ways, your reaction to this pitch will determine whether or not I can pay my rent next month, so I certainly hope you like it.

The Product

You may not realize from my fancy PowerPoint presentation that the wonderful product I’m presenting is nowhere near completion. In fact, there has been more product development done in Adobe Photoshop to make these slides look legitimate than on the actual product itself.

Regardless, I’m hoping you share my excitement about the potential of this product, despite the lack of any tangible value that I could deliver today. The beauty of an intangible, undeliverable product is that I can not only make it into anything you desire, I can also sell it to you for any budget you’re willing to pay.

Don’t bother holding your questions to the end of this presentation, because I can already tell you the answer – it’s “yes.” Wondering if the product is effective? Yes. Can we deliver upon your made up timeline? Yes. Are we the best possible vendor for a product that hasn’t even been proven? Well, yes, we are.

The Company

Of course you’ll want some background on our startup company, so let me fill you in on the details.

The company was founded when I realized I could make more money competing against my last employer than working for them. I am taking advantage of this opportunity by draining all of my personal savings, selling every possession I have, and giving my friends and family basic “visiting hours” by which to contact me.

We’re currently in discussions with some very large venture capital firms about investment. So far our discussions have gone so far as to say “who is the person I would speak with to send in our business plan?” and we’re anxiously awaiting their responses.

In addition, we’ve lined up key partnerships with major companies like AT&T (when we signed up for our cell phone), American Express (when we got our credit card), and Dell computer (when we used our Amex to buy a laptop). These vendors are very excited about getting in on the ground floor of our startup company.

The Team

The Team I’ve assembled has an incredible amount of experience in just about everything but starting a company. The man standing beside me is not only our CFO, but is also my cousin-in-law who actually works at H&R block as a tax prep counselor and is on his lunch break for this meeting as a stand-in.

We (and by “we” I mean “I”) have attracted top notch players to our company, especially our all-star Board. You’ll recognize many of the names on our Advisory Board, even if the people on the Board wouldn’t ever recognize ours.

The Close

In closing, I’d like to beg for you to part with even a nickel so we can land our first customer. You’d be shocked and appalled if you knew how little we really had to deliver on a completely underfunded and unstaffed product idea. We hope you’ll look past that to do business with us.

We’re so passionate about what we want to accomplish that we’re completely unaware of what we’re committing to. We’re told that’s what being an entrepreneur is all about, and we assume only other entrepreneurs could be that clueless.

Despite the fact that our whole presentation today is a joke, if you even hint that you’ll work with us, we’re going to be incredibly relieved. We’re going to spend every waking hour from this point forward cow towing to your every whim because frankly, we have no other choice.

We want to be open and fair about how excited we are about this opportunity. Let’s face it – honesty is the best policy, right?”

What makes an Entrepreneur?

Tue, 04 Mar 2008 09:34:02 GMT

A question many have tried to answer through a series of books. A question that many have assumed to which they know the answer. A question that may not have a direct answer. It poses threats to true believers, and most would ignore it. What makes an Entrepreneur?

I do not want to try to answer this question. But would like to reflect on it, in hopes to push you to reflect on any assumptions you may have.

Entrepreneurs "are people who imagine things as they might be, not as they are, and have the drive to change the world." - Anita Roddick, Financial Times

An Entrepreneur "turns he most trivial condition into an exceptional opportunity. The Entrepreneur is the visionary in us. The dreamer... The imagination that sparks the fire of the future. The catalyst for change." - Michael Gerber, The E-Myth Revisited

Many would suggest that an Entrepreneur is a person who loves change and creation of the new. Some would suggest, and myself included, that a true Entrepreneur works on his business, not in it. An Entrepreneur doesn't need to be a part of their own system for the business to run profitably. But there is a gentle slap in the face when one assumes this. There are those that create, make new things, create new brands, change the world and consumer perception but need to be in the business for it to function. This is most apparent in the Entertainment industry.

Some entertainers have created a whole new brand in their field, like Sacha Baron Cohen (Borat), Jay-Z, and Dane Cook. Borat is a new humor unlike that previously viewed in American mainstream comedy. Jay-Z changed the face of Hip-Hop along with many other rap artists; Biggie Smalls, 2-Pac, and Ludacris. Dane Cook has developed a new hard-hitting animated comedy sketch. His recent tour is designed unlike any I've seen before and he has even created an emblem for himself.

These people have created brands, changed the way consumers perceived the market. They can quickly adapt to consumer wants, and develop new products. However, without them in the biz, their brands would not exist. Does this mean they’re not Entrepreneurs? Does this mean they can't share the space of Michael Gerber, Steve Jobs, and Bill Gates? What about Oprah? She's the first African American Billionaire. But if she disappeared tomorrow, would her brand disappear with her? With Oprah gone, how long would O-Magazine Last? The above mentioned have created brands outside themselves. Jay-Z made a majority of his money outside of music, but he also created Roc-a-fella Records. Ludacris created Disturbing Tha Peace, a record label of his own. Is this the act of an Entrepreneur, or simply an entrepreneurial act?

A friend of mine, Marshall Beck, is an entertainer in the metal community of Arizona, is well known by many and even ridiculed by the press. He can tell you it’s a rough business, and without quick adaptability and creativity of new revenues streams you can go down quick. He claims (and I support him) that entertainers definitely have to be entrepreneurial. Otherwise they wouldn't succeed.

So I leave it up to you to decide. We all have an Entrepreneur inside us... But are only the true Entrepreneurs those who do not work in their systems? Can we consider entertainers and those that need to be in the biz Entrepreneurs or simply entrepreneurial?

Merlin Ward is a young social entrepreneur and co-founder of Club E Network, a Broadband TV & Social Network for entrepreneurs. Club E provides original television programming and resources for entrepreneurs and connects business owners around the world through its online community and on the ground chapters.

Marketing like PayPal and YouTube

Mon, 03 Mar 2008 09:29:00 GMT

The year is 1957. James Vicary has the entire advertising world convinced that he has successfully demonstrated a technique that would enable advertisers to allow them to control anything consumers do. He claims that he has broken the code of subliminal messages by placing them in motion pictures, bringing in audiences, and recording the results. His claims showed that the embedded messages of "Eat Popcorn" and "Drink Coca-Cola" increased the sales of popcorn by 57.5% and Coca-Cola by 18.1%. He holds a press conference, taking retainer fees (an up-front deposit) from advertising agencies. Shortly after, he packs up, leaves town, and disappears, never to be seen or heard from again. He beat the reporters and was gone before the story even surfaced. He left no trace; no bank accounts, no forwarding address, and he also left with $4.5 million (equivalent to $22.5 million today) in both advertising agency and client money. Wherever you are, Jim, you've pulled off the largest scam in advertising history.

There's a lot of history in advertising, and deception is one of the biggest issues. You can trace most of the negativity towards advertising back to The Great Depression. It's not to say that advertising is a bad profession (it actually used to be an elitist profession), but there's a lot of distrust towards advertisers and claims that can't be backed up. That may affect us as entrepreneurs, even to the point where we may resist using many forms of advertising and marketing in our startups.

I think a lot of us would say that most of today’s startups were created without a penny put into advertising or marketing. I love the examples of YouTube and PayPal because they were started by alumni of the university that I attend, and I’ve had the opportunity to chat with both of the founders from these companies. I have also spent some time looking at YouTube and PayPal’s marketing strategies and found them to be great examples of models for explosive growth. It’s easy to look at the successful companies today and say “Yeah, they didn’t do any advertising. They just had the right thing at the right time at the right place.” But I think these companies deserve a lot more credit than that. First, let’s dispel the myth that YouTube and PayPal paid little attention to their marketing tactics.

YouTube was started by giving away an iPod every day, for several months. I don’t remember this happening because I was a “late adopter” and found out about YouTube from another friend that found a particular video funny; he sent me a link through an IM program. That’s kind of cool how it works though: people could video tape their iPods that came through the mail, and then upload it to YouTube, for other people to watch. YouTube didn’t just tune in on marketing though. They also placed a lot of importance on product development and rapid iteration.

My current stance on marketing vs. product development is that you can’t exist without the two. I would argue that product development and marketing are the two things that will launch any startup with a valuable concept into explosive growth. Of course, no method of advertising, no matter how great it is, will ever completely be responsible for sustained growth over long periods of time. Advertisers would probably argue that YouTube and PayPal never technically “advertised,” because the definition is strictly defined as a “massive, paid attempts to persuade an audience to buy or do something.” Either way, they had to spend a little to make a little.

PayPal is another good example, and it was another startup I wrote off as “one that didn’t pay any attention to marketing.” PayPal originally offered $10 to each member that signed up, and $10 for referring a friend. I remember signing up, but I forgot that I was actually paid $20 when I first jumped on board. I remember not being interested, and the thing that sealed the deal for me was getting the $20. A lot of PayPal’s early stage funding was spent on making PayPal's growth explosive, and offering incentives to sign up is just as good a reason as anything else. It also helped that PayPal was backed by Ebay, which was a substantial boost to their growth as well.

If you walk away with anything, you should realize that product development and marketing is becoming a huge barrier to entry for competing startups. If you can build a great product that finds its way in front of a large audience, you’re set. If you want to be #1, don't be afraid to use different forms of advertising (whether you or your own users are doing it) and spend money, just don't do it carelessly. Don't let your negative views on advertising affect your decisions to promote your startup effectively--at the end of the day, there are many methods of marketing and advertising that still work very well.

You Don't Need to HAVE a Product to SELL a Product

Thu, 21 Feb 2008 05:27:48 GMT

Ahh, the old "Chicken and Egg" sales conundrum. An entrepreneur cries about not having capital to build their product, and thus having no idea whether a customer would buy that product to begin with.

"How do I close a sale on my product when I don't have a product to sell yet?"

The typical logic goes that once an investor ponies up the dough to build the product, the entrepreneur will then go out and make the sale. While it would be nice if we could all build the perfect product and have the customer fall at our feet to buy it, that's just not the case.

Entrepreneurs need to sell first, and build product later.

Selling a product before it's produced isn't about selling swampland or vaporware. I'm not suggesting that you lie to customers and tell them to pay for something that you can't deliver upon - that's just dishonest.

Instead I'm talking about presenting your product concept in a way the demonstrates all of its benefits without actually having the final product in place. You buy products like this all the time whether you realize it or not.

When a home builder shows you the architect's rendering of your house, it's not built yet, but you understand the concept enough to take out an enormous personal loan to buy it. When a Web developer quotes you on a big web development project that he's going to build for you, you don't have the Web site built, but you agree to pay for it anyway.

The difference between having a product to sell and just selling swampland is your ability to deliver on your promises.

Therefore your first step in selling your product is having some basic demonstration of the product or at the very least the product concept. This doesn't have to be the all and final "go to market" version. In fact, if you've never shown it to a customer before, the likelihood that it will be everything they ever wanted without seeing it is probably pretty low.

It's OK to show a product to a customer that isn't full refined, as long as you have the ability to educate the customer on its overall potential.

Use your demo not just to get a customer interested, but to get a customer's feedback and learn how to make them more interested. When I talk to entrepreneurs about their new ideas, I always ask them how customers have reacted. When they tell me they have never presented to a customer or tried to "pre sell" the product, I get really nervous. You desperately need customer feedback, both good and bad, before you fully develop any product.

Don't think of the sale as only "when a customer writes a check." Granted it's the most important part of the sale, but getting a customer to say "Yes, I'd buy it" even before cash has been exchanged, is still very important.

I'm a big fan of sell first, build later. I think entrepreneurs need to fully understand not only the customer and the product, but the full effect of the sales cycle before they can truly know whether there is a market for their wares. The traction you get from customers saying "yes" is what creates the incentive for investors to write you a check and to build your own confidence to press on.

Now go sell something!

What is Your Idea Worth?

Wed, 20 Feb 2008 17:33:17 GMT

There’s a lot of talk among entrepreneurs about the value of an idea. Many entrepreneurs believe that a brilliant idea will spawn a great company. We read about companies like eBay that took one simple idea – online auctions – and turned it into a powerhouse company.

Yet ideas alone aren’t worth much. Very few companies, including eBay, became successful based on just an idea. Unless your idea turns into a patent that no one can replicate, it’s worth nothing until you can add the right elements to it.

Therefore a savvy entrepreneur will quickly try to back their idea with smart management, paying customers, and strategic partners as early as possible in order to build value around their idea. All of this can be done even before the company is ever officially launched, generating a ton of value in the formative stages.

Smart Management

There’s an old saying that the wrong idea with the right management team can at least have a chance of surviving, but the right idea with the wrong management team is altogether doomed.

That’s because the true value of an idea isn’t about the idea itself, it’s about the execution of that idea. There were lots of companies that easily replicated the idea of online auctions to compete with eBay. Do you remember them? No? Neither do I. That’s because eBay’s management team executed so much better than their competitors who had the exact same idea.

You can brag and boast about your great idea, but unless you can pull together a team that can actually pull it off, you’ve got nothing. Investors are well aware of this fact, which is why they often evaluate their investments on the merits of the management team of a new startup company more so than the business idea itself.

You can pull together a management team on paper without having to actually hire all of the members. Many startups have commitments from each key member of their management team long before the company actually launches, and most of those folks will probably be working at their old jobs for a while even after the company launches.

Paying Customers

It may be hard to think about having paying customers simply at the idea stage of your business. Let’s assume for a moment that the business hasn’t even launched, so landing real paying customers isn’t even an option.

Regardless, an idea is just an idea until you have a paying customer attached to it. Only then is it considered a business.

In order to get to the “business” stage then, you need to validate your idea with customers. This can come in many forms, from having initial conversations with potential customers to actually getting a purchase order ahead of delivery. Think about building up a “pre sales” pipeline of customers just as if you had already launched the business and were selling for real.

Anyone can question the merits of your idea, but no one can second guess a paying customer. The more customers you can find that are willing to buy into your idea (once your company has launched) the more value you’ve created for your potential company.

Strategic Partners

Strategic partners come in many forms, from investors to advisory board members to key industry partners.

Not every new company needs investors, although more than a few certainly would like to find one. Although investors can provide some much needed capital to launch or grow a company, the right investors also provide strategic value to your idea.

The most ideal partner would have either launched or invested in a company just like yours. They would know the ins and outs of your business completely and have a deep rolodex of customers, managers and potential acquirers.

With a partner like this, your idea gets some invaluable guidance to avoid costly mistakes along the way.

Lining up partners is really the last step in the process. Once they can see that you have the right team assembled and enough demand from potential customers, making a decision to partner with you, or in the cast of investors, to write you a check, becomes a whole lot easier.

The Value Hat Trick

All in all, your idea itself is nothing more than the foundation of your company. It’s the key building blocks of management, customers and strategic partners that truly build the structure.

You’ll notice that as you add each of these elements your sales pitch will become more and more bulletproof. More importantly, people will start to spend less time debating the merits of your idea and more time taking interest in the value you’ve created in your company.

Bringing all three elements together is the ultimate hat trick for an aspiring startup and frankly, a goal that very few entrepreneurs ever pull off. Yet if you want to get some traction with your big idea, it should be your first goal.

Using the Connections You Make Can Help You Get What You Want!

Tue, 19 Feb 2008 15:57:24 GMT

There is a great book authored by a friend of mine, Keith Ferrazzi, called “Never Eat Alone”. In it, he talks about the power of relationships to get where you want in life. He also talks about the power of gratitude. From my personal experiences, you will often hear me say that all of my first deals (money, investors, sales) have come from people I knew. These are the people who believed in me as a person, and knew that even if the business hiccupped at any point- that I would be around to make sure they were taken care of. They were willing to take a bet on me more than taking a bet on the business.

That’s why cold calls are not necessarily the best way to make a sale. People cold calling don’t have any connection to us other than they are calling to make a sale. Who wants that? No one in my book. A friend of mine at Microsoft told me once, “People like to buy from their friends”. Its such a common sense comment- but him reminding me really struck a chord with me. I thought- how true this is! If your friend calls, or a business colleague that you have created a relationship with and who you know knows how to take care of you calls- then you are likely going to pick up the phone and take a minute to talk and more importantly, listen. Then an interesting thing happened.

I got an email from a guy named Lawson Tree. Lawson has a great business idea and knew that I could likely connect him to people that could help him grow his idea and his business- especially funders. So like many people do- Lawson emailed me to see if I could help him. Being swamped, I saw the email and thought, I will get back to this. The reason is, before I can help someone, I have to have an understanding of what they are trying to do before I can open my Rolodex. People I send opportunities to know that I will do so because I think there is an opportunity for a real win-win. So all of this takes time- which is what I have very little of. Then Lawson did something VERY clever…

Knowing I am pretty busy, and Lawson needing and wanting help right away, he sent me an email that said, “As I mentioned I really appreciate the work you are doing. I learned something in the last few days: if I need help with something, I must help that person out. Therefore, I had an idea of how I could help you and "American Made" out with some cool content. Perhaps, I could arrange an interview with Dr. Andrew Weil for you as a service that I could provide to you?” Dr. Andrew Weil?! I would LOVE to interview him, have never met him, and until now, had no easy way to get to him. I had heard that he has even turned down interviews with CNN. A lot of you probably know Dr. Weil. He is an amazing health expert that is frequently featured on Oprah.

Long story short, Lawson reached out to Dr. Weil, arranged for the interview with me and came back to let me know when and where it would be. He made this happen for me! “Lawson, I would LOVE to interview Dr. Weil.” Honestly, knowing how difficult it can be to score guests for interviews a part of me thought “lets see if he can make this happen”. Just to provide some background, its hard to believe- but people who are already very high profile move from wanting/ needing PR to wanting to protect their privacy as much as possible. SO this can make getting interviews very difficult. A few days later, I get an email from Lawson saying, “Ingrid, I have secured the interview with Dr. Weil as long as we can do it in January and as long as its in Tucson (where he is located).” “YES!!!!”- this is wonderful! So, Lawson totally hooked me up.

So what was my very next step? I picked up the phone and called the venture capitalist he wants to meet and that I know. Lawson is getting his warm introduction and I scored an amazing interview. So what is the moral of the story?

If you want to grow your business- then reach out to other people and ask them how you can help them?

Do something for them and ask them how they can help you.

Build that relationship, protect it like its family- its gold…and remember, “People love to do business with their friends.”

About the Author

Ingrid Vanderveldt is the CEO of Club E Network, a Broadband TV & Social Network for entrepreneurs. Club E provides original television programming and resources for entrepreneurs and connects business owners around the world through its online community and on the ground chapters. Ingrid also hosts CNBC’s “American Made” and “On The Road With iV”, interviewing some of the Nation’s leading entrepreneurs.

Ken Losch - Empowering the World

Fri, 15 Feb 2008 15:15:56 GMT

When you think of billionaire real estate developers, why do you think they do what they do? Money? Fame? Power? Excitement?

Phoenix real estate developer, mega-entrepreneur and professional Indy race car driver Ken Losch spoke at last week's Tempe Club E meeting at Purvine his local winery.

While I must add how delicious the wine was (and I am not a wine drinker), what was more impressive was the mission behind the winery. Purvine was established for the sole purpose of supporting the economic rebirth of 10,000 people in Zambia, Africa.

Ken told us that early on in his career, he made a declaration that he would become a billionaire. He said this goal had very little to do with having a lot of money to spend on himself, as he could never possibly consume that much money, but that by becoming a billionaire, he could empower the world.

Ken credits much of his success to his ability to train his mind to see everything as an opportunity, when others only see obstacles. He also raved about the Kolbe Index, an assessment tool that allows you to "find your genius", as Ken puts it, identifying your strengths, weaknesses, and accurately pairing you with others that compliment your skill set. Ken's foundation, TRACares, partnered with Kolbe to offer the tests through its website, with half of the proceeds going directly to support TRAcares cause in Africa.

What pumped me up most about the talk with Ken was not only the challenges he faced as a kid, with teachers telling him he would amount to nothing more than a car wash attendant, but the words he had his wonderful partner Andrea write down on the white board during his speech, "Empowering Community": which Ken refers to as his "passion statement". "If it doesn't empower community, we don't do it", said Losch. Empowering community is what we do at Club E Network, and what I aim to do with a film project I am working on with a number of talented entrepreneurs. I can't think of anything more worthwhile for all of us to spend our time on!

Corey Kossack is President of Club E Network, a Broadband TV & Social Network for entrepreneurs. Club E provides original television programming and resources for entrepreneurs and connects business owners around the world through its online community and on the ground chapters.

Wil Interviewed on Vator for Go BIG and GotCast

Thu, 14 Feb 2008 13:42:00 GMT

Had a great visit a few weeks ago to the Vator.tv offices and shot a quick interview with Bambi Francisco.

You can View My Interview here.

Vator is giving entrepreneurs the opportunity to create video pitches of their business, making them available to investors, partners and potential employees.

What I liked about Vator from the start was that they provide a very human element of the pitch process. It also gives other entrepreneurs the opportunity to see how different pitches are delivered, from the very people that are giving them.

In this video I'm pitching both GotCast and Go BIG, so you can see me in pure entrepreneur form selling both concepts at once, which is somewhat unusual.

It's also the first time I've shaved my beard off in over a year, which for better or for worse, transported me from my mid-30's back to my mid-20's, which now that I'm in my 30's, is pretty damn refreshing.

Special thanks to Bambi, Roland and Meliza for taking such good care of me. If you haven't had an opportunity to post a pitch for Vator yet, I suggest you do it now.

Post a Pitch for Vator

Going Public in Canada - Interview with Colin Campbell, CEO of Hostopia.com Inc

Thu, 07 Feb 2008 15:47:50 GMT

Entrepreneurs at the helm of high-growth companies always need more of one thing: capital. To support rapid expansion, enter new markets and grow their customer base, startups need investment, and they typically turn to angel investors and venture capitalists to raise early stage capital. But when it comes to growth and expansion capital, venture investors may not be the ideal option, as entrepreneurs often end up relinquishing considerable equity in return for that capital.

Of course, an IPO is another way to raise expansion capital, but for most growth companies with annual revenues under $50 million, a public listing on Nasdaq or NYSE is not an option. But north of the border in Canada, the Toronto Stock Exchange (TSX) and its microcap market, TSX Venture Exchange, have been providing access to capital for small-cap public companies for over 100 years. And that’s why, as director of business development and strategy at TSX, I see more and more American entrepreneurs turning to the Canadian public markets for their next round of financing.

Despite that over 130 U.S. companies are currently listed on TSX or TSX Venture Exchange, many U.S. entrepreneurs have never considered TSX as a viable financing option. To address this limited awareness, I have been invited to write a series of guest blog entries for Go BIG to help entrepreneurs understand the ins-and-outs of going public on TSX – as well as the advantages, opportunities and challenges a Canadian public listing provides.

In this monthly blog series, I will interview a series of U.S. CEOs who have taken their companies public on TSX, so that they can share first hand what it takes to make it as a public company north of the border. The first interview in the series is with Colin Campbell, CEO of Hostopia.com Inc. When the Internet services firm, based in Fort Lauderdale, Florida, needed to raise expansion capital in 2006, the company considered its financing options, including tapping late-stage venture investors. Among these options, and ultimately the right choice for Hostopia, was to take the company public through an IPO on TSX.

At that time, Hostopia had annual revenues of $22.5 million and had recorded 26 quarters of consecutive revenue growth, but it wasn’t a large enough company to make a splash on Nasdaq. Mr. Campbell looked into listing requirements for several overseas markets, including London’s AIM, but chose TSX for its 100-year history serving small-cap companies, as well as its high average liquidity. Hostopia completed a successful IPO on Toronto Stock Exchange in November 2006 and now has over 200 employees and a market cap of around $70 million.

I caught up with Mr. Campbell last week and he had a lot of great insights to share with entrepreneurs hoping to take advantage of the Canadian public markets.

1. Why did Hostopia decide to go public in Canada instead of the US?

After doing a great deal of research into the process of going public, we decided that Canada had some significant advantages that allowed this process to happen more quickly and easily than in the US. The market in Canada is open to early-stage technology issuers, which, when coupled with the fact that there were still relatively few well-known technology companies in Canada, meant TSX was a fertile ground for technology companies looking to go public. As well, investors seemed to be more patient and able to tolerate lower liquidity in the short term. Finally, activity on TSX is high, which means smaller companies like Hostopia garner a great deal of attention in Canada, from the media, analysts and investors alike.

With regards to Hostopia.com’s specific situation, while we were growing, we were still too small to do an offering in the U.S. Additional costs of $350,000 would have hit our bottom line. We soon realized TSX was a Tier 1 exchange and would be a great stepping stone and training ground for NASDAQ. We were able to achieve our objective of raising close to $29 million on TSX, which, in turn, granted us a greater profile. Several analysts became interested in the Hostopia business model and became vocal about the company’s value. This was another invaluable benefit of listing with the TSX.

2. What benefits did a listing on TSX offer over a listing on another foreign exchange, such as London’s AIM?

We considered options like AIM, but given our North American presence, it didn’t make sense. In addition we felt AIM did not have as good a reputation as TSX and would make it more difficult for us to expand to the Nasdaq market in the future. TSX has a great reputation and a history of benefiting smaller companies such as ours.

3. Tell us a little about how your IPO went.

We were successful at raising almost $29 million with strong backing from both Canadian and U.S. institutions. The fact that TSX is well known by U.S. institutions helped us raise the funds we needed. As I mentioned, the exposure we got afterwards by opening on TSX, and getting on the Toronto Media business shows, was, and continues to be, excellent. We have also been very pleased with the help from TSX Surveillance in making the reporting methods and regulations clear.

4. What were some of the challenges you encountered going public on TSX?

The most difficult issue was that we still had to file with the SEC. The regulators in Canada were very easy to deal with, but getting our final prospectus approved by the SEC took much longer and cost a lot more than we expected it would.

5. What practical advice would you offer American entrepreneurs considering a listing on TSX?

First and foremost, determine if you really need to go public. We had venture capital rights and capital requirements that made it a priority for us. If I had my choice, I may have waited a couple of more years to develop the business and grow revenues and EBITDA to a point where getting to NASDAQ would have been feasible. .That being said, we believe the additional capital will accelerate our growth and help us consolidate our market. If you do decide to go public with revenue between $25-$50 million, I think TSX makes a lot of sense for young technology companies.