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Why Are Some Entrepreneurs Doomed to Failure
 

Why Are Some Entrepreneurs Doomed to Failure

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    Why Are Some Entrepreneurs Doomed to Failure Why Are Some Entrepreneurs Doomed to Failure Presentation Transcript

    • Why Are Some Entrepreneurs Doomed to Failure? Elton B. Sherwin Ridgewood Capital University of San Francisco September 29, 2011
    • Do’s and Donts• Getting Started• Superbasics• Your Career and Leadership Skills• Tips• Two Common Fundraising Mistakes• Gardening• Advice From Hollywood
    • Which Two of the Following Do You Most Need to Focus On?At different seasons of your life and in different stages of abusiness, your focus changes
    • Getting Started
    • Avoid Kamikaze Co-foundersSome people enjoy• Making life hard• Cheating• Lying• Breaking the law• Gossiping• Withholding informationAny ONE of these will cause you great pain
    • Don’t Start a Business with People You Don’t Like Or who don’t like you
    • Work with People You Like• You will be spending a lot of time with them• Successful founding teams like each other 80% of the time
    • Work on Things You Are Interested In• It is not all about profit. God gave you interests and passions for a reason
    • Research the CompetitionI see entrepreneurs who have not Googled theirbusiness ideas or don’t know who theircompetitors are
    • Summary of Getting Started• Work with people you like to work with and who aren’t pathological• Work on stuff you are interested in• Do your homework
    • SuperBasics of BusinessSometimes even experienced people forget
    • Need CustomersBefore you build your business ask prospective customers:• If we build this product/service would you buy it?• How much would you pay?
    • Make Money• Positive gross margin (usually above 40%)
    • SuperBasic SummaryEarly customers:• Difference between success and failure• Clarify goals• Credibility with investors• Fund development
    • Your Career and Leadership Skills• Work in a restaurant before you start one – Run a restaurant before you buy one – Join a team before you start one (usually)• Write down your best idea every day – Word outline mode in a file on dropbox• Try different jobs – Which position is right for you: Coach, pitcher, second base or right field? Which is right for you? – Babe Ruth started as a pitcher• Join a winning team
    • Tips• Test early, test often, test everything – Culture of “cheap mistakes” – Products, marketing, sales, organization – Learn by trial and error• Listen to customers – Not to be confused with getting customers – Getting customers is more important than listening to them. But listening usually helps.• Practice and Study• Embrace uncertainty – Most forecasts are wrong – Some belief you hold is wrong – Humility about the future is good – Robust business: doesn’t require the perfect wave to succeed
    • Two Common Fundraising Mistakes
    • “Uncompelling”PowerPoint Presentations No compelling reason to invest
    • Look at the Outline in The Silicon Valley WayThe complete business plan presentation is attached in the appendix andall The Silicon Valley Way worksheets are available on Slideshare
    • No Elevator Pitch• Start with an elevator pitch – VCs make up their minds in the first 30 seconds – The first three sentences really matter – Don’t start with Bios• It should be COMPELLING – One to three sentences – Practice it everywhere – When people offer to invest in the grocery store checkout line: You have a compelling story
    • Examples of Effective First Sentences“GE has asked us for 1,000 units and we are here today to raise money for our…” “Our applet is currently one of the ten most downloaded applications on the iPhone…”“In our lab we have successfully used sunlight to create hydrogen and…”
    • Should You Raise Money?• Not every business should be financed by venture capital• Some businesses should be “bootstrapped.”• Hard to be successful with low margin business.
    • Entrepreneurship Is Like Gardening
    • Don’t Bet Everything on One Seed
    • DiversifyMyth: Great Entrepreneurs BetTheir Careers On One Idea
    • Prune • Deadwood • Diseased • Twisted • Failed
    • Prune Healthy Things Make Room for Greater ThingsFor more on this topic, see:Henry Cloud, Necessary Endings
    • Advice from
    • Americans Watch 16,000 hours of Television (before college)
    • We LearnOn a great team:• Everyone is an extrovert• Everyone interrupts• Everyone talks without thinking
    • Leaders• Take bold action – Risk everything daily• Plan on the fly – Group decisions are a waste of time• Do it all yourself – Do it your way• Don’t tell anyone the plan• Ignore the law
    • American Leadership “Training” Risk everything Do it yourself The law is irrelevant
    • • Risk everything• Do it yourself• Ignore the law
    • Most Successful Entrepreneurs • Think boldly – be innovative • Minimize risk • Take frequent, small steps • Play well with others For more information, see: Len Schlesinger, Action Trumps Everything
    • Myth All about having great idea RealityJoining or assembling the right team
    • Conclusion• Focus on more than the idea – Usually 6 to 50 companies have similar ideas• Join a winning team – Thoroughly research companies• Don’t let failure discourage you – Winners have lots of failures – Failures get discouraged and give up• Be reluctant to borrow money – Personally and professionally
    • Handout
    • Appendix