If you have a great big idea and know that it might be of interest to a larger company, consider approaching a few companies about a joint venture. You will definitely want a lawyer involved in negotiating these kinds of deals to protect yourself. A lot of JVPs end poorly, so you want to be prepared for a breakup even if you are head-over-heels in love in the honeymoon phase.
The key with a JVP like this is to retain as much creative, design, pricing and branding control as possible. The JVP you want would allow you to continue to control the development, marketing, and pivoting of the product as necessary without having the larger partner slow you down.
#8: Take over an existing business
Not a lot of people think about this as a way to become a small business owner. There are a lot of entrepreneurs out there who run successful small business but might be ready to retire and hand the business over to someone else.
You would go to work for the entrepreneur as a general manager or similar role while they retain complete control of the company and ownership. But over time you take more and more of the ownership and control of the company until you are the majority (or sole) owner of the business. This transition is typically handled in the form of a long-term buyout (where you pay cash for shares over a period of years) or through measurements in how you have grown the business.
The SBA actually has a halfway decent guide for this process. In the end every deal will be different but generally speaking this is a great way to become a business owner without having to go through the startup process.
From the Author
There are a lot of other important questions that need to be asked and answered before starting a company. With Soldier to Startup, my goal is to compile all of those questions, give as many answers as I can, and help as many veterans start and run their own businesses. To learn more about how to fund your startup along with a lot of other great advice, examples, and resources, visit our site at www.soldiertostartup.com, join us in our Facebook group at www.facebook.com/soldiertostartup and follow us on Twitter @soldier2startup.
Building a Startup Empire
By Kriti Vichare
"Rome wasn't built in a day either..."
I first saw this unapologetic declaration on a billboard sign on a highway that is perennially under construction. And it always reminds me that startups have to be treated the same way.
Entrepreneurs and wantrepreneurs approach creating a startup empire differently. Firstly, what's a wantrepreneur? They are the eager beavers who may look, act, and seem like entrepreneurs - but all without owning an actual business!
Let's examine the wantrepreneur scenario when building a startup empire:
1. This is the one…the idea of the century!" Wantrepreneurs rarely focus on the problem to solve.
2. "Oooooh features! I love features!" Wantrepreneurs don't create a foundation and work incrementally, but instead fast forward and jump in the deep end before learning to swim.
3. "I'll just whip together the business in no time!" Wantrepreneurs always underestimate the time it takes to grow a business.
4. "If you build it they will come." Wantrepreneurs believe the only thing stopping them from customers, is the lack of product.
5. "Money… I'll figure it out later." Wantrepreneurs severely minimize the needed funding for their projects.
To build an empire you need a foundation, vision, support, and patience. Serial entrepreneurs know this; it is second nature to them. As they move with tremendous speed, they know they have to learn to walk before they run. A scalable, repeatable business model is necessary before expanding too big or out of reach.
What Fuels A Startup’s Success: The Drive to Win or Fear of Failure?
By George Deeb
The age old debate about what fuels a startup's success is whether they are "driven to win" or have a "fear of failure". In this lesson, we are going to try and resolve this question, once and for all.
I think both sides of this argument are pretty self-explanatory, but let's just make sure we are clear on what we are talking about here. Being "driven to win" is an insatiable desire to be #1 in your industry, often with a "take no prisoners" mindset of growing market share as quickly as possible. The CEOs of these types of businesses often have a deep disliking of their competitors, and see themselves in a "all-out sprint" against the CEO's of others in their space. On the other hand, "fear of failure" is driven more by not wanting the company to go out of business, and the perceived negative impact that would have on the CEO's resume and reputation. To me, the former feels more akin to an "offensive" strategy, and the latter feels more like a "defensive" strategy.
So, if that is in fact a good analogy, are you aware of any competition that doesn't require the proper balance of both a good offense and a good defense? I really think if you have too much of one, without the other, your success will be hampered. As one example from the sports world, do we all remember the failed Rich Rodriguez tenure as head coach of Michigan Football between 2008-2010. His innovative offense broke every statistically record, as the most productive offense in the 132 year history of this storied program. While at the same time, his lack of defensive focus, broke every statistically record in the wrong direction, as the worst program in the history of Michigan football. This lop-sided mix of skills, resulted in a middle-of-the-road record (7-6 in 2010), and the ultimate firing of Rich Rodriguez at the end of that season.
This analogy holds true in the business world, as well. All offense and no defense, can cripple your company. If you are too scared to fail (e.g, too much defense), that may cripple your ability to innovate out-of-the-box ideas, that if successful, would catapult your business to new heights never before possible. Let's use Apple as an example. What if Steve Jobs had stayed "defensive", focusing on protecting Apple's marketshare as the leader in personal computers. We would have never seen such great innovations as the iPod, iTunes, iPhone and iPad that revolutionalized the tech scene in the years that followed, fueling Apple's meteoric growth and stock price. And, on the flip side, if you try to use too much "offense", you can cripple your business by growing too quickly, or running out of cash, or entering more markets than logically makes sense for your phase of development, stretching your limited resources too thinly to be sustainable.
I think this theory holds true from my personal experience while CEO of iExplore. I was equally focused on "offense" and "defense". I was deeply-driven to win market share and partnerships away from my competitors at the time, like Away.com, Gorp.com, and AdventureSeek. I wasn't going to rest until we had the largest website and most strategic partnerships locked up. While, at the same time, I had a deep fear of failing, especially in the wake of 9/11/2001 and the negative impact that had on the travel industry. I wasn't going to let Osama Bin Laden end my dream or taint my track record, and I fought on through very difficult market conditions, even though the odds of success were not in my favor. Without the "offense", we would have never built up a #1 market position and partnerships with National Geographic, Travel Channel, Expedia, Travelocity, Lonely Planet, Fodors, Frommers, Conde Nast and others. And, without the "defense", it would have been a lot easier to simply file for bankruptcy in 2001, given the uphill battle that laid ahead.
So, it is not whether you are "driven to win" or have a "fear of failure". To me, startup success needs an equal balance of both, for "offense" and "defense".
About the Author
George Deeb is the Managing Partner at Red Rocket Ventures, a growth consulting, advisory and executive staffing firm based in Chicago. Red Rocket is also a founding member of Ensemble, an all-star powered “Digital Services Suite”. You can follow us on Twitter at @georgedeeb, @RedRocketVC and @EnsembleHQ.
7 Sure-Fire Success Principles
By Daniel C. Steenerson
Success is something everyone wants but only a few achieve. However, it doesn’t
have to be that way. No matter where you are in your business – from startup to seasoned veteran – there are principles you can apply to ensure your success. Below are seven sure-fire success principles you can start using right now:
Work with relentless urgency. Getting up and showing up are a great start but if you want success in your business – or in any part of your life – you have to be willing to work, and work hard. The Army’s slogan from the early 1980s was, “We get more done before 9 a.m. than most people get done in a day.” It’s that hard-driving work ethic that will set you apart from the pack and create opportunities that will open the doors to success.
Apply a disciplined approach. Discipline is defined as a system of rules governing conduct or activity. When you wake up in the morning, do you have a systematic plan of what you are going to accomplish and how you are going to accomplish it? If not, you can’t expect to move forward in your career in any meaningful way. Begin using a disciplined approach by first setting goals and then planning activities that will achieve those goals. Finally, measure the success of your activities and then adjust your plans accordingly.
Focus on implementation. Closely related to discipline is implementation. This is simply the principle of carrying out and accomplishing the goals and plans you created, ensuring actual fulfillment by concrete measures. You can dream and plan and set goals for yourself all day but if you do nothing tangible to see those goals through, you are simply spinning your wheels and wasting time. Implementation is the step that transitions plans into results.
Simplify whenever possible. Why take two dozen steps to accomplish something if you can get it done just as effectively in only three or four? Simplification is a critical part of achieving maximum results with the least amount of effort. Working hard is important but using your time in the most effective way possible is even more important. Simplifying processes whenever possible makes it much easier to accomplish more in less time. It also makes it quicker and easier to share your knowledge and bring team members up to speed when necessary.
Embrace discomfort. Nobody likes to be uncomfortable and it’s a natural inclination to avoid discomfort. However, in order to be successful, you must be willing not only to be uncomfortable but also to embrace discomfort. This means the willingness to give something up in order to gain something, such as giving up comfort in order to gain forward momentum. This can mean working late to ensure goals are met or making lifestyle changes in order to be able to invest in a new venture. Either way, sacrificing comfort now can enable you to take the steps you need to achieve future success.
Continually develop your skills and knowledge. This is another way in which embracing discomfort has a large payoff. Taking courses to gain certifications along with expanding your knowledge base of your industry is a fantastic way to move forward and be more successful in your career. Wake up early to study if you need to but make sure you take advantage of all the classes and instruction available to you to become an expert in your field. Another great way to increase your skills and understanding is to read – read anything you can get your hands on that can help you become more knowledgeable and effective. Fifty-eight percent of people never read non-fiction books after they graduate from high school, so simply picking up a book and reading it will help establish your expertise and set you apart from your competition.
Develop the right relationships. It’s not only the relationships you develop with your company’s clients that are important. Developing good, healthy relationships with colleagues and employees is an important step in business success. These are the people who can influence your business’s growth – for better or worse. Ensure that influence is working in your favor by identifying ways to help employees and colleagues achieve their goals and objectives. Your assistance will help establish you as a go-to person within your industry and position you for small business success.
Success might not be easy but it is achievable. There will always be setbacks but perseverance, dedication and drive eventually yield success. Follow these seven sure-fire success principles and you will find yourself enjoying the success you’ve always wanted.
About the Author
Daniel C. Steenerson imparts his success wisdom, principles and philosophies through his proprietary “Science of Visioneering” approach to help companies, entrepreneurs, executives and other professionals realize business greatness. He may be reached online at www.DanSteenerson.com–an online community where business owners, executives and other career achievement-minded professionals go for no-nonsense, “tell-it-like-it-is” success advice.
10 Common Startup Flaws Leading to an Early Demise
By Martin Zwilling
Based on my experience as a mentor and an entrepreneur, if you fail on your first startup, you are about average. That’s not bad, but who wants to be average? Every young entrepreneur knows implicitly that startup success is a long, hard road. Statistics show that the failure rate for new startups within the first 5 years is higher than 50 percent. How can you improve your odds?
Of course, a real entrepreneur always takes a failure as a milestone on the road to success. They count on learning from their mistakes, and use the experience to move to the next idea. But why not learn as well from the mistakes of others, without suffering their cost, time, and pain? In that context, I offer you my list of ten top startup failure causes, seen over and over again:
No written plan. Don’t believe the old urban legend that a business plan isn’t worth the effort. The discipline of writing down a plan is the best way to make sure you actually understand how to transform your idea into a business. Take heed of the words of an old country song, “if you don’t know where you’re going, you might end up somewhere else.”
Business model doesn’t make money. Even a non-profit has to generate revenue (or donations) to offset operating costs. If your product is free, or you lose money on every one, it’s hard to make it up in volume. You may have the solution to the world hunger problem, but if your customers have no money, your business won’t last long.
Idea has limited business opportunity. Not every good idea is a good business. Just because you passionately believe that your technology is great, and everyone needs it, doesn’t mean that everyone will buy it. There is no substitute for market research, written by domain experts, to supplement your informal poll of friends and family.
Execution skills are weak. When young entrepreneurs come to me with that “million dollar idea,” I have to tell them that an idea alone is really worth nothing. It’s all about the execution. If you are not comfortable making hard decisions, taking risk, and taking full responsibility, you won’t do well in this role. Remember, the buck always stops with you.
The space is too crowded already. Having no competitors is a red flag (may mean no market), but finding ten or more with a simple Google search means this may be a crowded space. Remember that sleeping giants do wake up if you show traction, so don’t assume that Microsoft or Proctor & Gamble are too big and slow for you to worry about.
No intellectual property. If you expect to seek investors, or you expect to have a sustainable competitive advantage against sleeping giants, you need to register all your patents, trademarks, copyrights, and trade secrets early. Intellectual property is also often the largest element of early-stage company valuations for professional investors.
Inexperienced team. In reality, investors fund people, not ideas. They look for people with real experience in the business domain of the startup, and people with real experience running a startup. If this is your first time around, find a partner who has “been there and done that” to balance your passion and bring experience to the team.
Resource requirements not understood. A major resource is cash funding, but other resources, such as industry contacts and access to marketing channels may be more important for certain products. Having too much cash, not managed wisely, can be just as devastating as too little cash. Don’t quit your day
job until new revenue is flowing.
Too little focus on marketing. Viral marketing and word-of-mouth are not enough these days to make your product and brand visible in the relentless onslaught of new media out there today. Even viral marketing costs real money and time. Without effective and innovative marketing across the range of media, you won’t have a business.
Give up too easily or early. In my experience, the most common cause of startup failure is the entrepreneur just gets tired, gives up, and shuts down the company. Many successful entrepreneurs, like Steve Jobs and Thomas Edison, kept slugging away on their vision, despite setbacks, until they found the success they knew was possible.
Note that the lack of a university degree or MBA is not even in the list of common failure causes. In fact, we can all point to examples of successful entrepreneurs who dropped out of college, like Mark Zuckerberg and Bill Gates, but still went on to be way above average. The most important thing you can learn in school is how to learn.
The best entrepreneurs value “street smarts,” in addition to “book smarts,” to temper their passion with reality principles, like the ones listed here, to stay ahead of the crowd. It’s good to say you never make the same mistake twice, but success is even sweeter the first time around with no mistakes. Go for it.