I'm beginning to organize some of my notes from the SD West conference I attended a few weeks ago.
The title of one of my favorite sessions was "Do I have what it takes to be a successful entrepreneuer?"
Here are some highlights from my notes:
Almost all failures in small businesses are not due to technological reasons, but rather due to management, flawed execution or lack of customer focus.
This seems kind of counter-intuitive, but makes sense upon closer inspection. Engineers can dream up great gadgets and generally can produce a product, but if that product doesn't get out the door and purchased by customers, nothing happens. Look at the Apple Newton as an example . . . It was a great device, way ahead of its time, but it was not successful because people were not ready to buy it. You can make a great product, but without customers, you don't have a viable business.
The numbers in the business plan don't matter . . . much.
Venture Capitalists know that nothing will go according to plan, but they like to see that you are serious enough to actually sit down and think things out. It is not having the numbers correct that counts in your business plan, but rather the fact that you've put some thought into how you will run your company.
One of the most important things to do as an entrepreneur is to network.
Whether you're looking for VC funding, seeking business advice or looking for great engineers, building a large network of great people will allow you to have those resources available when you need them.
Successful entrepreneurs are generally younger, aggressive and enthusiastic.
Entrepreneurs must be able to attract great people. They must also inspire trust; VCs will ask if the people they're working with are believable. A slightly relevant quote: "Women have better bullshit meters because, let's face it, men bullshit all the time."
Hire slowly, fire quickly.
It takes a lot of great people to build a company, but one person can drag your organization down to failure. Carefully consider your personnel decisions and get rid of problems immediately.
Raise money on the front-side of a milestone.
Investors are much more likely to fund your venture if you need the money to reach a goal.
Finally, one of the VCs on the panel explained, slightly tongue-in-cheek, how he values companies:
He takes the number of engineers, times $250,000 . . . and subtracts $500,000 for each MBA.