Startup Entrepreneurs – 10 Thinking Points

“The answer is 10.”  Ted Sable, Ernst & Young

Growing up in Ernst and Young, we were afforded some of the most unique training resources in the world. One such resource was Ted Sable; an EY instructor who taught us soft skills around a subject called management development.  Now, Ted was an amazing instructor and his interpersonal skills were some of the best I’ve ever seen.  Realizing he was before a bunch of subject matter experts on accounting and tax who always wanted the answer, Ted would start a session with the above quote.  His point was people never really paid attention until they got to the answer so he would give the answer upfront, thus removing the apprehension and starting on the path toward a journey of enlightenment.

So, 10 is my answer; it is a list of thinking points for startup entrepreneurs.  As always, this is not developed based upon some empirical study but from lessons learned serving entrepreneurs in all phases of a business lifecycle. So here it goes:

  1. Business Model Versus Business Plan – I have blogged on this point in the past; you have to focus on the why (model) versus the how (plan)
  2. Vision Versus Passion – another subject of a recent blog.  You have to be convinced of the concept and have sufficient passion to breathe enthusiasm into the team without getting blinded along the way.
  3. Ownership Versus Reward – using your stock book as a checkbook is an easy way to invite long-term trouble.  Remember, you can’t get that genie back in the bottle.
  4. Short-Term Approach Versus a Long-Term Plan – people look for sustainability and not quick hits.  Trying to recruit team members or investors when you have something that may not last is a sure path towards failure.
  5. Collaboration Versus Lone Wolf – people invest in teams and not a genius.  Keep your ego in check and surround yourself with good people. Don’t go it alone.
  6. Mistakes Can Be the Key to Success – keep in mind, Churchill said that in order to succeed, one must fail 10,000 times.  “The Outliers” had a similar message.
  7. Team Versus You – always have an honest assessment of the capabilities of all team members including yourself.  Understand who is growing and who is not and be prepared to step aside at the right time.
  8. Talk to Smart People – more importantly, listen to them.
  9. Take smart money over the best deal – currency is fungible; great advice is not.  Always look to maximize your return, not only with economics, but with intellectual capital.
  10. Hire a Smart Advisory Team – follow and work with mentors and advisors who “get you” and make sure they are adding value and not just riding your coattails.  Smart advisors help keep you out of trouble.

So, there you have it; just some thinking points which, hopefully, will help you complete your successful journey.  Keep it posted somewhere to remind you and don’t be surprised if, when you get off the rails a bit, you don’t look back at this and see exactly where you went wrong.

Vision vs. Passion – Never Lose Sight of the “Why”

Colonel Sandurz: “Sir? Are we being too literal?”Spaceballs

Dark Helmut: “No you fool, we’re following orders. We were told to comb the desert so we’re combing it.”   Dialogue from Spaceballs, the movie.

When I hear aspiring entrepreneurs discuss what, at times, seems to be their “mission,” I often think of this scene from one of my Mel Brooks favorites.  Standard advice 101 for a new entrepreneur – maintain your vision and do not let others distract you from that vision.  This is usually accompanied by the standard “you have to remain passionate about what you believe” speech.  So, why discuss this subject at all?  I believe, too often, these concepts are confused which can work to the detriment of the aspiring entrepreneur.  At times, the concepts get taken too literally and many even interchange one for the other.  But, they are separate and it is important to understand the distinction.

A vision is the “why” in what the entrepreneur sees for his company.  It is the basic premise that helps define how what they are creating either solves a major problem or disrupts a market making it easier, safer or more convenient for a customer.  My standard example of the former is LinkedIn and the latter Zappos.  The value of being able to access currently employed individuals for new hire opportunities or provide easy access to shoes you might have to visit a half dozen stores to find was not lost on either of these creative company founders.  But, their original vision was not exactly on point.  They were both centered a bit more on their target communities and communication yet they were able to pivot to become market leaders.  While they let their companies evolve, they kept their vision (the “why”) clearly in the forefront.  By the way, my favorite read on this subject is Start with Why by Simon Sinek.

Passion on the other hand, is the fuel that allows an entrepreneur to continue to move forward despite the usual litany of obstacles (which usually center around people, money or a combination of both.). Passion is always among the top three (vision and perseverance are the other two) mentioned when describing admirable attributes of an entrepreneur. Note it is not just energy – energy is like gas and one can run out of fuel.  But, passion comes from the heart and as we all know (at least those of us who are living) the heart doesn’t stop.  It is this endless energy that helps entrepreneurs to survive; to outlast the elements and the trials and tribulations of the journey.  So, what is the problem?

Passion at times becomes the real or perceived reason to remain on a course when some solid objective evidence shows that maybe it is time to veer off the road for a bit. The famous “pivot” is difficult to achieve when one is passionate to a fault. Sometimes referred to as the “passion trap” an entrepreneur is lured into what becomes a death spiral because he fears a lack of passion will keep him from achieving his vision.  The world has changed but passion has blinded the entrepreneur’s perception of reality.  While there is no easy answer to this dilemma if you keep coming back to the “why” your vision will triumph and this will lead you to your ultimate goal.

Accelerators – A Valuable Spoke in the Wheel of the StartUp Ecosystem

Vinny Gambini: “And why not? What is positraction?”My-Cousin-Vinny-Poster

Mona Lisa Vito: “It’s a limited slip differential which distributes power equally to both the right and left tires.  The ’64 Skylark had a regular differential, which, anyone who’s been stuck in the mud in Alabama knows, you step on the gas, one tire spins, the other tire does nothing.”  Dialogue from movie My Cousin Vinnie.

Over the years, I have heard many people attempt to describe accelerators and when I do, I can’t help but recall this classic dialogue.  I wish what those people conveyed was as clear.  While I love the various elements of the NY Region StartUp ecosystem, one of the real gems is the great accelerators which have developed.  Withum is very proud to be associated as sponsors and mentors to a couple of the best (in my humble opinion) ERA in NY (the brainchild of Murat, Jonathan and Charlie) and TechLaunch in NJ (created by Mario Casabona.)  As great as they are, they still seem to be misunderstood, so I thought I would take some time to help clarify matters.

First, some background.  The concept of providing help to early stage companies goes back a good number of years.  When I was a manager at EY, (no computers then and yes, ledger sheets) I had the chance to serve Scholastic.  In a meeting with the then CEO M. R. Robinson, Sr. (Robbie) I was asked if we still had an incubator program. Apparently in the 30’s, the then Scholastic Magazines was an “incubator company.”  The typical incubator program was usually centered around a University and provided a few key elements to the fledgling entrepreneur including space at bargain prices, access to university resources (including valuable computer time) and sometimes help from a professor with appropriate subject matter expertise.  Incubators following these same concepts  still thrive today.

Today’s more advanced version of the incubator is called an accelerator and they grew out of some successes on the West Coast where a few additional important ingredients were added to the incubator formula including some program structure, mentors and financial support.  The overarching principle is culling from past successes to provide some best practices, people who had “been there and done that” and funds to provide a nurturing atmosphere where the next generation of entrepreneurs could grow at a fast pace, thus the concept of an accelerator.

Participating in an accelerator today is like a combination boot camp, executive program, reality show and internship all on steroids.  If you are admitted as a participant, you will have to be prepared to push your limits, get out of your comfort zone and absorb a great deal to accelerate your company to the next level.  Your peers in their own way will encourage and challenge you.  You will feel the need to succeed not because you are competing against others, but because you do not want to let them down.  Trust me, you will find all the support and guidance you need but what you do with it is up to you.  And, don’t be surprised if you need a “pivot” to get there.

The progress we have seen entrepreneurs make in advancing their companies in an accelerator environment has been nothing short of remarkable.  It can be a great experience for the right entrepreneur and team.  But, keep in mind, you and your team have to be ready to open your mind to new ways to accelerate the development of your business.