Have you ever had an idea for something you'd really like to do,
but then find a limitless list of lots of reasons why you couldn't do
it, why you shouldn't do it, or why you should just wait a while before
you do it? I've been struggling with giving birth to such a notion for
a while, and I think I'm finally ready to take the plunge and make it
Like many ideas, this one began easily enough. I was talking
with a local entrepreneur here in Boston about what finally made him
pull the proverbial trigger and step out on his own to start a
business. At the time, I had just begun to work with others like him to
try to share things that I had learned, to lend a helping hand, and to
provide a listening ear. (Humorously, as it turns out, the listening
ear was always the most valuable thing that I had to offer; it turns
out that you can get bad advice from just about anyone.)
Over the next few years, I asked the same question often, and
was often surprised by the answers. It turns out that there's a
surprisingly small gap between the decision to stay in a safe job and
the decision to go out on one's own to join a startup or even start a
new company of one's own. Often, it came down to a small incident, a
conversation overheard, a line from a movie or a presentation, or even
the proverbial coin toss.
That started me thinking: How many people are a hair's breadth
away from trying it? I was soon to find out. Since starting and
subsequently selling a company, I've spoken to countless people about
their own dreams - and often plans - of starting something new. Some of
the ideas and plans might be classified as "challenged", but I've been
surprised by how many are truly ingenious.
Following the thread to its logical conclusion, I started
asking people a simple question: "What's stopping you?" It turns out
that there are a lot of good reasons. For example, many people have
comfortable jobs that pay them far more than they could find anywhere
else; it's truly hard to walk away from a deal like that. I was
surprised though by how many bad reasons that there were, such as:
- I don't know how to write a business plan;
- I don't know how (or I don't have the necessary connections) to raise capital;
- I've never started a company;
- I didn't go to business school;
- I'm an engineer, not an entrepreneur or an executive.
So I set out to slay some of these dragons, and in the meantime a fun idea began to be crafted in my cranium. First the dragons:
I don't know how to write a business plan.
Don't ever buy the nonsense about a business plan. Yes, at some
point you'll need something written down as part of the process of
raising venture capital (assuming you go that route), but don't start
with a written business plan. Look, there is a name for people who
start by writing a business plan: business school students. If
you ever need to know which way it is to the university cafeteria,
those students may be the best people to follow, but please don't take
their advice on business until they've personally run a few into the
I've had venture capital partners tell me that they get four
hundred business plans each day. I'm going to put this as bluntly as I
can: When an investor pulls out their checkbook and asks you for your
business plan, make sure you have one. If the investor isn't pulling
out their checkbook, then their request for a business plan is simply a
way to stick you into a pool of things that they might look at some day
if nothing exciting is going on. Trust me, if they like your idea, your
widget, or your verbal plan, then they'll help you write a business
plan if they want your business.
Investors are much more interested in talking to you and
meeting your team than they are in yet another forty-page document with
a ten year revenue and hiring plan specified to the nth degree based on random quotes from Gartner.
Having a plan doesn't always mean that you've written one.
I don't know how to raise capital.
If you're going to start a business, then get used to the feeling of
not knowing exactly how to do your job. Every market, every company,
every year, every technology is different. No matter what you think you
know already, you will have to learn an astounding amount each day, and
even if you learn it all quickly, it's still not any guarantee of
Raising capital the "investor way" is actually a relatively simple process. I'll try to summarize it here:
- One or more investors become interested in what you are doing (or
more likely, what you convince them that you can do if they invest);
- You iterate through a few phases of writing plans and they lead you
to believe that you can get a good deal of capital without giving up
- The investors provide you with the actual contractual paper which
is written in an unparsable language from a different planet and you
sign with your blood.
Raising capital the "entrepreneur way" is a more difficult process, but I suggest that you try it. It goes something like this:
- Once you have your plan in your head, you start proving it out one
way or another. Prototype it. Build it. Preferably sell it, which is to
say that you find customers who are willing to give you money - even if
you haven't quite gotten around to building it yet.
- Start cultivating relationships with investors, but limit the time
that you allocate to a manageable level so that you can focus on your
business; ultimately, the investors are a means to an end, not the
- As soon as you have any revenue (read: customers), the investors will start finding you.
Most businesses suffer from a natural chicken-and-the-egg problem:
You need money to build something so you can sell it to customers so
you can get revenue so you have money so you can build that thing in
the first place. In the absence of absence of both the chicken and the
egg, you have to improvise. Can't get customers to pay for something
that doesn't exist? Use a prototype to get verbal commitments that they
would buy it if you had it. Find out how much they would actually be
willing to pay, and then assume they're lying because the half of them
that do end up buying it in the first couple years will pay only half
that - if you're lucky.
I've never started a company.
Yeah, no kidding. If you had, you wouldn't be reading this nonsense. Next!
I didn't go to business school.
I admit that I do wish that I had gone to business school, because
it probably would have helped me to avoid some stupid mistakes. Maybe a
whole bunch of stupid mistakes.
On the other hand, had I gone to business school, I probably would have been smart enough to not start my own company.
If it makes you feel any better, after you start getting some revenue you can always hire people that went to business school.
It's also comforting to know that when you're big and
successful, your university will give you an honorary business degree
in exchange for a new building.
I'm an engineer, not an entrepreneur or an executive.
People can't be convinced of something they choose not to believe,
so if you want to believe that you're not up to it, then I can't
convince you. On the other hand, in our high technology industry, most
of the entrepreneurs are engineers, nerds and geeks. Most startups are
built around a core of entrepreneurship that flows from the vision of
an engineer, a technologist, a coder, a geek. Where do you think
executives come from?
Great executives don't come from business school; they came
from the school of business, also known as the School of Hard Knocks.
Great entrepreneurs are a mixture of confidence and abject terror;
focused execution and chaos; incredible forward-looking vision and
There's only one way to find out, and the first step is a
doozy, which brings me back to my fun idea. I know first-hand that
there are tons of great ideas out there, just waiting to happen, and so
I started thinking of ways to push a few ideas over the proverbial
edge. Thanks to all the irrational doom and gloom about the economy,
it's a great time to be starting a company, before everyone else jumps
on the recovery wagon, and while you can hire great people at
reasonable rates, so I'm already feeling like the timer is running.
So here's how I'm going to pull this off:
- First, I have to trick people into sending me their really good
ideas, so that they actually have something to lose. Since I'm talking
about high technology startups, this is incredibly easy: I just need a
contest with some suitably expensive Apple product as a prize.
- Next, I evaluate the ideas, and pick the best one; the author wins the prize.
- Now comes the fun part: I let the author know that their idea is
legit - that they could actually make it happen. If they want to meet
investors, I'll introduce them. If they need some advice, I'll
introduce them to other entrepreneurs. I'll give them a limited period
of time, say 90 days, to actually start executing on their idea. If
they do, it's theirs, but if they don't ... I'll publish it so anyone
can run with it.
So is some expensive Apple gear worth it? There's no hidden agenda:
I'm going to use the value of your own idea as the leverage to make you
actually do something with it.
The fine print.
- To participate, send your idea - written as a publishable essay
explaining why it's a great business idea - to me:
- I have no financial interest in this. I don't want money if you get
bought. I don't want stock if you go public. No one is paying me to do
this or covering my expenses or otherwise behind this effort. Not even
- If you do start a company, I'm not looking for a job. I'm can't
promise any quality of service on advice either, since I'm always
behind on my own work (and my advice may suck).
- I'm not doing this to steal your idea. I have plenty of my own
crazy ideas, and I have my own work to do. If you don't trust me, don't
send me your idea, unless you think the expensive Apple gear is worth
- For this initial iteration, I'm going to limit the scope to the
U.S. because I'm not a lawyer nor do I want to talk to one. I also
won't accept entries from employees of my employer, since that would
probably violate something.
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