entrepreneurship

Advice From Rock Start Investors

Wsj tech cafe for blogLast night, my son, Matt, and I attended the Wall Street Journal Tech Café event at Think Coffee in New York and learned about how tech investors think from three of the greatest.  Here are a few nuggets on how to approach and pitch to investors…

Steve Case , uber entrepreneur, investor and philanthropist, advised that you should do a little research before you approach an investor and get to know his sweet spots.  Every investor has his own criteria, so for example, Steve invests in later stage start ups and generally in big ideas or platforms, rarely in products or features.    His main criteria for investing in a company:  people, passion and persistence.

Jay Samit , a top gun in LA, says, know your stuff! Too many entrepreneurs come to the pitch unprepared and unable to handle Jay (the typical investor in my experience), who gets impatient after about the second slide and shifts from presentation mode to Q&A. He also emphasized people—surround yourself with great people (a typical theme on this blog).  He hit home for me by stating that those closest to you should invest, endorse and support you on your startup; if they don’t, there is something wrong with the picture.

Brian Cohen, the mayor of Angels, says “make the Angel fall in love with you”.  Angels aren’t in it for the big win as much as to save the world, and their investment is much more emotional. Also, get them to say NO. Nobody likes to say no, so force the question and get a no (or yes) answer.  Finally, be coachable.  All startup investors offer much more than money; you need to be able to take their criticism and coaching.

Thank you, Brian, Jay and Steve and thanks to the Wall Street Journal—always my favorite news venue—for hosting this insightful event.  It came at the perfect time for me, as I have just lined up my initial friends and family capital and am looking for angels to help me launch Café Learn (more on that later….)

Keep It Simple

I recently had an entrepreneurial wake-up call!!  We conducted a focus group with academic leaders and they didn’t quite “get” our business.  After some probing, it turns out that they saw a need for the business, but the message was just too complicated. We were trying to do too much, and to be too many things for too many people.  What a valuable reminder to Keep It Simple.  Luckily, we learned this lesson before we spent a penny on designing the product!

David Pogue, New York Times tech columnist, and my former neighbor, did a great and timeless TED Talk, Simplicity Sells, several years back:

Too often, in the market development work that O’Donnell Learn does for companies, this lesson comes very late—after a product is built, and a product that has too many bells and whistles for its average user.

Many companies expand into new verticals before they have really nailed the first one.  We worked with a company a few years back that had a strong line of business education products.  Before they built market share in that area, they had expanded into science, social science and allied health.  Guess what?  They never got enough bench strength in any one area to solidify their business model.

Business model! That is what keeping it simple is all about.  Use your simplicity to experiment with your business model.  Figure how you are going to make money and how this will be a long-term sustainable business.  Build some market share—and then you can get complicated.  Or can you? David Pogue would say no, “simplicity sells”.

In the next few posts, we are going to explore the notion of building a business.

Time Flies!

In early May, I will be speaking at the SIIA Ed Tech Industry Summit about the opportunities and challenges that innovators and entrepreneurs face.  And, one of my topics will be that time flies!!  Bringing innovation into educational markets is hard work, and there is way more to do than there are hours in the day.

This past month, I have created pieces of my business plan, financial projections, a website, overviews of the company, and a concept video. I have traveled nearly half the time meeting customers, partners, advisors, investors, developers and my team. I have worn more hats than I can imagine.  I haven’t managed to cross everything off my list in months.  And, Carrieonfire.com has suffered from this flight of time!

Here is what I do when time is flying (and spinning out of control!):

  • Focus on the 2-3 critical success factors for your company today, and give yourself milestones with due dates for these priorities.  For me, it’s setting up pilots and seed funding.  I know what I need to accomplish and when.
  • Take things off your list.  You can’t do everything, but it is better to delegate or postpone than to regret that you failed to complete something critical. Jim Collins, one of my favorite leadership gurus, argues that we all need a “stop-doing” list, because we have too many projects and initiatives.  Isn’t that the truth!
  • Build a team that is GREAT and brings the expertise, skills and passion for things that aren’t your forte.  If you don’t have a lot of money to hire people (most of us don’t), your team can include partners, advisors, potential and current vendors, and friends and family.
  • Take a day off every week.  Starting a company is grueling work, and you need to get away from it or you will burn out. About 10 years ago, I learned this the hard way when I landed in the hospital and spent 3 months recovering my health.  Even when I am swamped, I try to take off one day a week.  And, I find time every day to clear my head.  I exercise or practice yoga nearly every day, and I take walks with my dog, Luna.
  • Give yourself a break when you fail or fall behind.  You are only human.  And, you know that every successful entrepreneur encounters many pitfalls along the way.  You will be a lot less stressed and more effective if you  acknowledge your failure to get something done or that big SNAFU and let it go so that you can move on.

Get The Right People On The Bus

I’m a fan of Jim Collins, who has spent years studying and writing about great companies; his most recent book is Great By Choice. One of his enduring principles is to get the right people on the bus, which he describes in this video:

As an entrepreneur, you are always cash-strapped, so sometimes you think it’s better to focus on hiring lower cost people. I can tell from hard-earned experience that it is critical that you surround yourself by GREAT people, and then figure out how you can afford them. A few things I have learned:

  1. Don’t hire clones. One of you is enough. You need to surround yourself with people who think differently and who are going to challenge your thinking. It is also really important to foster diversity in your company—age, race, gender, etc.
  2. Hire people who want a challenge and aren’t afraid to roll up their sleeves and dig in. In a startup, every person has to pull more than their weight. You don’t have extra support people, so you need to hire people who are willing to wash the coffee mugs, then build a bullet-proof budget, and then meet with clients. Wow, that is a rare person. It takes resilience and a zest for trying new things.
  3. If someone isn’t working out, part quickly, and be fair about it.
  4. Beware of the pigpen effect. Over the years, I have hired a number of people with this effect: they spend an awful lot of time working (routing around in the muck), dust is swirling, but nothing ever seems to get done. Sometimes, they are hard to spot, because they are generally hard workers—so remember point number 3 above.
  5. Pedigree is less important than flexibility in a startup. I have seen a lot of entrepreneurs hire people with very impressive big corporate resumes who didn’t know the first thing about how to get things done in an unstructured startup environment. So, probe carefully to gauge someone’s ability to be flexible and agile.
  6. Hire people who are smarter and better than you are. You will never go wrong by hiring people who are GREAT in areas that you are weak! One of the first things an entrepreneur learns is that nobody is competent at everything, so you need to figure out what you aren’t good at and hire people who will fill in these gaps.

Finally, it’s important to have some fun in life. I like it best when some of the folks on my team are whacky, off-beat and just plain fun. Life is too short, and when the going gets tough, the tough get off the bus for an hour and have some fun.

What’s Hot? What’s Not?

This week, three leaders in higher education told me that my new company idea is incredibly timely.  Wow!  It sounds like I have landed on something that is hot!

Being in the hot zone is no accident.  You don’t get there because you sit around a conference table and come up with the next big idea.  And, you don’t get there by falling in love with your product.  It takes hard work and persistence to have the three conversations that I had this week.  I have been working on my business idea for over a year.  I have invested a lot of time and money in determining what’s hot, and what’s not.  In countless discussions with trusted advisors and potential customers, I shaped my concept to fit the incredibly timely need.  And, I haven’t even begun to build the product yet.

Some of the things that you can do to make sure you are in the hot zone with your new business…

  • Get involved in an industry association.  I joined SIIA, an organization that has a big focus on educational technology.  And, I got involved in the organization, attending local meetings, joining a committee, mentoring and judging for their ed tech incubator.  This gives me regular access to other start ups and to see what they are up to.
  • Attend conferences.  In the past two months, I went to LearnLaunch in Boston and SXSWEdu in Austin.  Next month, it’s the Arizona State GSV Education Innovation Summit and then the SIIA Ed Tech Industry Summit.  While expensive, conferences provide you with unique access to other entrepreneurs, legacy companies that are interested in innovation, potential customers and investors.  Where else can you get all that access packed into a 2 or 3 day experience?
  • Conduct interviews with potential customers.  This is critical.  Visit customers.  Get them on the phone.  Listen to their needs, their pain points, and their reactions to your solution.  Record the interviews so that you can capture it all in their words.
  • Secondary research.  And more secondary research.  I spend hours every week trying to keep abreast of the trends, industry reports, and following the money in my industry (who’s buying or investing in what and how much).  I try to get my hands on whatever reports and information that I can.  Some leading providers of reports and analysis include Outsell, Simba and Eduventures. Media to read: Inside Higher Ed and Chronicle of Higher Ed and Edsurge.  There are also a ton of reports and government sites, depending on what you are looking for. For example, I always read the National Study for Student Engagement. If you regularly scan the media, you will hear about them as they are published each year.  Finally, check out the sites of the big industry players.  They often publish studies or white papers that can help you. For instance, my company, O’Donnell Learn, just published a study with Blackboard on Faculty Progression to Digital.

Get ready to roll up your sleeves.  This is hard work.  But, you have to put in the time to be sure you are HOT!!