Community Colleges as Incubators of Innovation

 The world is changing in ways we could have never anticipated. Unlike the industrial revolutions of the past, the Fourth Industrial Revolution is advancing at a far greater pace than humankind has ever experienced. Given the advancement of technology, the new world of work, and changing job types that will require new skill sets, the need for all levels of society to be entrepreneurial has never been greater. Yet, our current educational models have not kept pace, with many schools keeping entrepreneurship at the perimeter of their curriculum and organizational strategy. It will require significant entrepreneurial leadership to reinvent the current educational model and create the entrepreneurial learning environments needed to cultivate an entrepreneurial mindset in academic leaders, faculty, and students in classrooms and across campuses.

In the World Economic Forum’s Educating the Next Wave of Entrepreneurs 2009 report, the Global Education Initiative Committee comments, “We believe entrepreneurial skills, attitudes, and behaviors can be learned, and that exposure to entrepreneurship education throughout an individual’s lifelong learning path… is imperative.” The report addresses entrepreneurship education in the broadest and most comprehensive manner at that time. The report goes on to state, “Not everyone needs to become an entrepreneur to benefit from entrepreneurship education, but all members of society need to be more entrepreneurial… We need to create the types of environments that are conducive to encouraging entrepreneurial ways of thinking and behaving.”

The report strongly emphasizes the need for entrepreneurship to be deeply embedded across college campuses and disciplines in order for all students and faculty to be exposed to entrepreneurship education, no matter their chosen path. To do so, the entrepreneurial mindset must be cultivated at the individual level focusing on the development of entrepreneurial attitudes, behaviors, and skills. This cultivation requires experiential learning and real engagement in the entrepreneurial process. It requires interaction with real world entrepreneurs, preferably local, to serve as socially relatable role models, a component of self-efficacy. And, it requires an entrepreneurial educator who acts as a facilitator guiding the entrepreneurial learning process so that the students take ownership of their learning.

Shifting Mindsets

The World Economic Forum details effective aspects of an entrepreneurship program, which should “focus on building self-confidence and self-efficacy as well as developing the practical skills necessary for students to initiate and pursue ideas, and provide them with experience in building the necessary teams around them to implement projects. Entrepreneurship education should not be limited to a focus on startups… but should be focused on shifting mindsets and developing skills which can be applied in many forms and entrepreneurial settings.”

The World Economic Forum offers several ways for institutions to inspire and strengthen entrepreneurial learning environments, including:

  1. Encourage all faculty of all disciplines to expose students to entrepreneurship at every level in a cross-disciplinary environment;
  2. Implement entrepreneurship education with an experiential learning model that also incorporates video case studies of real-world entrepreneurs as well as local entrepreneurs; and
  3. Build a pipeline of entrepreneurial educators through entrepreneurial training and education.

It is critical and ever-pressing that education heeds the call to move entrepreneurship from the perimeter to the core of the way it operates in order to remain relevant, as well as produce the entrepreneurial graduates needed for the future of society. To become an entrepreneurial institution, entrepreneurship must be a part of the organizational DNA, embedded in the institution’s vision, mission, and value system. Leadership must commit to leading with an entrepreneurial mindset and embracing entrepreneurship from the highest level in order to achieve success.

To learn more, read NACCE’s new book, Community Colleges as Incubators of Innovation, available on Amazon at https://www.amazon.com/Community-Colleges-Incubators-Innovation-Entrepreneurial/dp/1620368633.

Shark Says Veterans Make Great Entrepreneurs.

Daymond John, acclaimed business owner and investor, knows a thing or two about how to succeed in business.  John is the founder and CEO of hip-hop clothing company FUBU but is best known as “the People’s Shark” as an investor on the Disney-owned ABC smash hit reality show “Shark Tank”.

John is lending this time and taken to the Heroes to CEOs contest, hosted by Bob Evans Farms.  The competition is exclusively open to veteran entrepreneurs, and three finalist will be flown to New York to meet with John to give their pitch.  One grand prize winner will receive a $30,000 business grant, as well as an additional mentoring session with John.  U. S. Air Force veteran Charlynda Scales was a recipient last year and used the grant money to ramp up manufacturing for “Mutt’s Sauce”, an all-purpose, sweet and peppery tomato-based sauce from a recipe created by her grandfather, Charlie “Mutt” Ferrell Jr.

I spoke with John recently about the challenges veteran entrepreneurs face and what set them apart from their peers.  “This is the third time I’ve had the pleasure of working with Bob Evans Farms to celebrate veteran entrepreneurship”, John said.  “Each year, it reminds me of my passion and commitment to helping aspiring entrepreneurs by sharing my experience.”  John believe that while veterans have much to offer, many are reluctant to share their backgrounds.  “Some of them don’t want to tell people that they’re veterans, because for some reason other people think if they get into business with (veterans) or give them this opportunity, they may have some baggage that is not beneficial to the relationship,” John said.

Another difficulty many veterans face is overcoming an “others first” mindset.  “Veterans were taught  to think about everybody else and stand-in the line of fire for everybody else,” said John, “and sometimes they don’t think about what they need.”  An entrepreneur needs to be “a little bit selfish…to place themselves and their business first”.  This is one of the “small adjustments” veterans have to make “so they can grow their business better and be able to help more people,” he said.

…But also distinctive strengths -John noted a number of factors that make veterans ideally suited to be business owners and entrepreneurs.  “they come with a wide network of like-minded people they can reach out to'” John said.  “They also know how to complete tasks in a timely manner.”  He went on to say former military members have experience with navigating obstacles and overcoming them, which will come in handy as a business owner.

Tips for anyone trying to grow a business… -Some of John’s guidance for veterans is also sage advice for any budding entrepreneur, or even a seasoned business owner.  John said entrepreneurs need to draw on their “slack resources”, of those innate resources that everyone has.  If  you’re looking to start a business, “tap into the years experience you have and the network you have around you, because the money can come and go.”  John went on to say that money can at times be a hindrance, as people tend to “throw more money at something”, rather than addressing the cause of the problem.

Finally, John recommended using the skills of people within your network -what he called OPM-  other people’s manufacturing, manpower, mind power, or marketing.  “Tap into all the other resources you have, and don’t just depend on the money.

Veteran entrepreneurs can enter the Heroes to CEOs contest through March 20 by submitting a video sharing their business idea and a plan demonstrating a solid business concept through Bob Evans Farms.

Courtesy of USA Today, page 4B, Feb. 28, 2019

NOTE FROM EDITOR:  As an instructor for three years in the Veterans Florida Entrepreneurship Program in Tampa, I can attest to the fact vets make good entrepreneurs.  Not only are they trained in leadership, the work well in teams (backbone to startup), have mission persistence to overcome obstacles, and often a base retirement or saving to sustain the first year.

EDGEcon Florida, Small Business Conference

Every now and then your editor stumbles across a nugget that must be shared.  This past week was one.  Returning from Google Global Grind in Silicon Valley jet lagged, I arrived late to the annual EDGEcon 2019 in Sarasota FL sponsored by Dave Kauffman, small business counselor, radio host, and official Zig Ziglar trainer.  Wow…it was better than Google Grind!   Spot on our needs, it focused on small business marketing, office tracking, sales, procedures, relationships, and leadership.  Speakers were nationally known Darin Adams, Delattorro McNeal, Jessica Peterson, Charlyn Shelton, Jacob Salem, Lew Sterrett, other Ziegler trainers Brian Fanagan and Ellen Rohr, and the high-powered motivator Brian Forte (frequently shares a stage with Tony Robbins).  Not only was it well organized and timed, but, when it came to break-out sessions one could not make a decision because they were all so good.  The coup d etat was the final speaker, one Ron Klein.  When he finished with his simple message of opportunity all around us, we sat there spell-bound in unison.

Nicknamed “the Grandfather of Possibilities” Ron prefers the tag of “innovator”.  He is the inventor of the magnetic strip on credit cards, credit card validity checking system and developer of computerized systems for Real Estate (MLS) services, voice response for the banking industry and bond quotation and trade information for the New York Stock Exchange.  His message was to sell the benefits not the product, become a good listener, and to always be on the lookout for an opportunity.

The unlimited potential for entrepreneurs was apparent.  Ellen Rohr said to double what ever monetary goal you may have set for yourself since it is just as achievable.  Dave Kauffman host, answered this editor’s question about small business growth with this profound advice, “insource creativity and outsource productivity”.  Maria Andros shared her success using video to accelerate sales through a live video then posted as a recording.  Speaking about kindness in business, Charlyn Shelton suggested everyone watch the Daniel Pink 9-min video on the Science of Motivation -TED talk = https://www.youtube.com/watch?v=r_5kz2jNiJE.

The great ideas for growing a small business, for self-improvement, coaching, digital applications kept coming at us.  EDGEcon is a real  precious gold  event, and I would encourage everyone who reads this entrepreneurship blog to attend in 2020, Feb. 28 & 29th, a good time to visit Sarasota, Florida for a winter break.  I promise I will be there!

How to Pick Your Lead Product

You need to use metrics, not emotion, to decide.

I have worked in and around the biotech industry for 18 years. The last 6, I have focused on consulting projects for startups and smaller companies.

Given my background on Wall Street and the strategy work that I have done at some of the bigger companies. Almost every startup that hires me asks for the same thing. At least as a piece of the project. Whether they know they are asking for it or not.

Help us figure out which of our ideas should be our lead product.

Biotech is a specific industry. There are very high costs associated with developing every single product. Millions and millions of dollars. Often, fundraising will only support the development of one product to start. And investors are hesitant to fund a company that hasn’t picked a “lead horse.”

Most founders and entrepreneurs start a company with a bunch of ideas. But the founder or founders usually has one pet project. A favorite. An idea that he believes can change the world. But he can’t explain why on paper.

Often, it has a personal connection for him. The team disagrees on which product should receive most of the focus. But each one of them is basing the decision on what their “gut” tells them. And that’s where I come in.

Products in your industry may vary. But the concepts are the same. You need to understand the parameters around each product. And the value that each one brings. When you use the same metrics and compare them side-by-side. It allows for a non-emotional way to determine your path forward.

Here are some of the calculations that you need to do.

How many?

You need to come up with a realistic assessment of how many units you will sell. And not just this year. But for the next several years. Sometimes this involves figuring out how big a market could be that doesn’t yet exist. Other times, its about determining what is a realistic piece of an existing pie.

In my industry, it all revolves around prescription data. Looking at the prescriptions for all the other products that treat the same thing. Is the market growing? Is it declining? Why? Who else could launch in the same space, and when.

Take all the data you have right now. It could be very granular, it could be back-of-the-envelope. And figure out what the market units will be going forward. Not based on what you want the product to do. But what is likely.

How much?

There might not be anything out there like what you have. Or, you might be building a better mousetrap. Find out what everything costs. How much people are paying for it. And come up with a realistic price for your product. Will that price go up after launch? Will it come down? What typically happens in your market?

My industry also has gross-to-net pricing, due to complicated supply chains. But yours may not.

But your pricing analysis needs to be layered on top of your cost of goods. How much does it cost to make your product? Will it cost more or less as you scale? Your price should not dip below this — at least not for very long.

When can you launch?

Be realistic. Investors (especially venture capitalists) could think you don’t have a good handle on your business. If your timelines are too optimistic. With investors, its always better to “underpromise and overdeliver.”

I have seen so many startup founders underestimate launch timelines. This can have devastating effects on a business. Especially one that is not flush with cash. Take some time with this one.

What’s the upfront investment?

This is a big one in biotech because it can be millions of dollars. So the product needs to cover its own costs after a certain period of time.

Make sure you have planned out exactly how much you’ll need for a product to launch. Marketing, sales, research and development. Will you need to hire more people? If your product nets $1M of revenues in the first year but costs $2M to launch, you need to know that in advance and plan for it.

Put It All Together

I use a Net Present Value (NPV) analysis. It puts all this information together and gives the current “value” of the product. Other people or industries might use an Internal Rate of Return (IRR). I won’t go into detail about NPV, but the Harvard Business Review published a concise summary about it here. There is also an NPV function in Excel.

Bottom line, an NPV tells you the value of each product today. How much value each one could bring to the company. So when you compare them side-by-side. You are looking at one number for each product. And it is usually pretty clear which one stands out as the biggest opportunity.

Compare Them All And Make A Decision

It isn’t romantic or exciting to make a decision this way. I have received a lot of pushback about the results from Founders. They want their baby to be the best one on paper. But it isn’t always the case. Sometimes the Founder still picks his favorite as the lead product. But is able to tweak some things in the plan. To make it more workable, more profitable, more valuable.

Sometimes, the cold hard facts (plus a push from potential investors) are enough to sway the path. No matter what the outcome. You company will be on a much better path to success with this analysis.

Startups and entrepreneurship already come with a fair amount of drama. Emotions run high. There is a lot at stake. Try to take some of the drama out of this big, important decision. Use metrics, not emotion. Your company will be all the better for it.

 

How To Measure Success At Different Stages Of A Startup

Building a startup is a bit like building a relationship.

When something feels really difficult — you’re trying to make it work, but you just can’t — it’s a sign something is wrong.In a relationship, this usually means the person isn’t right for you. In a startup, any number of things could be keeping you from success. It’s tough, I know. It took our team almost two years to figure out product-market fit. We spent so much time testing, over and over again, but nothing was working.

Yet once the right fit falls into place, what you thought was hard suddenly becomes easy. 

There are still bumps in the road, but as your momentum builds, you begin to see the light at the end of the tunnel — success.

Unfortunately, that never lasts for too long. In fact, as you grow, you have to continuously redefine success if you want to keep developing and scaling your business.

This is how to think about achievement as your startup grows:

An early-stage startup finds success when product-market fit happens.

Being successful in the early days of your startup is about customers and revenue. You’re always looking at the metrics, trying to improve results.

Once you find product-market fit, the gears start turning a little smoother. You understand profitability, you understand your business model, and you finally know who your customers are.

Until that point, you need a team that thrives on uncertainty and relishes the opportunity to try new things and iterate.

One of the things we tried in the early days of ThirdLove, one that’s continued all the way to this day, is our Try Before You Buy program. A woman can order a bra, and if she doesn’t like it, she can send it back within 30 days. It sounds great, but when we started this program, the company was 15 people. Total.

So, boxes of bras would come back to us, and we had to determine if they had been worn — and needed to be donated — or if they were being returned new and could be added back to our inventory.

It was all hands on deck.

Every person on the team (even engineering) helped sort the bras. Opening boxes, filling out forms, checking it on the computer — it was all done by hand. That’s obviously not scalable, but it’s the type of thing that has to happen when you’re figuring out the basics of your business.

In the early stages, success is completely uncertain and unpredictable.

You have to keep people motivated, even when they’re knee-deep in returned product. You need the mentality of, “We know we’re going to figure this out. We just have to keep working on it, taking baby steps, and making progress.”

There are ways to communicate that attitude to your team, like celebrating little victories in major ways. I can still remember when we were featured in the magazine InStyle. It felt like a huge success — and for a 15-person startup, it was.

As your company grows, success shifts to connecting your brand strategy with your customers.

After finding product-market fit, you finally have time to focus on scaling.

As you do, success becomes more about larger, strategic initiatives. You begin to view success in terms of, “How do people talk about the company? What does the brand mean to them? What is our image?”

You can find these answers in many different ways. For instance, I was recently at an event where the bartender recognized ThirdLove from my name tag — and as it turned out, she’s a customer. I ended up spending 15 minutes talking to her about all the different bras she’d bought and how she felt about them. To me, that’s success at a late-stage startup.

But being successful goes beyond your customers.

The way you motivate your team and inform them of your strategy also changes as you grow. Your job becomes more about making sure everyone is on the same page and aligned with the company’s goals.

Tactically, there are more company update meetings and weekly emails that need to go out. Functional leaders have to communicate with the entire company about what they’re working on and how daily tasks fit into larger goals. The distribution of information becomes vastly more important as you scale.

Just remember, almost everything you’re doing today will likely change within one year. So you always have to adjust how you’re motivating your team and defining success. Because you can’t simply set it, forget it, and achieve it.

By Heidi Zak, Entrepreneur’s Handbook

The Most Important Thing To Know To Make Entrepreneurial Ideas Into Hits

I call it the unifying principle of entrepreneurship. Whether you’re selling software or sausage, offering consulting services or dreaming up the next Uber, it’s the single most important thing you need to know to succeed. It’s not the only thing, but forget it and you are likely to face almost certain failure.

Three essential truths

Why “unifying”? Because this fundamental principle encapsulates three essential truths about entrepreneurship.

First, it describes the earliest and most basic form of all entrepreneurship—barter, as when our ancient ancestors might trade warmth-producing animal fur for grain, making each of the parties to the trade happy. Such trade is at its core the entrepreneurial transaction, whether you’re trading real estate, products, or services. Often today’s more complex entrepreneurship terminology—phrases like “value proposition” and “product market fit”—can obscure this fundamental truth.

Second, this unifying principle of entrepreneurship conveys the fundamental fact that emotions drive transactions. The positive emotions associated with acquiring a product or service must be big enough to overcome the negative emotions associated with handing over money (which is referred to as the endowment bias). Remember, too, that someone who said they like something you do or make may not like it enough to actually want to part with their money to buy it.

Third, understanding the emotional state of your customer pre- and post-sale is critical. The jargon of value propositions causes many businesses and entrepreneurs to neglect monitoring or measuring the emotive responses of customers, yet those responses will largely determine whether they’ll buy the product or service in the first place and come back for more later.

Some of the most famous entrepreneurs in history certainly understood this principle and its underlying truths. Sam Walton’s success is often attributed to his ability to relentlessly squeeze out operational inefficiencies so he could undercut the competition, but the real secret of success was his unflagging determination to make customers happy. Every Saturday for 45 years he met with his managers to share ideas about how to make customers not just happy, but happier.

Similarly, Steve Jobs is often remembered for his disdain for focus groups and the like. But in the early days of Apple he spent countless hours observing how people used the Apple I inside the shops where they were first offered. That’s how the company came to include keyboard, TV driver, cassette interface and BASIC software in the Apple II.

The hundreds of thousands of people who start businesses each year and through patience and hard work build them into successful enterprises understand this fundamental principle as well. These “bedrock entrepreneurs,” as I call them, don’t make the headlines, but they do make people happy. I’ve spent the past several years talking to many of these bedrock founders, watching them at work, getting to know them, and discussing their motivations and their aspirations. Most of them started with next to nothing and created enterprises that made countless people happy and better off.

When forgetting can be fatal

This principle is so simple that it should go without saying, no? But it’s surprising how many entrepreneurs fail to fully grasp it, lose sight of it, or conclude that it doesn’t apply to them. And it’s doubly surprising that many of them make this mistake when they can least afford to—in the earliest phase of their startup. That’s when they’re likely to find that few people are interested in the product or service as it was originally conceived.

Rejection of a cherished idea can hurt, especially when you’ve just spent enormous amounts of time and risked your personal finances trying to get a company off the ground. Nevertheless, you must figure out what part of your original idea is worth saving and what part you must jettison. It’s the first big test you are likely to face as an entrepreneur.

It’s not easy. You may feel anxious and disoriented. You may feel that you’ve lost control. You will certainly find change exhausting: you must work through the many possibilities, from simple tweaks to extreme makeovers, to figure out how to deliver something valuable that people will happily give you money for. You must find and contact many potential customers to validate your changes. You will need to alter your prototype, or your service description, or your specifications, or your website, over and over as your idea evolves. This is an enormous amount of work, and it’s emotionally draining.

Unfortunately, instead of staying tightly focused on customer validation, many entrepreneurs pour enormous energy into devising a business plan. That is perhaps the most common mistake startup leaders make in the early stages. You cannot have a meaningful business plan until you know what customers want.

Entrepreneurial success is not nearly as complicated or as out of reach as it is sometimes made out to be. While some businesses need to be complex and all businesses become more complex as they grow, the fundamental principle of entrepreneurship is simple and straightforward. You do not need to be brilliant and technically savvy to be a successful entrepreneur. But you do need to ask yourself how badly you want to make other people happy.

From Forbes online Sept. 24, 2018 by Derek Lidow 

Those Courageous Souls, the Entrepreneurs.

Now no one disputes that all economic systems reflect the intrinsic self-concern of human beings. But only capitalism creates a group of people, known as entrepreneurs, who have no choice but to concern themselves with the needs and desires of others. These others are their customers.

Few economists, however, actually study the behavior of these entrepreneurs, the creative leaders of capitalist businesses. If they did, they would discover that entrepreneurs by the very nature of what they do must shun greed.

First and foremost, responding to others is the very opposite of greed.

Second, greed, in the economic sphere, is normally expressed as the immediate consumption of goods and services. I grab what I can without regard for others. But entrepreneurs must begin by saving, which is defined as forgoing consumption to achieve long-term goals. Often it takes months, sometimes many years to bring a new product or service to market.

Furthermore, entrepreneurs must collaborate with others, building teams to achieve their aims. In designing their goods and services, they must — once again — focus not on their own needs but on the needs of others. This, too, is the opposite of greed.

So, what entrepreneurs do when they seek profit is far more than self-interest. Rather, profit is a measure of how well a company has served others. Under capitalism, a business prospers only if customers voluntarily trade for its output.

And it’s only by improving its service to others that a business can thrive and grow. If the entrepreneur pursues his own interests first and his customers’ interests second, his business will fail. And sooner or later an altruistic entrepreneur will surpass him. 

Capitalism at its essence, then, is a competition of giving. Of course, self-interest is involved. But the genius of capitalism, and only capitalism, is that it channels self-interest into altruism. Entrepreneurs can only help themselves by helping others.

All those who have started a business, and made great sacrifices to do so, know the drama of that first day: does the world want what I have to give? Whether it’s an immigrant opening a beauty salon or Steve Jobs selling an Apple Computer, success is far from guaranteed. In fact, it’s just the opposite.

Those courageous souls, the entrepreneurs who are the beating heart of capitalism, who bring us the endless material benefits we enjoy from ATM machines to life saving medicines — should be held up for admiration, not torn down.

Altruism is the very reason for capitalism’s existence and why it remains the hope of civilization.

I’m George Gilder for Prager University.

The Difference Between Innovators and Entrepreneurs

I just received a thank-you note from a student who attended a fireside chat I held at the ranch. Something I said seemed to inspire her:  “I always thought you needed to be innovative, original to be an entrepreneur. Now I have a different perception. Entrepreneurs are the ones that make things happen. (That) takes focus, diligence, discipline, flexibility and perseverance. They can take an innovative idea and make it impactful. … successful entrepreneurs are also ones who take challenges in stride, adapt and adjust plans to accommodate whatever problems do come up.”

Over the last decade I’ve watched hundreds of my engineering students as well as ~1,500 of the country’s best scientists in the National Science Foundation Innovation Corps, cycle through the latest trends in startups:

  • social media
  • new materials
  • big data
  • medical devices
  • diagnostics
  • digital health
  • therapeutics
  • drones
  • robotics
  • bitcoin
  • machine learning
  • etc.

Some of these world-class innovators get recruited by large companies like professional athletes, with paychecks to match. Others join startups to strike out on their own.

What I’ve noticed is that it’s rare that the smartest technical innovator is the most successful entrepreneur.

Being a domain expert in a technology field rarely makes you competent in commerce. Building a company takes very different skills than building a neural net in Python or decentralized blockchain apps in Ethereum.

Nothing makes me happier than to see my students getting great grades (and as they can tell you, I make them work very hard for them). But I remind them that customers don’t ask for your transcript. Until we start giving grades for resiliency, curiosity, agility, resourcefulness, pattern recognition, tenacity, and having a passion for products and customers great grades and successful entrepreneurs have at best a zero correlation (and anecdotal evidence suggests that the correlation may actually be negative.)

Most great technology startups — Oracle, Microsoft, Apple, Amazon, Tesla — were built by a team led by an entrepreneur.

It doesn’t mean that if you have technical skills you can’t build a successful company. It does mean that success in building a company that scales depends on finding product/market fit, enough customers, enough financing, enough great employees, distribution channels, etc. These are entrepreneurial skills you need to rapidly acquire or find a co-founder who already has them.

Lessons Learned

  • Entrepreneurship is a calling, not a job.
  • A calling is something you feel you need to follow, it gives you direction and purpose but no guarantee of a paycheck.
  • It’s what allows you to create a missionary zeal to recruit others, get customers to buy into a vision and gets VC’s to finance a set of slides.
  • It’s what makes you get up and do it again when customers say no, when investors laugh at your idea or when your rocket fails to make it to space.

Go to the profile of Steve Blank  by Steve Blank  in  

You Tube – https://www.youtube.com/watch?v=peX6wNbZrgQ

The First Twelve Months

So, you’re thinking of doing a startup? You’ve got an amazing idea, you’ve done your research, you’ve talked to friends, and you’ve found the passion. What’s next? Well, regardless of how successful you and your startup will be 12 months from now, one thing is for sure, it will be a great learning experience. This reminds me of what my manager at Google once said to me:

“Every time someone tells me it was a great learning experience, I had lost time or money.”

This post contains a few lessons I learned in the first year of launching my startup, and I hope that by reading and understanding these lessons, I can save you time, or money, or hopefully both.

People

Companies are people. The best people, together, make a great company. The most important decision you’ll make is finding a great co-founder. Until you have one, you don’t have a company. Finding a great co-founder is like finding a best-friend who is very different from you. To find one, you can’t go around asking people to be your best-friend; you’ll need time to pass and experiences to go through together to meet someone like that. Right before I left my job to start Employ, my manager told me:

“Find someone who is not you…and someone who can do what you can’t do.”

Simple, but effective. I met with over thirty potential co-founders and was very lucky and found a great partner in this adventure and have never looked back. We bring different skills to the table, agree on a million things, and also disagree with each other but with utmost respect, always coming to a conclusion that is based on reason and fact. I have a 100 potential ideas that I can work on in the future, I’ll do 101 with my co-founder Amsul.

Beyond your co-founder, your first 10 employees will define who you’ll be as a company. One lesson we learned very early is that it’s hard to hire good people, but it’s even harder to fire bad ones. To do this, make sure you never hire someone who is not all-in; don’t hire any part-timers, people who don’t have full conviction in the mission and are in it for the wrong reason (money, equity, title, etc.). But we all make mistakes, not just as founders, but also as employees when we choose the wrong role or company. If you find yourself with a team member who isn’t the right fit for your company, part ways immediately. Another important lesson from one of my previous managers:

“My biggest mistake is that I didn’t let go of people early and fast enough.”

It is the right thing to do for everyone. But, when you do take this decision, do it with empathy and help them find not only their next role, but the right next role for them.

Second, make sure you’re diverse from day 1. You have no brand, no pedigree, how can you prioritize diversity over execution? This is why it will be hard, very hard. As a new company with depleting resources, your goal is to hire the best-skilled person who can do the job, but now you also need to keep diversity in mind. The truth is, there is a very high chance you will end up with a bunch of men who all look the same. My challenge to you is to try your best to not end up like that, find people with different perspectives, different experiences, and even hiring smart people who can be trained quickly to take on the challenges, that’s the goal. Even if you don’t achieve full diversity in the first 10 hires, with this goal in mind, you will by the time you reach the first 100. If you don’t have this top of your mind, it will be close to impossible later and you will pay for it.

While running a startup, you’ll be making a ton of decisions every day, and each of your decisions has a massive impact on not only your company and the product, but most importantly your people. A bad decision today can easily result in good people losing their jobs down the road. It is on you to make sure you are doing your very best to make the right decision, don’t take this lightly. To do this, I highly recommend you to spend more time thinking deep and hard about every decision, and once you’ve made it, act on it quickly. High velocity pivots and decisions are important to execute on in a startup, but the wrong and ill-advised ones will be fatal.

Hence, take care of your people. Your people are the company; without them, there is no product, there are no customers, there is no company. Spend time with them regularly to get to know them, to understand their concerns, hear their ideas, and make sure they have your ear. Without them, without them at their 100%, your startup is guaranteed to fail.

Product

After the team, the product is the most important part of your company. We all have ideas, cool features that we want to implement using the latest tech, I would highly suggest you avoid getting distracted by this. Instead of creating a Swiss Army knife, create a really sharp blade with a good grip. The core product and experience is the most important, the rest is just fluff. Once you’ve perfected the core product and experience, the remaining bells and whistles will be easy to add. To get the core experience as close to perfect as possible, conduct a beta or customer surveys as soon as possible. This is the best way to continuously find out what customers need vs. want, what they love vs. don’t care about, and what needs to be fixed vs. patched later. Constant communication with your true customers will define your priorities and allow you to filter out the noise.

Second, out of all of your employees, the most critical are your product and engineering teams. Make sure to hire the best and motivate them with the right reward. This isn’t always money or equity, many times it can actually be the right problem for them to solve and the right mission. Convince and motivate the best people you can find to solve the hardest problems, these are the challenges that excite people the most. Related to this point, never, ever, outsource your product development. Outsourcing core product to a third-party will always result in one step forward and two steps back. Your product is your child, no one will take better care of it and be genuinely passionate about its success than yourself, do not outsource its care and development.

Also, don’t let stresses and issues related to regulatory and paperwork distract you from the product. Issues like how will I register the business? How will I get a work permit? Do we need to get a lawyer and get a trademark? These are all important questions, but not for your first 12 months. Your first twelve months need to be focused entirely on the product and the core experience.

Lastly, customers are the signal, competition is the noise. This is a very important principle in your first year as a founder, later on in the life of a company I am sure it will be different. But in the beginning, focus your product on your customers and solving a problem for them and listening to them; do not worry about what the competition is doing, how they are copying your features, how they are taking market share, etc. None of that matters if you can’t please the customers that are in your court. Remain laser-focused on your share of the market and improving the experience in that share. Don’t worry about the size of the pie and who’s eating from it, focus on your slice and make sure it’s damn tasty.

Customers

Once you have a product or an MVP, you’ll need customers. As a new startup, one of the most important lessons we learned is that not all customers are true customers. Similar to how not all of your friends are best-friends, most are just acquaintances, same goes for customers. The real and true customers are those who give something up for your product and services; either they pay you for your services, or they replace an existing solution with your product, these are the true customer that you need to be focused on. Everyone else is just an acquaintance and you can consider them as noise in your first year. These non-customers or fake customers will only distract and detract you from your core mission. Avoid them at all costs.

Once you’ve identified your true customers, you’ll need to sell your product to them and make them believers. With most products and services, excluding some hardware startups I would say, you’ll need to sell the future, not the present. Our strategy for selling our product is this: provide the steak first, then the knife, and finally the fork. Especially in software startups, you never have a complete product, there are always additional and pending features to be added. But as long as you have an amazing core experience, the steak in this case, get it on the customer’s plate so they can start eating it while promising them a knife in the near future. Then, a few months later, provide them the knife and promise them a fork coming very soon. Finally, provide them the fork as promised. This strategy allowed us to have a constant dialogue with our customers and in real-time identify and analyze their most important needs.

Finally, be careful when hugging big trees. Meaning, it’s easy to get excited about a big customer who wants to buy your product, but it can also drain your resources and focus too much of your limited time and horsepower towards one client’s needs vs. the broader market. In your first 12 months, be very selective and focused in acquiring a handful of customers in a single geography to really identify the problems faced by the market as a whole and nailing down the core experience and solution. Once you’ve figured that out, expanding and scaling will come easy.

(more…)

Complete Lean Entrepreneurship Guide

New Lean Entrepreneurship Chart

After a couple of years in the making, the badly needed Lean Entrepreneurship Guide has been published. It will be introduced at the upcoming entrepreneurship organization conference, the USASBE, in St. Petersburg, FL January 23-26. A six-page, laminated chart, the guide summarizes all 15 methods of evidenced-based, lean startup planning. It features the Steve Blank Lean Launch Pad method, but also has two engineering school methods, a complete glossary, a detailed lean course outline, and an explanation of the customer development process.

The evidenced-based, idea validation way of planning is the most important change to entrepreneurship education in fifty years. It comes out of Silicon Valley where their new internet platform required a different way to do startup than a traditional business plan. It has evolved over a decade with various refinements and adaptions. Absorption of some ten books is now required to grasp the meaning of lean startup. This guide is the first real summary of all methods and the strategies. Students, aspiring entrepreneurs, and government entities can use the guide to train the one method that guarantees success or failure before scaling or risking large sums of capital.

It’s purpose is to answer two questions. Not “can this product be built”, but “should this product be built” and “can we build a sustainable business around this product or service”? To answer these questions the user engages in a customer development process using a one-page diagram called the business model canvas (BMC). Its nine component sections force a thorough analysis of the idea by diving deep into the mind and persona of the end-user or target buyer. The nine BMC sections are value proposition, customer segments, channels, customer relationships, revenue streams, key activities, key resources, key partnerships, and cost structure. A key to the process is the relationship between the first two components, the value proposition and its customer segments. Get this “product-market fit” right, and the remainder canvas sections become easier to complete.

Entrepreneurs know before spending precious capital and before making the decision to scale or hire employees whether their idea for concept is a “go” or a “no go”. You can imagine how meaningful this insight can be. Under the obsolete traditional business plan, a planner might spend a year and a half doing secondary research, arriving at assumptions based on guesses. Under lean the same planner reaches facts based on customer inputs and establishes a market demand ahead of time.

Why is this change so important? Never has there been a greater need to empower adult workers. Our entire employment structure is undergoing a fundamental change. Anything that can be repeated is being automated. For example, most cars today are manufactured by robots. At the same time the Gig Economy has transformed employees from salaried to independent contractors. Intuit predicts that by 2020 40% of American workers will be independent contractors. And, the ability of computers to learn and think using large-scale data (called “deep learning”) has taken artificial intelligence to new levels. As the “machines” learn to think they are actually replacing white-collar as well as blue-collar workers.

What is so great about lean entrepreneurship is workforce centers, economic development bodies in addition to academic institutions can now successfully teach entrepreneurship. Studies confirm it can be taught and learn and now effectively thanks to evidenced-based and customer validation planning. This new guide contains all the ways of doing its process. In addition to detailed actions, it contains every known resource, the history of “lean”, various options for analytical canvases, ways to increase opportunity recognition, the principles of effectuation (decision-making factors expert entrepreneurs used), and other important model discovery books. Most significantly, there is a detailed Understanding Lean Startup course that can be adapted for personal use.

The Lean Entrepreneurship Guide can help displaced employees start a business in a field they embrace, it can advance technology, improve existing procedures and products, and solve many problems. Moreover it can help society by raising standards of living, bring solutions to environmental concerns, and grow third world economies to stem unemployment. In short this publication is a game changer!

On Amazon at https://www.amazon.com/dp/1423242017.