Burning the Boats

This is something that has been circulating in my brain for the last few weeks. I’m not talking about torching a yacht or two. I am actually talking about a venture capital cardinal rule.  Basically, go all in or walk away.

The story goes that when Cortes set out to conquer Central America, he made sure that his troops were committed to the effort by burning the boats once they hit the shore. That meant no surrender – either you conquer or die.

To me, this has become an obvious necessity for a successful startup.  In my current role as CEO for a very young startup, I am seeing this everyday as I struggle with a high-level sales executive that has never given our venture 100%.  Leaving a big corporate job in December, he said all the right things and seemed excited to help grow our business.  Yet it was quickly evident that any work after 5pm was not happening, forget about the weekends, and on a good day work my start by 9.30am.

As a virtual company, you have to put a lot of faith in your people that they will do their jobs.  Blind faith is easy when you have results, but when the results are not there – doubts start to arise. Combine this with a less-than-hoped-for work ethic, and you start to realize that your all-star employee has never really worked for you at all. Instead, they are treading water and waiting to see if your company is going to “take-off”. Sort of like standing in the shadows until you are sure your side is going to win the fight.

I don’t have an answer to this, at least not yet. I am fighting it right now, how do you burn the boats without ruining the morale of your troops?  Working on that.

Fuck You Money

How’s that for a blog post title!

I read that phrase yesterday on a blog post by Joe Stump and it reminded me of how true that phrase is.  Before entering the world of startups I had never heard it put that way – in the world of Big Corporations, the term is just rich. The execs fly on company jets and have vacation homes.  They may have “fuck you money”, but they have more than likely grown into it and are now spending just as much as they are making. 

In the startup world, one of the main lures (behind being your own boss and chasing your dreams) is the possibility of making a decent payday with the sale of your company. The urban defintion of “fuck you money” is:

An very large amount of money, which would enable an individual to do pretty much whatever the fuck he or she wants. Fuck you money is not a fixed amount, but is just much more then anyone could realistically put to good use.

Gordon Gekko in the movie Wall Street had a similar notion…

I’m talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

Everybody’s exact definition of fuck you money will be different – is it $5mm, $50mm, or $500mm? What’s my number? I’ll let you know when I cross it…!

Tradeshow 101

This past week I was in New Orleans at a medical conference - the startup I recently joined had a 10 by 10 booth and we were literally “launching” the brand at this show. I don’t want to say it was a “make or break” show, but it was. We need sales, we need exposure, and we are literally a 2.5 person team running on adrenaline and hope. The show was going to tell us a lot about where we were going to be in 2 months.

The show went very well. I would say phenomenal, but we need to execute over the next couple months in order to make me say that (stay tuned). But, looking back, I did take away a number of key points about the tradeshow and how best to execute upon them going forward. There is no order to these, just what is coming to my mind…

1) Pick the right tradeshow – if you have limited resources you cannot waste the time and money on slow shows… Pick the ones that will have the most potential customers…

2) Spend the money to make your booth standout.. Don’t use the standard banner and table.. Lights help, lit signs are better.  A flat screen TV with a video reel is slowly becoming imperative.

3) Pay for padding. Simple. People’s feet will hurt (including yours). Make sure they want to stay at your booth longer just by making the padding thick.

4) Have something to handout. Brochures. Information cards. Something other than just a business card.

5) Bring water. Plenty for everyone manning the booth.

6) Put in the effort pre-show. Mail postcards to your target audience asking them to come to your booth. It works.

7) Be prepared to sell. Invoices, payment methods, shipping details.

8) Look out for guys that will go and knock off your product. You cannot avoid it. Make sure you have your IP in place.

9) Get in a day ahead of time. It will let you get comfortable with the area, and you have time to overnight anything to the show that you forgot.

10) Last, make sure everyone at your booth has the exact same sales pitch. Prospective customers will make multiple trips to your booth sometimes, you want them to get the same pitch each time.

Knowing when to let go

Since January I have been transitioning into the role of CEO at a start-up in the medical industry.  The founders approached me as an advisor over a year ago, and after spending many nights and weekends working to help them form a strategy, I finally agreed to take the reins.

Over the past few weeks we have gone through our growing pains, as the founders (2 of the 3) are having a hard time letting go of the steering wheel. While they definitely want someone else to make the decisions, they still want to have their hand on the shifter as we change gears and maneuver the course.

I saw this with a number of entrepreneurs in my previous (2 jobs ago) role as Principal at a private investment firm. Guys would come in with great ideas, but when we asked who was going to run the business and take it to the next level, the most common response was “me, of course!”  

The logic behind that is that who would know better about the business than the person (or persons) who started it? The flaw in the logic is that those who started the business are the visionaries, and are rarely the ones who have the acumen to make the decisions to move the company forward.

I spent less than 5 minutes searching online and found a number of different posts / articles on the topic. One of the best I found was Ten Lessons for Entrepreneurs By Kerry Patterson. While I don’t necessarily agree with the analogy to Steve Jobs (I think he has done a tremendous job running the company – both times), I think the key points are still valid. Business Week and the WSJ have also both ran articles on the topic.

The basic summary of all of them, the majority of true entrepreneurs who have the fortitude and vision to bring something from a simple idea to a working product are generally not the same people who can take that working product and launch it to the masses. There are the certain few that can, but at the first hint of difficulty, you owe it to yourself, your investors, and your customers to recognize the need for change and act on it.