Friday, May 31, 2019

“Starting Your Business: The Tools, Resources and Mindset You Need to Succeed - Entrepreneur” plus 3 more

“Starting Your Business: The Tools, Resources and Mindset You Need to Succeed - Entrepreneur” plus 3 more


Starting Your Business: The Tools, Resources and Mindset You Need to Succeed - Entrepreneur

Posted: 31 May 2019 04:00 AM PDT

Never underestimate how much money you need to start, how long it will before you turn a profit or how hard you will have to work.

11 min read

Opinions expressed by Entrepreneur contributors are their own.

Is one of your main goals for your life to start your own business? Maybe building your own business has been on your bucket list for a very long time? Don't begin with your current employer; you've already heard the success rate or lack thereof for new startup businesses.

We all have the success ratio of business failure seared into our brains. According to the U.S. Small Business Administration, 30 percent of businesses fail within their first year and around half of all businesses close-up shop within five years. Only a third of businesses will make it to their tenth anniversary.

There are a number of factors why so many businesses don't succeed. The leading cause is lack of profits and funding, meaning underestimating how much money is needed to fund a business. Does this mean that you should give up on your dream? Absolutely not. But you need the proper tools, resources and mindset before jumping feet-first into your new adventure.

Starting a business, 101.

Starting a business isn't easy -- though it seems like it's effortless when accomplished entrepreneurs share their success stories. We hear about founders who seem to quietly buy a website and turn it into a million-dollar business. In reality, starting a business involves careful evaluation, planning and several financial and legal activities. Let's quickly recap the steps you'll want to take before launching your business.

Evaluate yourself: When thinking about what steps you'll take before launching a business, consider what skills and expertise you already possess. As you examine what you're passionate about and the lifestyle you want to live -- pause ask yourself, "Why do I want to start my own business?"

Brainstorm business ideas: Begin thinking about what bothers you in the business sector and how you can fix it. Maybe you have the knowledge or expertise to improve an existing business idea. Are you aware of trends and find yourself always thinking ahead of the curve? Do you possess skills that you can apply to a new or existing industry? These questions will help you brainstorm additional business ideas.

Conduct market research: Market research will let you know if there's an opportunity to make a decent profit in differing areas. Extensive exploration and analysis of your market will help you determine what gives your idea a competitive advantage over other similar fields and industries. If possible, give potential customers a chance to interact with your product or service so they can provide feedback to you.

Write your business plan: Your business plan is a blueprint that will guide you throughout the life of your business. In a nutshell, it should discuss the purpose of your business, who your customers are, your long-term goals and how you'll finance your business. 

Make your business official:  There are clear-cut areas to have locked down for a solid business:

  • Determine the structure of your business (LLC, corporation, or partnership).
  • Give your business a name.
  • Registering your business in your state and also federally.
  • Obtain a state and federal tax ID.
  • Acquire the proper permits and licenses.
  • Open up a business bank account.
  • Register for trademark, copyrights, or patents.
  • Be sure to get legal advice where needed.

Pick a business location: Thanks to technology, it's possible to start a business remotely right from your home. For brick-and-mortar business ideas you'll want to think about demographics, accessibility, proximity to competitors, and the cost of rent and utilities.

Finance your business: How will you finance your business? There are numerous ways you can cover the economics of your new business including saving up the money and funding the business yourself. Many ask friends and family for help or obtain a grant or loan. Other options may be crowdfunding, trading equity, or working with Angel or Venture Capitalist investors.

Develop and improve your product or service: Seek frequent feedback from your target audience to determine what they like and what they don't or won't accept. Hire specialists who can help you turn your dream into a reality.

An essential ingredient for a winning business is your mindset.

Unlike becoming a doctor, electrician, mechanic or lawyer -- there are no standardized tests or certification to announce that you are now prepared to become a business owner. Even an MBA is woefully underwhelming in its claim for business preparation. While there are always classes that business owners will find useful, finding the right ones may take some time.

Your university can give you the classes or courses, and the information you desire in essential areas such as accounting, marketing basics, finances, etc. However, the fact remains that as a business owner, you'll need to develop the right mindset.

No matter how educated, experienced, or passionate you are -- having a winning business mindset will help you. Your mindset will make a difference in how you conduct your business and make personal decisions. Mindset determines how you keep yourself up, happy, motivated and driven.

Related: 10 Mistakes to Avoid When Starting an Online Business

The entrepreneurial equation.

According to Carl Roth in her influential book "The Entrepreneur Equation," here are ten mindsets that every entrepreneur should develop before starting their own business:

Assess your motivation: Yes -- it is your business. But, you will have to answer to customers, partners, lenders, and investors.

Evaluate how you work with others: Even if you're a solopreneur -- you still will have to work with other people -- such as accountants, lawyers, customers, and freelancers. You will want to work together seamlessly with everyone you can in your new business; strengthen your communication and people skills.

Know your responsibilities: Starting and running your own business is a 24/7 job. Know how that's going to affect your personal life.

Sharpen your management skills: You need to know how to manage your team so that they can be more productive. Additionally, you'll need to know how to interact and work with vendors and suppliers. Having experience in your industry could assist with this.

It's not what you know, but who you know: Take stock of your network of professionals. Think about people who can connect you with differing business services -- like lawyers, as well as investors and lenders.

Be honest about your relationship with money: Financial management can make or break your business. If you're a careless spender, then you'll probably have cash flow problems. Get control here first -- or you'll be spending more than you're bringing in.

Assess your personality: Being a business owner means that you need to be flexible and prepared for the unexpected. If you get extremely stressed when things don't go as planned -- running your own business won't gel with your personality type.

Examine your competitors: A close assessment of your competition allows you to determine what makes you different and how you stand out from other businesses. This information and analytical thought can be used to build your brand.

Test your scalability: Successful business owners do not do everything on their own. They rely on automation and delegation. If your business sinks because you're not around -- then use your skill to have a successful career. Better a successful path of achievement than remaining a failed business owner, though you may "get" to have this passage under your belt, too.

Related: 4 Differences Between Solopreneurs and an Entrepreneur Working Alone

The best entrepreneurial guides and resources.

Starting and running your own business is no easy task. You work a ton of hours, have to face financial uncertainties, and you'll be putting out numerous fires. To make matters worse, you're probably doing all this work by yourself.

The goods news is that there is no shortage of guides and resources that can lend you a hand in starting and managing your business.

General information:

US Small Business Administration: The US SBA is a go-to resource for business owners. Here you can find most of the information you will likely need. You'll learn how to write a business plan, structure a business, register a company, and apply for a permit.

Entrepreneur: Entrepreneur.com is a well-respected publication that shares advice on starting and growing a business. Daily publishing guarantees the popular and up-to-date articles and guides that discuss everything from marketing to taxes to productivity.

The Self Employed: The Self-Employed.com is an excellent site where business owners can find advice about funding, taxes, and marketing their business.

Funding and financing.

Loans: If you need a loan check out sites like Kabbage, BlueVine, Fundbox or Small Business and Community Development Programs.

Grants: For grants, resources like The National Association for the Self Employed and Small Business Innovation Research Program are some of your best options.

Peer-to-peer leadership: Prosper and Funding Circle can connect you with peer-to-peer lenders.

Crowdfunding: Crowdfunding your business? Launch a campaign on Kickstarter or Indiegogo.

How to manage money: Evergreen Small Business provides advice on how small business can keep track of finances.

Legal: LegalZoom allows you to incorporate your business and is affordable.

  • Rocket Lawyer lets you create legal documents and ask lawyers questions.
  • Nolo has business forms, as well as guides on how to structure your business.
  • Atrium is a new upcoming law startup that helps small businesses. Help with everything legal.

Marketing:

Networking:

  • YEC can help you with professional networking. EO for the more seasoned entrepreneur. Be willing to help others.
  • Business Networking International (BIN) can help you get referrals by connecting you with other businesses in your community.
  • SCORE is an organization that pairs businesses with volunteer mentors. This institution helps business owners develop and grow their business. There's also online resources and online courses.
  • LinkedIn Small Business requires a membership. Once joined, business owners can use LinkedIn to connect, promote, and network their business.
  • Volunteer Match can locate volunteer opportunities in your community.
  • Your local Chamber of Commerce or Rotary Club.

The essential tools you need to start a business.

Finally, you need to use the right tools to help you grow and maintain your business. Thanks to technology, these tools are affordable, easy-to-use and can automate some of your most redundant tasks. While not an extensive list, here are some tools you should consider. I personally use each and every one of these tools and can speak to how amazing they are!

  • Expensify can easily track your expenses.
  • LivePlan can help develop a solid business plan.
  • WordPress is a free platform to build a customized website.
  • 99Designs is a great site to find designers for your logo or website.
  • Fiverr and UpWork are excellent locations to find talented freelancers.
  • Aweber and MailChimp can be used to generate leads and run an email marketing campaign.
  • Hootsuite and Buffer automates your social media efforts, like scheduling posts in advance and engaging with followers.
  • Due or QuickBooks can make your accounting as painless as possible.
  • TurboTax lets you do your business and personal taxes yourself.
  • Trello is a project management system that lets you assign and mentor tasks.
  • G Suite is the foundation of your business and it comes with Gmail and Drive.
  • HubSpot is an all-in-one marketing platform that comes with CRM and marketing and sales suites.
  • Google Adwords and Facebook Ads can market your business online.
  • Google Analytics provides demographic and behavioral information about your audience, along with which marketing efforts are working.
  • With Calendar, you can share your calendar with others, as well as use machine learning to receive smart scheduling suggestions.
  • G2 helps with all your company reviews.
  • Intercom helps you to chat and market strategically to your potential customers.
  • For customer service, use Survey Monkey and FreshDesk.
  • LastPass remembers and stores all of your passwords.
  • Keeps in touch with clients and virtual workers via Zoom, Lifesize, Slack and Skype..
  • Gusto handles your HR and payroll needs.

Related: 10 Lessons to Learn From Failing Startups (Including My Own)

There are so many variables you'll face when building your new business. Go into your business knowing that you can do everything correctly and still come out on the short end -- with a failure. There are things for which you can't possibly prepare. Even those things will keep you up nights, they'll provide you with experience for your next go around.

Get tough; go for your new business with everything you have and don't hesitate. You will have many wins in building your business -- but nothing worth doing is effortless.

Is Entrepreneurship Becoming The Purview Of Upper-Class Men? - Forbes

Posted: 31 May 2019 11:51 AM PDT

Entrepreneurship is rarely an individual endeavor.

Getty

One big cultural change in America over the past 20 or 30 years is that entrepreneurship has become glamorous. A big CEO once illustrated this to me by explaining that when he went to Harvard Business School back in the 1980s, hardly anybody planned a career in entrepreneurship.These days, hundreds of graduates of elite business schools pour out each year, stars in their eyes and startup ideas in hand.

Their presence has changed the whole conversation around small business and entrepreneurship. We have an image now of entrepreneurs as white venture-capital funded men, young wunderkinds who become billionaires, float around on yachts, play with flameflowers and build apocalypse houses in New Zealand.

Yuck.

I wondered about the current popular image of entrepreneurship as I read the Kauffman Foundation's report, released this spring, on capital access for entrepreneurs.

It puts hard numbers to the barriers to entrepreneurship. We might argue about what those barriers are, or which to focus on fixing, but you can't read the report without realizing how high and systemic they are.

Overall, the shape of the American entrepreneurship begins to emerge from the picture of the funding flows — and it's a not a flattering picture of opportunity in America, not one that fits with our bootstrap myth. What it suggests to me is this: Entrepreneurship has always been the purview of white men more than women and white men more than men of color. Now, class is even more a factor in our concept of entrepreneurship.

Consider these stats, all drawn from the report:

• "Data from 1996 to 2017 show that men are consistently more likely to start businesses each month than women, and 2017 was the first year in which the rate of black and white new entrepreneurs was the same."

• "Historically, between 1953 and 1998, less than 5% of total venture capital funding went to women-owned firms. Pitchbook data for 2017 showed that all-women founding teams raised 2.2 percent of total VC funding (accounting for fewer than 5 percent of deals), compared with all-men teams that raised about 79 percent, and mixed teams that raised about 12 percent of total funding."

• Though our image of entrepreneurs is dominated by those starting tech businesses, "at least 83 percent of entrepreneurs do not access bank loans or venture capital at the time of startup. Almost 65 percent rely on personal and family savings for startup capital, and close to 10 percent carry balances on their personal credit cards." Some research suggests that women face less discrimination in the lending world.

• Many entrepreneurs rely on personal resources to start their companies. "The median net worth for white families was $171,000, compared to the median net worth of $17,600 for black families and $20,700 for Latino families." 

• "Five metro areas—New York City, Miami, Los Angeles, Houston, and Dallas—were estimated to have contributed to 50 percent of net new firm creation between 2010

and 2014. In addition, VC industry data reveals considerable geographic and industry concentration. Close to 80% of about $21.1 billion in VC funding in the first quarter of 2018 was disbursed in five regional clusters— San Francisco (North Bay Area), Silicon Valley (South Bay Area), New England, New York City metro, and LA/ Orange County—with slightly more than 44% in the North and South Bay Areas."

On one hand, you can say that the big cities are talent draws, and that the money follows the talent. On the other hand, based on the skewed picture of how many men versus women are funded, you can guess that there's more of a network effect going on here: the money and power is flowing among people who already have it.

• "Research at the neighborhood level found that in New York City, the richer third of neighborhoods had more than twice the rate of self-employment than the poorest third. The top 95th percentile of wealthy individuals in the United States is more likely to start businesses than other income groups, and that personal and household wealth are important drivers of entry."

Why is all this important? Startups create a lot of the new jobs, period, in the economy (some economists say they are responsible for all new job growth). But the rate of startups in the United State has declined over time, though it's up a little since the end of the Great Recession. But the share of jobs that startups add to the national economy is falling: Per capita startup job creation in the first year declined from 7.52 jobs in 1998 to 5.27 jobs by 2017, according to Kauffman.

At a certain point, perception becomes the reality. Entrepreneurship has been defined subtly by our national conversation away from Main Street, from industry and from service, toward technology, a sphere that is dominated by white, wealthy men. Those companies are easy to start, can be run with fewer employees at the beginning — and create a winner-takes-all mindset.

That version of entrepreneurship I described at the beginning of this piece isn't the reality of entrepreneurship in America — but we are drifting in that direction.

How to navigate the world of startups - The Hub at Johns Hopkins

Posted: 30 May 2019 12:15 PM PDT

For aspiring entrepreneurs, the thought of building a company from scratch can be daunting. What if no one wants to buy what you're selling? Where will the money come from to grow the business? And what will happen if you fail?

To get some answers, we talked to six Johns Hopkins Carey Business School alumni who have seen it all before. These seasoned entrepreneurs told us their stories, from choosing the right business idea to raising venture capital, and shared their best advice for launching a successful startup.

Every successful company begins with a great idea, but how to choose that idea is up for debate. Billionaire tech entrepreneur and Shark Tank co-star Mark Cuban is known for dishing out this unorthodox piece of advice: Don't follow your passion. He tells aspiring entrepreneurs to devote their energy instead to something they're naturally good at. Carey alum Jack Hirsch, a member of the charter Global MBA class of 2012, would respectfully disagree.

"Before you start a company, make sure that you're solving a problem that is already keeping you up at night," says Hirsch, who developed software to help people find lost computer documents at work. While most people wouldn't lose sleep thinking about a better way to search for files, it was a problem Hirsch was excited to solve.

"Somewhere between 30 to 50 percent of knowledge workers' time is spent finding information at work. A lot of that information lives in documentation, and that documentation is siloed away somewhere you can't find it," he explains, using the same pitch details that landed him millions in seed funding for his startup, Butter.ai.

Not only was Hirsch passionate about saving workers' time, but he was also following part of Cuban's advice by pursuing something he was naturally good at—programming and technology. The combination proved to be a winning formula. Less than a year after he launched Butter.ai in 2016, the company gained enough traction to get acquired by the cloud storage company Box.

An inventor planning

Angel investor Karen Appleton Page, who graduated with her MBA from Johns Hopkins in 1997, agrees that entrepreneurs like Hirsch need to be passionate to garner her attention, but she says a keen understanding of the marketplace can be even more important than a good business idea.

"Where is there a problem, and why? And what are you proposing to do to solve or change that?" she asks. "In order to understand what the problem is, you've got to start talking to people who feel the pain of that problem. … You need some validation."

A veteran business development executive, Appleton Page joined Box in 2007 as its eighth employee. She cashed in eight years later when the company went public with a valuation of $1.7 billion. Today she pays it forward by mentoring entrepreneurs and funding early-stage startups.

For serial entrepreneur Clarence Wooten, who graduated in 1998, coming up with business ideas has always been the easy part. The challenge is finding an idea that stands up to scrutiny and is fundable.

"I'm an ideas person. They just come out of me," says Wooten, who has launched more than a half-dozen companies in the past 25 years. "After I come up with a great idea, I usually spend a couple weeks trying to talk myself out of it, and if I can't talk myself out of it, I become convinced that it's something the world needs."

Get ready to hustle

Once you have an idea you believe in, the real work begins. For most entrepreneurs, that journey starts with exhaustive networking, research, and fundraising.

Wooten, a Baltimore native, says he went "from Silicon Valley to Silicon Alley" trying to raise money for Image Café, an online marketplace of template-based websites for small businesses, which he thought up as an undergrad at Johns Hopkins.

As an African-American, Wooten has been an outlier in the world of California tech startups, which faces criticism to this day for its lack of diversity. He readied himself for Silicon Valley by reading the Michael Wolff memoir Burn Rate and scouring the internet for venture capitalists using Alta Vista (this was 1998, when Google was still in its infancy).

"No one in my family had the means to invest in any of my businesses. I literally had to build a brand new network from scratch of high net-worth individuals, which is not the easiest thing to do when you don't come from that world," he recalls. "I didn't even know if I fit the description of the kind of guy you would write a check to in the tech industry. I didn't look like Mark Zuckerberg, that's for sure."

He raised $750,000 by pitching his idea to angel investors. Image Café launched in April of 1999—near the height of the dot-com boom—and seven months later it was acquired for $23 million by Network Solutions/Verisign.

"Timing is everything," says Wooten, who had become a millionaire seemingly overnight. "It definitely set my course as an entrepreneur. I knew I would never work for anybody again."

To raise venture capital, entrepreneurs first need to land meetings with investors; that's where research and networking come in, says Appleton Page. She tells people to start by identifying firms that offer seed funding and align philosophically with their company's mission. From there it's about working contacts—LinkedIn, friends, relatives, and business school connections—to see who can create a pathway for an introduction.

"Once you get the introduction, then you're on," says Appleton Page. As an angel investor, she offers funding to about half the entrepreneurs who pitch to her in person. "By the time a pitch gets to me, it's pretty much been validated by my network or by my community."

Unfortunately, not all pitch meetings go well.

"There's no amount of emotional preparation that will make it feel OK when you go into a pitch meeting and they laugh you out of the room," says Hirsch, who pitched his startup, Butter.ai, more than 70 times. Without a boss doling out motivation and reassurance, you need a lot of personal determination to keep pushing forward, he says.

"You need grit," Wooten advises. "That's the bottom line. I would say the less affluent and connected you are, the more grit you need to make up for that."

Grow at the right pace

Mehr Pastakia, who received her MBA in 2016, was determined to grow her green roofing business cautiously, in large part because she was financing everything herself.

She launched Pratum Greenroofs in 2012 while she was a student at Carey, starting with a rooftop makeover at the Legg Mason Tower, Carey's home building in Baltimore. When the business began to grow, she rented a cheap co-working space for $500 a month and decided to invest as little money as possible up front.

"One of the challenges in starting and scaling a business is what comes first, the chicken or the egg? Do the contracts come first, or does the infrastructure to sell work and implement more work come first? If you focus on the latter earlier on, then you end up taking on debt," she says.

Being financially conservative worked for Pastakia. In less than three years, Pratum landed contracts to maintain more than a dozen green roofs for several prominent Mid-Atlantic property developers and management firms. "One of my successes is that I didn't owe anybody any money at the end of the day," she says.

Entrepreneurs should avoid raising capital unless they absolutely need to, advises serial entrepreneur Pat Sidhu, who received an MS in finance in 1993. He has made millions starting companies from scratch and selling them, and says that while getting outside investments can broaden your network, it also gives you less control over your company.

"Don't do it for the hype. Do it because it really makes business sense," recommends Sidhu, whose businesses have run the gamut from kidney dialysis to mortgage lending to educational services.

"After I come up with a great idea, I usually spend a couple weeks trying to talk myself out of it."

Clarence Wooten

Image Cafe founder

Even startups with plenty of venture funding should be careful not to over-invest early. Nearly 75% of high-growth internet startups fail because of premature scaling, while startups that scale properly grow about 20 times faster than their peers, according to a 2011 report by Startup Genome, an Oakland, California-based organization that studies "startup ecosystems."

"If you have the ability to raise capital, raising too much can be an early death knell. It can set expectations too high. It can force a frantic search for growth," warns Hirsch. "Oftentimes you bring more people in and invest more heavily … in things that can mask failure."

He also recommends engaging with potential customers early, even if your product isn't ready to launch. To drum up enthusiasm for Butter.ai, he published an article on Medium.com that led thousands of people to sign up for updates. Those signups eventually became his first customers.

Entrepreneurs should always plan ahead and expect the unexpected, advises Sidhu. Without the right resources, new companies won't have the flexibility to adapt to unforeseen changes in the market.

What you believe the market is, is rarely how it ends up. What's your plan B, C, and D? You've got to have those in your head all the time," he says. "You've got to be smarter. Work harder. Work faster."

Fail fast and fail cheap

Sometimes even the best-laid plans can't keep a new business alive—and that's OK. Only 18% of first-time entrepreneurs succeed, according to a 2006 paper by Harvard researchers. The prospects don't improve all that much even for repeat business owners who had a previous company go public: Only 30% succeed with their second effort. In other words, failure is something all entrepreneurs are likely to experience at one point or another.

Hirsch admits to having had "a long string of failures" before his success with Butter.ai. One of his lowest moments was when an online travel startup he was working for, GoPlanit, tanked during the 2008 financial crisis. Three months later he couldn't afford his rent in San Francisco and was forced to move back in with his parents.

"I had been independent, on my own, since the age of 17. So that was a hugely shameful experience for me," he confesses. "There is so much grit that is required to get though those stages."

Wooten is also no stranger to failure. In 2011 he launched a social networking platform, Arrived, and moved his entire team from Maryland to Silicon Valley. A year later, the startup died because it was unable to raise series A funding.

Illustration of Icarus crashing to the ground

"Failure is part of the process. The key is fail fast and fail cheap," says Wooten, who went on to launch three more companies.

Last summer Sam Huleatt (MBA '08) decided to shutter his New York tech company, Heights Media LLC, which specialized in online advertising using algorithmic trading strategies. After eight years in business, he found that structural market changes and big players like Google made it too difficult to compete. He's working to launch his next entrepreneurial venture.

"The culture is: Hey, it's OK if you fail. You can always try something again or take some of the skills that you learned and apply them in the setting of another company," says Huleatt. "Failing at a startup isn't perceived as negatively as it once was, he adds, especially in the tech world."

Pastakia decided to close Pratum Greenroofs last year after struggling with unforeseen changes in the D.C. market. A new company had popped up with a disruptive rooftop-farming model, and two of the city's biggest roofing contractors shifted their garden maintenance in-house. The high cost of living and doing business in the District was also a contributing factor.

"When I ended Pratum, I was really content with the way that it ended," she says. "The process of having my own business got me to the point where I stopped and took stock of what's really important in life and readjusted my direction."

Take care of yourself

Carey alumni agree that starting a business is always a wild ride. The highs can be euphoric when sales are up and the money is flowing in, but the lows can be downright miserable.

Huleatt remembers an especially tough episode when his first company, Workstreamer Inc., was on the verge of getting acquired in a lucrative buyout. All the documents had been drafted and everything was set to close when the stock market took a nosedive. It was around the time of the 2008 financial crisis, and the deal ended up falling apart.

"You're constantly up and down emotionally," he says. "There's a whole mental health aspect of being an entrepreneur that is really challenging. Generally you're expected to portray things as going really well even when they're not."

Pastakia can relate. She remembers being so focused on her business that she was neglecting other important parts of her life. The stress made it feel like things were always on the verge of collapse.

"You can essentially disassociate from reality because you get so focused on what's going on in your company," she says. "It's very easy to identify yourself by your business … so when things don't go right, it's like, 'I'm not good enough.'"

Running a business can involve grueling work hours as well. One out of five entrepreneurs report working more than 60 hours per week, while nearly half work more than 50 hours per week, according to a 2013 survey by The Alternative Board, a Colorado-based provider of advice and coaching to business leaders.

Pastakia advises fellow entrepreneurs to practice self-care, including exercising and getting enough sleep: "When things start to go wrong, you need to have clear thinking, and you can't think clearly when you're tired."

Savor your successes

For those with an entrepreneurial spirit, few things are more rewarding than starting a company and watching it grow. The alumni say the satisfaction of creating a useful product and being your own boss is hard to beat.

"It's a pretty intoxicating feeling to know that you can take something that was an idea in your brain and turn it into something that can make millions—in a matter of months, in some cases," Wooten says. "Once you get a taste of that success, you see yourself as an employer, not an employee."

For Sidhu, the best part was the validation. In the early 1990s, he struggled to convince his father, a physician, that he should go into business for himself rather than pursue a career in medicine.

"Startup," meaning a new business enterprise, wasn't a widely used term at the time, "so I couldn't explain really what was in my mind," Sidhu remembers. "The most fulfilling part—it wasn't so much the money—it was to say, 'Hey, this is what I was saying I was trying to do.'"

Money wasn't the primary motivator for Hirsch either. He says he has always been more interested in solving the problems he's passionate about.

"There are a lot of people in this world who are not driven by money. They are driven by impact," he says, noting that people who are focused on the money shouldn't start a company. "I could have done just as well financially joining Facebook four years ago … but what's the fun in that?"

At the end of the day, the alumni say, there's only one way to truly learn about starting your own business: Go out and do it yourself.

"You've got to be willing to jump off the cliff," says Wooten. "The more you jump off of cliffs, the more you believe you're going to fly before you hit the ground."

This article originally appeared in Carey Business, the magazine of the Johns Hopkins Carey Business School.

Reinvent Your Business To Find Market Fit - Forbes

Posted: 31 May 2019 05:00 AM PDT

(Full disclosure: I was formerly a mentor in Google's accelerator and hold stocks in Amazon.)

It was 2010 when I moved my husband and two babies from Israel to California to start the U.S. branch of an IT automation startup. My team in Israel was sure that our product was the best thing since sliced bread, so all I needed to do was show up and collect the money. It never really works that way, does it?

Meeting after meeting didn't convert into a deal. I realized our product didn't add enough value to our customers for the price we were charging. Our company was running out of cash. We would need to start laying off employees if we didn't figure out our market fit fast. We could reduce the price significantly -- making our startup unsustainable -- or change the product. But how?

Market fit is the number-one killer I see of companies today. Startups often create products that no one wants or no one will pay for. Many bigger companies keep selling products that are no longer relevant.

So how do you reinvent your company to find market fit?

1. Industry And Product Debrief

OK, it's time to understand where you really stand. Make a list of companies using your product extensively, those using it only on the side, and those using it on a demo station or pilot. Then list companies that didn't want your product or are using a competitor's. Add key folks within your organization who work close to customers. Their experience will be key. Sit with each person on your list and truly understand what value they get out of your product, where they use it daily or what would make them use it more. Where does your product fail?

Analyze all your answers and brainstorm: What is the true value you are providing, or should be providing, to your customers? For example, Amazon's value in the past wasn't just selling books online but their convenience and nearly unlimited selection. What's your true value?

2. Experimentation To Achieve Growth

Decide on some changes you want to try out and some basic success criteria to measure. Avoid endless planning and instead rapidly build prototypes and test your riskiest assumptions. You can test many elements quickly, like new marketing messages, different ways to get traction or changes to the audience you are targeting. You can create demos, mockups of the new capabilities, simple ads to try different messages or different landing pages to measure your audience's reaction. Test and iterate in the market before scaling.

3. Making Room For A Culture Of Experimentation

Experimentation means that sometimes those tests will result in failures, wrong directions and assumptions that didn't pan out. The organization will have to support this effort for it to be successful and to provide space for individuals to dare to try out new ideas. Innovation culture will have to come from the top.

Netflix's evolution from a company renting DVDs to streaming entertainment and now creating its own content is a great example of continuous reinvention. Apple developed from a computer manufacturer to a music and lifestyle brand through iPhone and iTunes; it reinvented itself even as it continued to build computers. Google went into the smart home space through the acquisition of Nest for $3.2 billion, but it is also extremely well-known for promoting innovation from within. 

Your executive team will need to push for innovation at different levels and different fronts. They will need to clearly decide what kind of return on investment (ROI) they need, expect, and desire and align their innovation accordingly. For example, acquiring a company will usually cost more in dollars but will take less time than developing your own team, technology and market. Investing in startups (like Intel Capital and Google Ventures do) or creating your own startup accelerator programs as some corporations did (like SalesForce and Microsoft) will be longer-term commitments and may not generate revenue for a long time, but these ventures can lead to various gains such as a stronger ecosystem, better usage of tools and of course, insight to what's coming and how it's doing.

There are countless articles discussing how to create a culture of innovation, from giving employees the freedom to think, brainstorm, and make mistakes to empowering individuals to influence a product or road map. I won't go into it here, but I'll only say that innovation isn't something you just talk about -- it needs to be driven and engraved within the organizational culture and priorities, and you should dedicate specific employees to making it happen.

4. Starting Small

In 2013 Intel created Vaunt smart glasses, poured money into the project, and reportedly had about 200 employees on a project that never took off. It closed in 2018. Webvan was a startup for online grocery shopping founded in the 1990s. Based on an extraordinarily promising business plan, they raised $1.2 billion (yes, with a "b") in startup capital. They were rapidly expanding instead of slowly testing the market and their assumptions. In 2001, they closed.

We now know that starting small with agile experiments and progressing fast is one of the best ways to stay lean and innovative and reinvent your business to stay relevant.

Remember our IT automation startup that I talked about at the beginning that didn't have market fit in the United States? These are the exact points that saved the business. By working very close to our desired customers, I learned that their automation needs were different from what we originally assumed. The value we provided needed to shift to make us a relevant platform. With an amazing team and very rapid experiments and by working as close as possible to the customers, we changed course and extended our platform. In the next couple of years, we took off.

So, what are some of the experiments you need to run in your organization in order to reinvent your business?

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