The Venture Edge

I just returned from Sioux Falls, South Dakota where the non-profit institute that I co-founded with Tim Stearns has been running a Technology Accelerator Program over the past 8 weeks.  The goal is to get 7 new technology companies through the last mile of development and launched. This week we held a deal -dating event where the entrepreneurs pitched their businesses to a series of investors. 

Despite my concern that I might end up feeling like a big sardine jammed into a little can, I decided to brave the Sunday crowds at Comic-Con. Arriving with my kids in tow at 9:30am -- right as the doors opened to the public -- I was pleasantly surprised to see that the Sunday crowds were much less intense than what I have experienced onother days during previous shows. I suspect the reason was some combination of typical last-day trade show blues, and burnout on the part of the 4-day passholders who decided to sleep in on Sunday and arrive fashionably late.

Starting a business is not for the faint of heart and, unfortunately, many would-be entrepreneurs don't stop to question themselves before they make the leap.  If things go well, the successful entrepreneur will often blindly dive into the next deal feeling like he or she is golden.  That's what one billionaire entrepreneur I know did; in fact, after a huge sale of his very well-known company, he dove into three very diverse high-risk ventures believing that he couldn't lose--he had the Midas touch. 

One of the fringe benefits of being assistant editor of Leader to Leader magazine is that I am usually able to wrangle press passes for some very interesting events. For the past several years, I have used the power of the pen to get a pass into what is possibly the world's largest convention for lovers of pop culture: Comic-Con. Born 40 years ago in San Diego, Comic-Con has steadily grown over the years into a four-day extravaganza that draws lovers of comics (and science fiction, fantasy, superhero, supernatural, and horror films, television shows, blogs, websites, and most any other form of media you could ever imagine) from across the country, and around the world. And while only 300 people attended the very first Comic-Con, last year 126,000 showed up.

Have you recently tried to get a domain name for your new company?  If you haven't, let me fill you in on the facts.  The chances of your getting the name you want is zero and zip.  Sorry, that's the truth. Unless you're going for something a bit nonsensical such as Zooomr, or Oooooc, you going to find a veritable wasteland of possibilities. 

The publishing industry is increasingly becoming a tough place to do business. It's no secret that fewer people are willing to shell out the $20 or $25 it costs to buy a new book (much less the $1.50 it costs to buy a newspaper). And why should they? All they have to do is turn on their computer and fire up their Web browser and they can get the latest news and all the savvy analysis and in-depth articles they want -- for free. While this is a great thing for consumers of information, it's a not-so-great thing for those traditional publishers that are selling fewer books today than they were a few years ago. Many of these smaller publishers are simply closing their doors and going out of business, while the larger ones are feeling the heat -- and responding by drastically cutting costs, laying off staff, and reducing the number of books they publish.

I hear too many people complaining that it's tough to make money with the economy in a deep slump.  Well, some very ingenious people. with what could only be described as wacko ideas, have managed to make money, in some cases A LOT of money.  I guess it's true that there's a sucker born every minute, because whatever you want to sell, there does seem to be someone in the world crazy enough to buy it.  Take a look at some unlikely businesses that have made money for the people who founded them.  Then ask yourself---why didn't I think of that?

In any business, there are times when you'll hit a ceiling -- when growth slows and sales flatten. How do you get jumpstart your engine of growth and get your business moving again?

This afternoon I was monitoring NASA TV for what was to be the launch of the space shuttle Endeavor.  Ultimately, once again, the mission was aborted for weather, but as I listened to the rocess leading up to the scrubbing of the launch, I couldn't help but see the parallels with the kinds of things entrepreneurs go through at the run-up to the launch of their ventures, or the challenges that thwart a company attempting to secure an investment or complete an IPO.  As with a shuttle launch, it's all about timing and polling all the relevant stakeholders for a go/no-go decision before the final committment is made.

Paul Edwards -- my friend and coauthor of Home-Based Business For Dummies with his wife Sarah -- sent me an interesting study published this month by the Kauffman Foundation in Kansas City, Missouri. The study -- titled The Anatomy of an Entrepreneur: Family Background and Motivation -- surveyed 549 company founders in a variety of industries, including services, health care, aerospace and defense, and computer and electronics. And while the results of the study are skewed towards successful entrepreneurs (those entrepreneurs who were at the helm of failed businesses were not a part of this study), they are illuminating nonetheless.

Peter's post on signs of a turnaround was certainly welcome to most of us, but those of us who decided not to participate in the recession in the first place did not wait for recovery signs before starting or growing our businesses. Nevertheless, it seems we may not be in the majority .  Today during an interview, a reporter told me that my view of California's competitiveness going forward and the ability of entrepreneurs to be successful in a down economy was quite contrarian compared to some of the entrepreneurs he had interviewed. 

It seems like every day there is some new bit of news about the economy and its chances for recovery. One day the news is good -- consumer confidence is up, for example -- and the next day the news is bad. However, some economists feel that we are just about to turn a corner and that, although the recovery will take some time, the trend is definitely about to head in the right direction.

This summer I’m working with five new technology companies that are in the process of going from bench to business. What is common with all these entrepreneurs is the belief that once you have a product, all you have to do is find a customer to buy it and you’ve got a business. (Remember I talked about going from idea to prototype in my previous post) Yes, Peter and I are famous for saying that without a customer you don’t have a business, but that’s just a clever saying. It completely overlooks the fact that a business has a lot of moving parts and the entrepreneur, the product, and the customer are just three of them.

A client of mine in Texas recently asked me if I had ever read the book Atlas Shrugged by Ayn Rand, mentioning that it was one of his favorites. I admitted that although an early-'60s, 1,000-page+ paperback edition of the book has graced my bookshelf for as long as I can remember, I had never gotten around to reading it. Then, when a colleague of mine -- Traci Fenton, founder and CEO of WorldBlu -- mentioned to me that she was about to read the book, I knew that my time had finally come. I dusted off that old, yellowed copy of the book and dug in -- reading it in 5 and 10 minute bursts while waiting to pick up my daughter at school each day.

If you saw my previous post, "With Apologies to Mr. Richter," you know that every technology business experiences the valley of death.  But, no matter what type of business you're trying to start, you need to do a proof of concept before you go all out and launch the business and to do that you need a prototype, which is simply a working model of the business--the product or service being offered.  Why? Because you can't get good feedback from customers if you don't have something they can see, touch, and interact with. 

A little over a month ago I posted about the importance of knowing who your customer is. I mentioned that it's not enough, however, to know who your customer is, you must provide products and services that your customer values. This is by far the more difficult task -- it's not always clear what exactly your customer will value. While you might believe that what you are providing has hit the mark, your customer might believe otherwise. And if this is the case, then you've got a problem.