Category Archives: Entrepreneurship

A few months ago Rick Segal and Paul Graham both offered good sample answers for entrepreneurs to use when asked the following two difficult questions from investor types.

First, via Rick Segal, Who’s the CEO of the business? gets asked under any of the following masks:

“Help me understand how the current management team gets the company to 50 million a year in revenue?”
“Do you think you and your team are strong enough to get it over the finish line?”
“What’s the track record of your management team with respect to successful exits?”

Rick suggests the following answer:

Your best positioning when you are starting a company is to start with and keep the title of founder. You get the maximum flexibility in dealing with company growth and minimal impact on your ego. You can answer any of the above with “Look, I’m the founder and we’re running a million miles an hour towards being successful as you can see here… The objective is to find a financial part and a solid board to help me, as the founder, grow the management team and knock this baby out of the park”

Second, via Paul Graham, How much money are you trying to raise? He suggests the following dodge:

We advise startups to tell investors there are several different routes they could take depending on how much they raised. As little as $50k could pay for food and rent for the founders for a year. A couple hundred thousand would let them get office space and hire some smart people they know from school. A couple million would let them really blow this thing out. The message (and not just the message, but the fact) should be: we’re going to succeed no matter what. Raising more money just lets us do it faster.

In my experience, people in their 20's who work in start-ups or entrepreneurial environments are almost always happier than people working in banks or consulting firms. The young bankers or consultants justify their short-term unhappiness by their hopeful long-term payoff in money or prestige.

There are lots of reasons why I think my small-company friends are happier than big-company friends. I think the most important is that small, dynamic, innovative teams are just more fun than massive, anonymous organizations where you feel like a cog.

The fun factor is wonderfully captured by First Round Capital's awesome 2008 e-Christmas card, which you can view here on YouTube or embedded below. Seriously – what investment bank or consulting firm would do something like this? Along the same lines, check out the funny lip dub clip (also embedded below) from TechStars over the summer that all the teams contributed to. Again, where else would this happen but in a start-up environment?

In tough economic times the conventional entrepreneurial wisdom is: “Start a business that unambiguously saves people money or time.”

True. But it might also be a good time to start a business that helps people (especially unemployed people) waste their newfound free time.

For example, I think it’s a great time to be in the online gaming space.

The folks at Venture Hacks just updated their 35 slide presentation A quick and dirty guide to starting up. There's some great stuff here and it doesn't take long to click through. I recommend it for anyone interested in entrepreneurship or starting their own company.

One of the slides has the following Hugh Macleod quote. Not sure I agree or even think it's relevant to entrepreneurship but I found it provocative:

The price of being a wolf is loneliness. The price of being a sheep is boredom. Choose one or the other with great care.

Two of the most interesting business thinkers around, Tom Peters and Seth Godin, were on-stage together at a recent event and jointly answered questions about "the entrepreneurial mind." Here's a page with all the labeled two minute clips. The best ones:

• Let's hear it for the blog. Seth says that blogging is not about the size of your audience but the "meta cognition" of thinking about what you're going to say and then saying it, having to explain yourself. Tom says that blogging is the most important professional thing he's done in the last 15 years. Note: Seth says "blogging is free." Not true. Blogging takes time. Time is money.
• What's first: loyal employees or loyal customers? Tom says loyal employees, and relays the story of Herb Kelleher (Southwest Airlines) writing a letter to a verbally abusive customer saying, "You do not have the right to treat my employee badly."
• Has technology killed customer service? Seth says an angry customer is an opportunity to deliver a Wow! experience.

Some other random links:

• Andrew Sullivan has a nice meditation on why he blogs in the latest Atlantic. Scott Rosenberg notes that Andrew is coming at it from the perspective of a trained print journalist, and not all bloggers are alike.
• The New York Times as a business is running on fumes. Here's one plan for how it can save itself: sell the Boston Globe, sell its stake in the Red Sox, cut 20% of the newsroom, etc.
• Is there a more articulate guy in live oratory than Christopher Hitchens?
  • In that Charlie Rose interview Hitchens says he's never had a gift for writing fiction. One proxy for fiction writing ability, he says, is a deep understanding of / appreciation for music.
• Women, have you ever made this request to your man? [Warning: Not safe for work.]
• Half of U.S. doctors use placebo treatments…and many do not even tell their patients that they're giving a placebo instead of a real pill.