Archive for the ‘lists’ Category
If you’re like me, you love to come up with ideas. Inspiration strikes at any time and you immediately start to mentally construct the b-plan. What are my startup costs? What capital do I need to start this? What inventory will I need? What will be my distribution method? What will the company’s name be? What is the target demographic? How much do I need to sell in order to break even? Who do I know that would fit great on this team? If you’re not asking yourself these questions, you need to take your idea to the next level and start asking them! Not only do you have to ask all of these questions, write up your answers, run the numbers, and ask yourself whether or not you would be passionate enough about this idea, but also you have to ask yourself if this is feasible and worth your time
What Assumptions Are You Making?
After running through the planning stage and figuring out what situations would make the numbers work, I often find myself becoming too excited about the idea and wanting to immediately start the implementation. But, before you focus your attention like a laser, ask yourself whether or not your assumptions make sense. Do you really think you can sell that many cups of coffee in a day? Do you really think 10% of the people who visit your site will sign up? Did you pay yourself for the amount of time you will commit to this endeavor, the number of sleepless nights, the countless headaches? Be ruthless in your evaluation and if any of your assumptions are shaky, be willing to kill the idea. It’s better to let an idea die and move on to your next big plan than to sink hundreds of hours of your time into an idea’s implementation that ultimately fails.
What Questions Should I Ask?
- Why hasn’t it happened? This is one of the best questions to ask because good ideas are a dime a dozen. Rather, it’s the implementation, execution, and timing that have more to do with success. Everyone thought video on the internet was going to be a big thing, but it wasn’t until YouTube came around that the conditions were just right - enough people had broadband internet, people had access to video equipment, and they made it super simple to upload your video and share it.
- Is this something people will actually buy? A common sense question, but needs to be asked nonetheless. If you are targeting students and you are a student, would you buy your own service? If you aren’t part of the target demographic, ask someone who is.
- Is there IP around it? What will prevent competitors like a Microsoft or Google from entering the field and doing what you do at a lower price? Is there something you can patent, a trade secret to be developed, or a business process to leverage? In the case of internet startups, this is much harder to do and is somewhat impractical, but in a medical devices company, you don’t have a company unless a patent is present.
- How will you get distribution? In the Information Age, it is much easier to get exposure, yet also much harder. To get a website up and start marketing is simpler than ever before, yet because it’s so easy, what’s separating you from the other hundred websites competing for the same eyeballs? Distribution is key and by leveraging different marketing, publicity, and partnership streams, along with killer value, it may be just enough to gain traction in this sea of information.
Conclusion
As you can see, merely coming up with an idea and fleshing out some of the logistics isn’t enough. Sure, it all looks great on paper, but given the real-world business environment it becomes absolutely necessary to check if your assumptions are airtight. Any small hole could lead to a devastating failure. A quick story about the importance of assumptions is with my business mentor. He was in the process of starting a medical devices company. He had done all of the market research, had assembled a killer team, had worked out the numbers, and everything looked like a go. The only problem was that the patent holder had previously licensed the technology to a company that was now failing and instead of re-licensing the patent, he instead wanted to juice whatever he could from the failing company and essentially let the patent expire. As you can see in this case, setting up an agreement with the patent holder is a somewhat small but extremely critical part of starting this business, and after hundreds of hours were invested the business plan collapsed and is no longer viable. Final lesson: Check your assumptions, and if anything critical isn’t set in stone, be willing to drop the idea without looking back.
As I was perusing the EdCorner one evening, I stumbled across a podcast of Tina Seelig, one of the professors here at Stanford, talking about ten lessons she wishes she knew when she was 20. To many students I’ve met here at Stanford, Professor Seelig is a hero and I’m actually supposed to have the great privilege of meeting her both in Discovering Entrepreneurship and Social Entrepreneurship ASB. I’m extremely excited about this opportunity, and without further ado, I’ll give a recap of the ten lessons.
1. Every problem is an opportunity for a creative solution.
Also, the bigger the problem, the bigger the opportunity. One example she gave is that she presented students in her class with $5. They then had a week to change that money into whatever kind of profit they could muster. Some may think that they made $10, $50, or maybe even $100, but in fact the teams averaged $200, and the greatest was $650. How’s that for only a weeks worth of creative problem solving? And, in case you were wondering, the winning idea was a 3 minute pitch that was sold to recruit students in the class. Others bought reservations for popular restaurants and then sold them to those who didn’t make reservations but were willing to pay to get in. One final idea that was particularly interesting is that students asked for donations after checking bike pressure and adding air if it was necessary. The reason why this is interesting to me is that the idea of asking for donations put the challenge of determining value into the hands of the beneficiaries - the students - and many of them ended up donating much more than the students could have been asking for.
2. The harder I work, the luckier I get.
This quotation, repeated by many individuals, really highlights one of the keys to my success. I’ve always been a person to go the extra mile in things I really care about, and one example that really paid off is getting into the school of my dreams. Another thing that’s talked about is to do interesting things. Go to fascinating lectures. Meet interesting people. Travel to interesting places. Not only will you become an interesting person, you will learn a lot and have a ton of fun along the way. One final tidbit Professor Seelig provides is that the key to working hard is not only performing on the whole but also executing the details.
3. Find the intersection between your interests, your skills, and the market.
One comment that really resonated with me is the idea that passion isn’t enough. You also have to understand and appreciate the other two pieces. For example, if you have only passion but no skills or there’s no market, you have a hobby. If you only have the skills but don’t have the passion, you are working a job.
4. Try lots of things and keep what works.
This idea I have a bit of a problem with… I personally find myself either trying too many things (and thinking I’m unproductive) or not experimenting enough (and falling into a boring rut.) The personal balance may be a bit off, but I also know that there are too many things that I will find interesting and works that I don’t have enough time for. I already find myself too busy at Stanford, and I haven’t even experienced a small fraction of what the world has to offer. Overall, if you’re bored, you’re not experimenting enough. Tina goes on to say that if you’re not failing sometimes, you’re not taking enough risks. Failure is one of the greatest teachers, and I definitely agree to this through personal experience. An example from Professor Seelig is that for every book she gets published, she has two that are unpublished. One final idea that she left, and I think is really cool (and I will do), is to create a failure resume… I think the results will tell a lot about myself that I haven’t thought about.
5. Don’t have to wait to be anointed.
Entrepreneurs are individuals who make their own business cards. They are the people who decide what they do, and they realize that in order to get ahead you have to take on whatever responsibility is necessary. A quick quip for those working as employees - if you do the job, you will get the job! Therefore, don’t wait to be asked to do something, simply step up to the plate and do what’s necessary. If you do a great job, it should be recognized by your superiors, and eventually you should be rewarded proportionally.
6. It is a very small world, so don’t burn bridges.
In this world, there are only 50 people that really are the movers and shakers, and Professor Seelig noted that you will bump into them all over the place. As such, it’s a horrible idea to burn a bridge, especially with one of these individuals, because you never know when it is going to come back and hurt you. To put the idea as simple as possible, you should be proud of the relationships you maintain.
7. You can do it all, just not at the same time.
Again, this is another issue that is currently facing me. I want to do everything, all the time, and I’m realizing there is a glass ceiling (usually referred to as time) that limits what I can do and what I can’t do. Ultimately, it forces you to be creative and figure out what your priorities are. Here are the three things that are critical to Professor Seelig. Be okay with saying no vs. dropping priorities that you are already committed to and engaged with. Next, be willing to reassess priorities frequently. Finally, there is no such thing as a balanced life. An example that proved quite interesting is that former Supreme Court Justice Sandra Day O’Connor said, “Work life is really long, but kids are little for only a short period of time.” I personally want to have a family, and I’m very unsure of whether or not I should make that a priority when I’m younger or when I’m older… At least it’s something to ponder.
8. The little things matter the most.
When it comes to an interview, you should make eye contact, shake, thank you. After the interview, you should send a thank you note within 24 hours. It’s the little things like these that make a huge difference, and when I was fundraising for a summer program I might get into, I made sure to say “thank you” to all of the individuals that donated multiple times.
9. Team is about making everybody else successful.
Put simply, the more you make others successful, the more it comes back many, many fold. I personally don’t have a lot of experience working in dynamic, successful teams, but I think that she’s onto something with this one. I’ve read a ton of stuff about developing successful team dynamics, and all of them have something different to say. While I think it’s important to note that there are several characteristics of successful teams not noted - such as skill sets, similar goals, etc - I also believe that entering a team with this mentality increases the odds of success manyfold.
10. Never miss an opportunity to be fabulous.
If you’re not doing best work now, when will you do it? The key is to keep an open mind and let people run with the idea. Setting up premature expectation vs. leaving things a bit open-ended most times results in a cap with the mentality, “I only need to do X, Y & Z to get an A.” Professor Seelig instead wants to point people in a particular direction and realize the amazingness of the results they produce. This idea is very sticky and extremely contagious. The times I’ve been most impressed are when people are given a general sense of where to go with something and then they produce something that is absolutely phenomenal.
Conclusion
I don’t know if there is a day that has gone by recently where I haven’t been thoroughly impressed by something someone has said. The atmosphere for entrepreneurship is amazing here, and I don’t think there is an equivalent anywhere else in the world. Being that this podcast was relevant to myself and other college students, I found it intriguing and ultimately very beneficial. While I have my reservations about some of them, I look forward to capitalizing on a few of them in my day to day life.
So, this year’s Apple keynote left much to be desired, but at least there were some very cool/interesting business points made. The keynote can be viewed on Apple’s website, or here, and instead of talking more about Apple, I’ll dive straight into my observations…
1. Make the Pie Bigger
Apple has recently sold 5,000,000 iPhones, and comprises 20% of the smartphone market. While some may argue that people have switched from one smartphone to another, I am very adamant that people have upgraded from a regular phone to a smartphone, and instead of competition amongst a small segment of cellphone users (the business market), they have tapped into the general cellphone market and moved them up by adding benefits that a non-business user would enjoy.
2. People Don’t Want to Pay for Software Updates
The iPod Touch has a $20 software update that adds applications that are currently available for free on the iPhone. Because the platform is essentially the same and iPhone users received them for free (and it includes simple applications like Notes), it is easy to see why there was a very lukewarm reply to this announcement. While I personally feel that many people will not pay for the update, we’ll see what ends up happening.
3. Listen to Your Customers
Apple finally admits the first Apple TV was a flop. A complete and utter flop. There reason why is because customers want three things on their television - movies, movies, movies. Not only has Apple made movies available, but also they are easy to get and watch. And because the rentals are either $3 or $4 depending on new release or not, it is affordable for everyone. Because they are listening to their customers and making it as easy as possible, this go-around is definitely going to be more successful than the previous one.
4. Keep It Simple-Stupid
I’m a little torn on the Macbook Air. I think there is a lot of really cool/innovative stuff that it provides, but there are a lot of questions of practicality/usability. I think the full size screen and keyboard is a plus, and having a flash hard drive that is noticeably faster (even though it’s expensive) adds a lot of advantage to those looking for it. The lack of an optical drive is a bit of an issue, but the workaround is somewhat decent (utilizing a nearby computer’s optical drive.) The problem I see, though, is that it sounds like a similar issue to the Apple TV and not listening to its customers and providing a super-easy workaround. A lot of talk has been made on other blogs about utilizing iTunes for software downloads and if that was done, then I would call that aspect a winner. Overall, for a computer that is super-light and easy to use, I think this computer will be a good seller, but not a rockstar, because everything isn’t as simple as it could be.
5. Don’t be Good, be Great
When Apple does something, it usually doesn’t shoot for being just good - it wants to be the absolute best. It’s user interface isn’t just good, it’s the best on the market. Another way it is establishing it’s great reputation is through iTunes and the services offered. Getting the major music labels to join iTunes took a lot of work, but in the end everyone can see it has been a major success. Now, when it comes to making the service better, they are expanding into the movie market. And Apple didn’t just shoot for one or two major movie labels, they shot for the whole group. A good success would have occurred if most of them joined, but it’s a great success that all of them joined before a single movie was even available. Don’t get me wrong though, Apple does make some mistakes and isn’t great all the time, but their mentality of shooting for the best more often than not has led to HUGE successes for the company starting with the iPod’s initial release.
6. Being Environmentally Conscientious is Good for Business
Seemingly after listening to customer/organization’s complaints, Apple has decided to talk about their environmental initiatives. Two key developments are the elimination of bromine from circuit board laminates and mercury from LED backlit displays. Organizations like Greenpeace have been on Apple’s case for years about these issues, and finally doing something about it (or at least talking about it) I think will prove to be a strategic advantage for Apple.
Conclusion
There are a lot of cool things that have happened this past year in regards to Apple, and the future looks interesting, but only time will tell how things shape up. As for business lessons, it is quite obvious that Apple is doing something right, and the points highlighted above are some of the most critical to its continual success.
On December 23 of this year, one of my favorite coaches from high school passed away. He had been struggling with a weak heart for over three months, and after going through months of ups and downs, his body finally decided to shut down. He was a great man, passionate about life, rarely ever complained (he complained about the complainers… hey, we all have our faults), and an extremely hard worker. One of the best lessons I learned from him during track season is, “Always be content, but never satisfied.” As a sign of my appreciation for the impact he had on my life, I decided to consult with a bunch of people about potentially starting a scholarship in his memory. Drawing on an experience I had earlier in high school (that eventually helped me get into Stanford), I mapped out a plan of action.
1. Consult with Contacts in their respective field. The first person I talked to was a scholarship foundation administrator about the process of setting up a scholarship. I knew her from when I applied for my “Gap Year” after high school in order to defer my scholarships a year. She was very helpful and informative and sent me relevant information within minutes of getting off the phone with her.
2. Attract media attention. After I learned how to set up a scholarship, I called a former high school teacher of mine who has since retired and is working at the local newspaper. I asked her if she would be willing to help write up an article as well as get it published, and she responded with a resounding “yes.”
3. Get key community players to endorse your plan. Once I knew I would be able to utilize the press, I then talked with a mentor of mine who is also the most prominent lawyer in my hometown. He has set up many scholarships and is the go-to person about raising money and doing something for the community, and I asked for his feedback on the most effective fundraising method. In our case, because my coach had touched thousands of students lives, he recommended that we develop a grassroots-like campaign.
4. Set up easy locations to donate. Because my coach had also been a teacher for 23 years, I thought setting up collection locations in the office of both the high school and elementary would be a good place to start. I felt that students who had been touched by this amazing man as I had would be more than willing to give some money if they could. Another idea suggested by my key contact was to get a list of contact information for high school graduates from that timeframe. A third method of providing an easy way to collect donations is to set up a simple bank account with your local bank and point individuals who read the newspaper article to it.
5. Shoot for an ambitious goal. By setting up a $20,000 foundation, a $1000 scholarship could be given every year. Out of a town of 1500 people, that’s about $13 per person. If we consider all of the students/families/friends touched by him over his teaching career, that number could easily be greater than 3000 people (making it almost $7 per person). Also, given that when I collected donations for a summer camp at Stanford my junior year I raised between $25-$200 per commitment, the goal could be reached much easier. After two months of work, I could see the project easily raising $20,000, which in my mind, leaves an amazing legacy for an amazing coach, friend, and mentor.
Bob Cramer, a serial CEO who has successfully led six companies to big paydays, shares his 10 month journey of leading a different startup than he’s used to - Nimbit. With a company mission that has a goal to “put musical artists in complete control of their own music business and brand, enabling them to reach their full potential as quickly as possible,” Nimbit appealed to Mr. Cramer’s personal interests when he was recruited to join their team as executive chairman. The original article is told through a series of conversations that occur nearly monthly and can be found here. It was a great read and here are a few of the lessons to be gleaned from this engaging and charismatic leader.
1. Build an all star team. It seems every great start-up begins with a rock solid team. Having an impassioned leader, a web development guru, and a marketing all-star, preferably with some sort of track record, says volumes about your credibility to VC’s and angels when you’re looking for some seed money.
2. Take on mentors with similar passions. Not only should your team work well together, but also a rock star board of “veterans” with similar passions and solid connections could quickly take your business to the next level. Two of the reasons Mr. Cramer was an excellent fit are that he was passionate about the venture’s vision and he knew the ins and outs of raising seed money.
3. If you don’t know the answers, say that you will get them (and get them). At one point during a beginning round of investment, the VC’s asked a couple of questions in which the founders didn’t have any answers. Instead of letting the inexperienced leaders flounder, Cramer, acting in his then-advisory role, told the VC’s that they didn’t have all the information to give an informed answer, but would do so as soon as possible.
4. Hesitation can be costly. After meeting with a few venture capitalists and being told that they would pass on funding combined with Nimbit’s seed money running dry, Mr. Cramer became more proactive in his role and approached the then-CEO about giving up the reigns and letting Cramer take control. Many of the VC’s were looking to Cramer to take on a larger, more committed role, but he hesitated (he can only speculate at his reasoning) and by that time the company had lost enough momentum to be lethal.
5. Continue to beat up support, even when opportunity’s doors seem to be closing. Even though, in hindsight, Cramer feels he waited too long to take control, he proceeded to round up angel money to keep the company afloat while continuously pursuing VC’s for the money they needed to take the business to the next level.
6. Be bold and stick to your guns. Nimbit was receving no after no from VC’s, and after every visit, they would tweak things a little bit here, and a little bit there, but nothing too major. “Those kill companies” Mr. Cramer wisely pointed out, and he says that you should stick to the fundamental mission until that is proven flawed. And if that happens, you’re in serious trouble.
7. Know your audience. During a key presentation that involved people that could be potential clients, Cramer strategically had Faucher, the founder and former CEO, give the presentation. The reasoning for this is that Faucher is an ex-rocker who is passionate about Nimbit’s potential. The results were immediately appreciable, with one of the principal individuals letting out an enthusiastic “Wow.”
8. Build a great business in uninteresting territory vs. a struggling business in interesting territory. While it’s important to be passionate about what you are doing, if the business itself cannot work financially, it’s over. Things may have to be scaled back, reworked, and retooled, then approached again in order to be successful. There may be a number of other reasons why the business isn’t succeeding, such as bad market timing, inappropriate revenue model, etc. The important thing to note is that passion alone will not build a great business, and in a moment of Mr. Cramer’s reminiscing, we realize that half the fun in running a business is creating one that is rock solid, regardless of industry, product, or market.
9. In spite of everything, if failure occurs, live, learn, then move on. Sometimes things just don’t work out as expected. That’s life, as many people will easily point out. The key here is to reflect on what worked, what didn’t work, and how to prevent the same scenario from occurring again. Mr. Cramer took home a couple of these valuable lessons, and then moved on to the next big project.
Conclusion: Even though they were unable to raise the money necessary to take the business to the next level, the founders decided to scale back to reduce its costs and continue to operate. It is still making real progress, in spite of the tight budget. Mr. Cramer, on the other hand, took the CEO slot at Tervela, a data-messaging company based in New York.