Month: September 2013

“No Conflict? No Interest!” – Ted McAleer

When institutions and entrepreneurs come together, such as in technology licensing or research faculty forming a startup, there are always conflicts of interest. If not, it’s a sign that everything, including the value of the venture has been watered down to pointlessness. Excessive policies and conditions are ultimately a way of saying “no” without having to own it.

Risk can never be eliminated. Only identified and managed. And sooner or later, somebody will complain.

Transparency and honesty go a long way so identify the potential conflicts and work it out. THEN let the attorneys write it up.

Each case is different so be flexible. No one set of rules can apply to every opportunity.

Ted McAleer served as a panelist at the 2013 SSTI Conference

“The money comes AFTER you win the championship. The championship comes from the sweat of the brow.” – Rob Wiltbank

Everybody dreams of being the champion.

But no sees all the hard work, stress and toil that go on behind the scenes; the practice, the pain, the setbacks.

Though there’s rarely a free lunch, there is one guarantee. No one wins unless they decide to play.

The players are the ones getting it done. Everyone else is a talking head blathering on about what the players are thinking.

Analysis comes from history so go make the history and let’s the wannabe’s talk about how you did it.

Rob Wiltbank was a panelist at the 2013 SSTI Conference in Portland

“3 pages, 30 pages, 300 pages” – Dan Marcum

Dan Marcum of Relevance Capital says there are three types of business plans; one that is 3 pages long, one that is 30 and one that is 300.

This outlines the stages of involvement in the investment relationship. The 3 page executive summary is your company’s resume. It’s long enough to generate interest and hopefully a request for a meeting. The 30 pager is the typical business plan that provides the details about your market, financials, development and the team. And the 300 page plan is the due diligence checklist you will be given when an investor gives you a term sheet.

The 3 pager is much stronger after the 300 pager is done, BUT!!!! you can’t stop everything and focus solely on the writing a detailed business plan because the moment you finish, it is out of date.

Keep your Business Model Canvas Current. You should be able to whip out a 3 page Executive Summary when you need it but update it as you go.
As you iterate the Business Model Canvas, keep a digital folder of every website article, market research report, financial analysis, customer interview, legal document and bank statement. This provides the meat you’ll need to write the 30 pager. Keep it updated every three months or so unless you get a meeting, then tweak it one last time.
The 300 pager can probably wait until asked for. Each investor has their own and it may be long or short and they will give you a checklist. If you have kept your digital file organized, you will be able to quickly put together all the documents they ask you for.

“Sometimes you eat the bear. Sometimes the bear eats you.” – The Stranger from The Big Lebowski

I signed a license agreement for my core technology and it was a great moment. The next day I found out I may not be able to source my key ingredient. More delays and cost…

Starting and running a company is a daily grind. There is always the next problem to solve. Negotiations are frustrating and take way more time than they should but that’s the way it is. Getting angry just raises the blood pressure.

It takes a constant push and pull. 9 times out of 10 there is a solution and if not then you have to pivot.

But before I decide to throw in the towel, I check with my key advisor team. They keep me grounded and point out options I had not considered.

Fortunately, for entrepreneurs, being eaten by the bear is seldom fatal.

“A market is never saturated with a good product, but it is very quickly saturated with a bad one.” – Henry Ford

Henry Ford may not have invented the automobile but he certainly did innovate a way to put it in the hands of the masses. The vision was a car in every driveway. Until that time, it was a high tech toy for the wealthy. His innovation was the assembly line and a design that met the MVP, (Minimally Viable Product)… you know, any color you want as long as it’s black.

Of course eventually, the stakes were raised. As more people owned cars, their expectations for features and comfort increased. The moral here is you can never stop innovating because eventually competition will catch you.

Entrepreneurs have a knack for finding crappy products or crappy situations and making a better way. People will always buy what they think is a great product.

“I have only one superstition. I touch all the bases when I hit a home run.” – Babe Ruth

This is the Babe’s version of “The harder I work, the luckier I get.”

There are few short cuts and even fewer free lunches. Michael Jordan still practiced 8 hours a day. Great jazz improvisers took years to learn how to play with spontaneity.

Opportunity rarely finds those who haven’t earned it or otherwise, put themselves in a position to receive it.

Investors don’t invest in your ideas. They invest in your ability to create value. The rounding of the bases comes after the ball is hit…. Luck has very little to do with it.

“I don’t know the key to success, but the key to failure is trying to please everybody.” – Bill Cosbey

HAPPY CROWD FUNDING FOR EQUITY DAY!

It’s interesting how often people predict the doom of Apple because of the iPhone. Every version had quirks and bugs and yet we are on the 6th (?) version and Apple continues to set the standard.

Startups have plenty of “advisors” and critics. The community is being overrun now with entrepreneurial service providers, accelerators, mentoring programs and the like. Angels groups are growing and now we have crowd funding for investors. All of these interests have their value in helping to shape entrepreneurs for success.

But there’s really only one measure…

Are your customers buying your product?

If the advice you’re getting does not point you to that, then it’s bad advice and a likely key to failure.

“When you have disciplined action, you don’t need excessive controls.” – Jim Collins

Jim Collins on Discipline – part 3 of 3

Everything a startup does should be pointed at getting the product in the customer’s hands and then getting the next customer.

There will be a time for processes and middle management… perhaps.

Perhaps you will be acquired by then and not have to worry about it.

Your objective is not to win the next grant or to have a detailed research and development plan. In fact, your financials will be totally unpredictable so don;t spend hours tweaking the spreadsheet.

Spend the hours getting the product ready to ship.

“When you have disciplined thought, you don’t need bureaucracy.” – Jim Collins

Jim Collins on Discipline – part 2 of 3

Rules generally mean one thing: people can’t be trusted to do the right thing. Their presence also indicates ineffective leadership. It’s easier to make rules for everyone than it is to deal with to root cause of a problem.

When you have rules, you have to enforce them and keep track of them and update them. Before long, you have people whose job it is to enforce, keep track and update the rules.

Then it’s the rules that become the main thing. Then we have the Federal Government.

Hire the right people. Make sure they know the mission and their contribution. Fire the wrong people quickly.

“When you have disciplined people, you don’t need hierarchy.” – Jim Collins

This is “Collins on Discipline, part 1 of 3”

I’ve been in middle management and I found that I spent most of my time explaining to the troops what upper management was doing and why. On the other hand, I tried to spend time letting upper management know what the troops thought. That never went very far. Somehow, I came to believe this was deliberate.

If the mission is simple and clear, if there is an open line for brutal honesty and creative debate, and if the right people are in the bus, then there should be no need for a complex org chart.