Written by Jay Turo on Thursday, May 28, 2009
In my role as the CEO of Growthink, I get asked variants of the same questions a lot, namely: "What do you think about this economy?” “Do you see things turning around?” “Are there any deals getting done out there?” I answer these questions based on a number of factors:
What does this all sum up to? The Beatles say it much better than I ever could:
Written by Dave Lavinsky on Tuesday, May 26, 2009
It is common knowledge that companies need business plans.
Written by Dave Lavinsky on Thursday, May 21, 2009
I hope you're not a Susan Boyle fan. Because I have a major bone to pick with her. If you don't know who Susan Boyle is, she's the 48-year old British woman who gained international fame upon singing on the reality TV show "Britain's Got Talent" in April 2009.
So why am I so mad at her?
Because for 48 years she kept her talent to herself. She was too afraid to take a shot. To use her natural abilities and training to achieve real success.
I say "how dare she do this!" Is this fair to the millions, if not billions, of other people in the world who don't have this talent? Or who live in places where they have no ability to use their talent? And is this fair to the billions of others worldwide who have missed out on hearing her beautiful voice for the past four decades?
Now what really gets under my skin is when I compare Susan Boyle to an entrepreneur, which she essentially is. How many natural entrepreneurs are out there who are letting their talent waste away? Who have tons of ideas and abilities, but are working in their same, boring jobs and not using them?
Why do I care?
Because they are failing to create wealth for themselves and their families. And worse, they are killing our economy. Because entrepreneurs like them are supposed to be creating great companies- companies which provide jobs, great products and services for the rest of us, and a tax base that feeds our government. Yes, they are failing themselves and their countries.
So why is this happening? I think it's because they are too afraid. Like Susan Boyle was for many, many years. And unfortunately, in many cases, these entrepreneurs simply haven't gotten the kick in the pants that they needed.
Like entrepreneur Mark DiPaola who I spoke with the other day. Mark graduated from college and got a cushy job at a consulting firm. He worked there for a couple of years, and may have worked there for decades if he kept getting promoted.
But thank goodness, Mark got laid off. And then he went to work at a startup. And thank goodness, the startup failed. Because it was those two experiences which prompted Mark to start his own company.
Which he did. And which was a massive success. The company, Vantage Media, generated $68 million in revenue in 2007. In March of that year, venture capitalists and private equity firms put $70 million into the company and Mark was able to cash out and leave the company at the age of 30. And retire. And start a foundation to give back. Now that's what I call success.
Are you the next Susan Boyle? Do you have entrepreneurial talent, but are keeping it to yourself? Have you not started your own company yet? Or failed to really grow your company? Well, I'm willing to bet that you have more talent than you let on and that you could be more successful than you currently are.
And, I also know what's probably holding you back.
That's right. Most entrepreneurs start their companies or grow them properly because of money. Which is odd, since successful entrepreneurs make tons of money. But, to become a successful entrepreneur, you often have to leave your current job and current income.
To solve this problem, many entrepreneurs, like Google AdSense founder Eytan Elbaz who I spoke with the other day, raise capital BEFORE formally launching their companies. They continue to work at their current jobs and develop their business plan and raise money. And then, once the money is in their bank account, they leave their current job and dive into their ventures full time.
And you can do this too! IF you know how to raise money for your business.
So, in addition to all the information that you buy and read on marketing, operations and other business disciplines, start investing in learning how to raise money for your business. Since that is the most essential skill for a successful entrepreneur.
Written by Jay Turo on Wednesday, May 20, 2009
"Those who cannot remember the past are condemned to repeat it" - George Santayana
The financial panic of 1873, which set off a severe nationwide economic depression that lasted for 6 years, included The New York Stock Exchange closing for 10 days, 89 of the country's 364 railroads going bankrupt, and unemployment as high as 14%. During this extremely challenging time, a gentleman by the name of Thomas Edison started a company called General Electric. You may have heard of both of them.
The Great Depression of the 1930's is even scarier in statistics than in legend. Industrial production fell by 45% between 1929 and 1932. Homebuilding dropped by 80%. 1,000 of the nation's 25,000 banks failed. US GDP fell by 30%.
And during these dark days, DuPont created new products and indsutries including rayon, enamels, and cellulose film. RCA invented television. And a little company called IBM started pouring research dollars into something called the computer.
The 1970's are commonly remembered as a dark period for American finance and business - stagflation, negative stock market returns for the decade, and hits to the national psyche including Vietnam, Watergate, and the Hostage Crisis. It was also the era that 2 ambitious and visionary young men named Bill Gates and Steve Jobs got their start.
My 20 years in angel investing, small business and entrepreneurship have taught me to separate the world into two kinds of people: Those that comment and complain on how things are and those that do something about it.
Unluckily for all of us, television and the always on Internet give those that comment and complain bigger megaphones than ever to spread their false prophesies of doom. It is only human nature to be affected, depressed, and even scared by their strident negativity.
Very, very luckily for all of us, however, there always be budding Bill Gates and Steve Jobs and Thomas Edisons and Thomas J. Watsons amongst us. And where are these future shining stars devoting their prodigious energies to these days? I promise you that most of them aren't working at General Motors, nor are they drawn to politics or working in the public sector, nor to non-profits.
No, they are capitalists. They are entrepreneurs. They start and work at Internet companies, they research alternative energy technologies they discover new drugs to make us all live longer and healthier lives. They are and they discover Black Swans. They - in the words of Voltaire - make "life throb to a swifter, stronger beat."
And you know what else? They're in it for the money. They want to build companies like Pure Digital (makers of the FlipCam) did and sell out to Cisco Systems for $590 million. Or Facebook, on the verge of a public offering that will make its early investors billions. Or Integreon, whose business plan was perfected in a small Growthink conference room 10 years ago, and is now the largest legal outsourcing firm in the world (and saving a lot of folks a lot of money on their legal bills).
With apologies to Doris Day, the future is in fact ours to see. As long as little boys and girls are raised to grow up to do something great with their lives, progress will march on. Technologies will be commercialized. New industries will arise. Companies will be born and will grow and grow and grow. Fortunes will be made.
The question, of course, is what will be in it for you? Will you be on the couch with the critics? Or will you be in the game with the builders and the doers?
Written by Dave Lavinsky on Thursday, May 14, 2009
If you haven't yet launched your new business, I have some advice for you.
It's actually not my advice. As I'm a little conflicted about it. Let me explain.
The advice is to start your new business as a project. What that means is that you don't quit your day job. You don't raise capital. You don't focus 100% of your effort on it.
Rather, you work on it as much as you can in your spare time until it either becomes something, or it doesn't.
The advice comes from Bambi Francisco, the co-founder and CEO of Vator.tv who I spoke with earlier this week. It's not only her advice having founded a company, but the advice given to her by Mark Pincus.
Pincus is the serial entrepreneur who founded Tribe in 2003 and sold it to Cisco Systems in 2007, and is now the founder and CEO of Zynga, a large social gaming company. You can watch Francisco's brief but informative interview of Pincus here.
So, the point is to start your new business as a project. Obviously, this depends on your choice of business. If it's a restaurant, there's not much of a project to be had. But if it's software, for example, you can start developing it and see if you are able to start creating features that people want.
And once you can prove that the project is developing into a viable business, you create a real company for it.
This "project" concept also reared its head when I recently spoke with Eytan Elbaz, co-founder of Oingo, the company which later would be purchased by Google and renamed as Google AdSense.
Elbaz and his co-founders were developing their novel software while still holding full-time jobs. After a little while, they were able to develop a working prototype. And then, Elbaz showed it to an angel investor (who interestingly was a client of his at his current job). It was only upon the angel investor writing them a check that they decided to leave their full-time jobs and really launch the company.
So why am I conflicted about this advice? Well, there's definitely something to be said for the entrepreneur that is so passionate about their business that they're willing to fully launch it from the get go.
To leave the comfort of their current job and take all the risk. In these cases, I like that the entrepreneur can't blame their current job for limiting their time. They fully immerse themselves in their business, and give it their best possible shot. And in many cases, this total commitment is what drives success.
The key here is probably that everyone's situation is different. The young entrepreneur might have an advantage in that it may be easier to leave their current position and jump 100% into their business. Conversely, the older entrepreneur with the family and mortgage may be less able to shoulder the risk of foregoing their current salary.
The choice is yours - take the leap fully or partially. Each can result in success.
The only choice that I truly hate is doing nothing. Too many people sit with great ideas in their heads but fail to act on them. And then, when someone else successfully executes on their idea, they say, "Hey, that was my idea."
To them I unfortunately say, "Who cares - it's the entrepreneur's willingness to commit and execute on the idea that really matters!"
Written by Jay Turo on Tuesday, May 12, 2009
Scott Shane, one of the world's most respected statisticians regarding entrepreneurship and angel investing, has a new book out - "Fools Gold? The Truth Behind Angel Investing in America." It is without question the finest compilation of statistics and cold, hard facts regarding the REALITIES - as opposed to the myths - of the keys to successful angel and emerging company investing. Some amazing statistical nuggets from Scott's book:
My overall takeaway: If you want to invest in private company deals, only do so via one of two avenues: 1) Via a GOOD angel investment group like The Band of Angels or the Tech Coast Angels (if you can get in) or via a managed portfolio approach such as a private equity or venture capital fund targeted toward the space or via a hybrid, operational approach like Growthink.
Written by Dave Lavinsky on Tuesday, May 12, 2009
Have you ever heard of ZipSkinny.com?
Written by Dave Lavinsky on Thursday, May 7, 2009
Yesterday I had the opportunity to interview Brad Feld, who is considered among the elite investors in privately held companies.
Many first-time entrepreneurs view VCs simply as providers of capital. In actuality, VCs are partners. They exert control over your company. They have experience in product development or scaling companies, or both, and can provide significant value beyond the money they infuse in companies.
Written by Dave Lavinsky on Wednesday, May 6, 2009
My recent interview with PR expert Richard Harris was enlightening. You may know that I owe a lot of Growthink's success to PR. A decade ago, I pitched the Los Angeles Times and they published a story on us. That day I received about a hundred phone calls, and at least that volume in emails. So, I focused the interview on figuring out how to replicate that success.
Richard serves as the founder and CEO of Momentum, which provides communications, strategy and placement agent services to private equity funds, investment banks, and selected early stage and non-profit companies. A 20+ year veteran of the public relations industry, Richard has not only an impressive client list (that includes The Girl Scouts of America, Polaris Venture Partners and Star Jones), but also a wealth of knowledge on this subject.
Some of the areas the Richard covered were:
The full interview is available for members of Growthink University.
For non-members, you can listen to the first five minutes of the interview by clicking on the blue triangle on the player below.
Written by Dave Lavinsky on Wednesday, May 6, 2009
All entrepreneurs must be well-versed in sales.
We are always selling: Selling to employees as well as customers, investors as well as partners, etc. And those who excel at selling have a major competitive advantage.
To make sure that both you and I are in fact not only great at selling, but building an effective sales team, I recently interviewed sales whiz Adam Shaivitz.
If you're not familiar with Adam, Adam is the co-author of a best-selling book on selling called “Selling is Everyone's Business: What it Takes to Create a Great Salesperson.” He is also a sales consultant with Accelerate Performance who has consulted for Google, ADP, Pimco, Morgan Stanley, and many others.
Adam conveyed tons of great information. Two points that I especially liked were the following:
1. Make sure that you are properly motivating and solving the problems of your buyers.
The best salespeople are problem solvers who are able to sell the benefits of their offerings tailored to one or more of the six basic fundamentals that all of us as humans want:
Adam told us that too many business owners neglect their top sales performers. Rather, they tend to focus on improving their lowest performers.
The full interview is available for members of Growthink University
To listen to the first few minutes of the interview, please click the blue triangle in the player below.
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