Starting a venture and launching a product/service is not an easy task as can be testified by the thousands of individuals that start a business every year.
Yet many of these individuals overlook what I term, "Creative Transformation," the thought process, emotions, and actions needed to take one's idea and transform it into a viable business.
Often reality is not representative of what we think/dream in our heads. This predicament is often seen in start-ups in which entrepreneurs have a great idea but when developing that idea into a business the results may be a venture that is not representative of what they thought.
What causes this discontinuation?
Each case is different, but for a majority of cases a mix of a misguided thought processes, escalated emotions, and ineffective actions may lead to an unsuccessful venture. A recent client of mine, Alex Wagenheim, has experienced Creative Transformation and exemplifies how an entrepreneur can overcome it.
Alex Wagenheim is an ambitious and true entrepreneur by heart who has identified an unmet need in the small business market: the need for simple and efficient software. Alex's first major obstacle as an entrepreneur was being able to articulate his idea and vision into words so that our consultants could help him craft a business plan.
Alex went through a thought process where he had to analyze his idea and determine the value proposition that his service would provide to his potential customers. This thought process was a struggle as different variables had to be considered such as existing technologies, the market needs, and the level of sophistication of the customer base.
Each of these areas revealed more questions that needed to be answered and from there Alex experienced emotions of excitement when he discovered a large market for his venture. But he became apprehensive when he realized that in order to launch his venture properly a large amount of work would need to be completed. Alex stayed optimistic and decided to curtail his frustration and create a plan of action.
Overcoming emotions and creating a plan of action is often the breaking point for many entrepreneurs. When the thought process, emotions, and risks are all negative it is typical for an individual to abandon their idea. Plans of action are abandoned and what is left is just an idea of what could have been.
At the onset of Creative Transformation, Alex realized that he needed help to develop his venture and service. The emotions he was feeling prompted Alex to react and seek the consulting advice of experts.
With Growthink's help Alex was able to transition smoothly through Creative Transformation and execute on the proper actions that will increase the success of his business. Creative Transformation was not a breaking point for Alex, but was the catalyst that prompted him to search for help from professionals.
Alex is currently completing a market survey for his target market and will develop the first beta of his software in the near future.
Aren't you sick and tired of watching Washington spend all of YOUR money and YOU not seeing any of it?
Wonder where all of the stimulus money has gone?
Well, try this on: The Obama stimulus commits $17 billion in federal funds to reimburse medical practices for implementation of electronic health records systems and their use.
This involved doctors getting paid up to $44,000 each to transition their practices to the new technology.
And even before the government began throwing money at the sector, it was a $4 billion business growing at 23%/year.
Why Should You Care?
Well, if you're interested in capitalizing on one of the fastest growing and most dynamic technology sectors out there, and one about to see turbocharged growth driven by federal dollars, you should care.
Meet an Industry Pioneer
I would like to invite you to an exclusive opportunity to meet, via web conference, the CEO (and Stanford MBA) of one of the fastest-growing and innovative companies in the industry.
He will talk about which companies and technologies are best positioned to profit from the stimulus money, how "cloud computing" applications are beginning to see real adoption rates, and what has been driving the record revenue months his company has had this quarter in this tough economy.
Best regards, and look forward to connecting.
P.S. I know too many otherwise intelligent business men and women who have been listening to all of the negative drivel that passes as business news out there, and sitting on the sidelines and missing opportunities.
Don't be like them.
Here is a video that explains precisely why raising capital is so important to your business.
And, importantly, it includes details regarding why it’s critical that you understand how to raise capital from multiple sources, even if you currently are only seeking one particular type of capital...
Near the end, I reveal a fantastic (and perhaps my favorite) tip, which is the single most controllable factor that you have to improve your success in both fundraising and successfully growing you business.
Some of the most interesting investment research over the last 6 months has been the application of traditional portfolio theory and hedging techniques to angel and private equity investing. Research compiled by the National Venture Capital Association, by the Kaufman Foundation for Entrepreneurial Activity, and by the Entrepreneurship in the United States Assessment, highlight a number of both subtle and startling insights.
When compared to other asset classes, there is relatively little correlation
between various private equity investing sectors. In other words, while the
prices of publicly traded aerospace and software companies, for example, will
move up and down more or less together, the success
probabilities of that hot drug development company and that wind energy startup
are reasonably uncorrelated.
Why is this important? Because it creates a far greater hedging opportunity than is available in public stocks, whereby the investment combination of the wind startup and the drug development company has disproportionately less risk for the expected return.
The research also shows that the smaller the size of an equity financing deal,
the less correlated is the success probability of that deal with the equity
markets as a whole. A subtle, but critical point that had made a HUGE difference in
investment returns over the past 10 years. Try on these two facts:
1) The venture capital industry as a whole - with average financing sizes over the past 10 years of greater than $8 million/deal - has returned ZERO percent to investors during that time frame.
2) In contrast, the average return on private equity classified as "early, or angel stage" had an average annual return during that same period of a whopping 32.9%! (Thomson/Reuters).
I talk about more about the application of portfolio theory to private equity and angel investing in the video below: