Having gone to all three sessions of 2008 Summer Venture Camp put on by The Collaborative, I want to summarize the most important lessons that I took away from among all the information, expertise and advice given.
My business niche as a woman entrepreneur with Miri Market was not the primary target of most of the panel discussions, which seemed focused on med/tech start-up companies needing millions in venture capital. The Minneapolis/St. Paul area is especially strong in this industry, being home to Medtronic, St. Jude and Guidant, plus we have a world-class University that makes strong contributions in med/tech research. But the same things that make a strong candidate for getting venture capital makes a strong start-up company of any size, in any industry.
In the last venture camp session it was mentioned that you have to give people a message 9 times for it to stick. Much of what I focus on here are universal elements that were mentioned again and again - maybe not 9 times, but said by enough different people, enough times over the three sessions, that they “stuck” with me. The rest seems like just helpful good sense, to keep in mind as I build my company. So here they are:
1. Successful entrepreneurs need to be really FLEXIBLE. They also need to be completely dedicated; open to input; enthusiastic, but willing to learn; open to criticism; easy to work with; prepared.
2. Be sure to communicate to everyone - your employees, your board, your investors - IT’S ALL GOING TO CHANGE. You need to continually re-evaluate ideas, employee performance, compensation, priorities for spending - with the constant goal of making money and liquidity. Continually set up the expectation that things will be changing.
3. The saying, “Find a need, and fill it” is true. If you start with one idea in mind, and find that your customers are taking it in another direction or asking for some changes, go with it! Due diligence, market research, patent searches and understanding the competitive landscape can also help point you to the void that needs filling.
4. The main things to have down, which you must be able to communicate in a few, concise sentences, are:
-What’s your unique thing, your proprietary property/technology?
-How big is your market opportunity, your universe of buyers?
-What is the benefit customers receive from using your product? Will people pay for it?
-Management team. Management team. Management team.
5. When writing your business plan, make sure you have your above “story” together. Often a power point with supporting schedules will suffice, along with an excellent executive summary.
6. Hire people that are smarter than you. If you don’t have the knowledge and experience to get your company where it needs to be, find someone who does.
7. If you want to attract talent and have them work above and beyond for your success, give ownership as incentive - the earlier, the better. It’s difficult to lose key employees when you’re growing.
8. Don’t give up too much, too soon to your management team. Make sure they earn it, that no one is “dead weight,” then reward generously.
9. Be clear about the different components of your benefits package, and what long-term components reward as opposed to base pay.
10. If incentives are dependent on profit, put out the numbers so the employees know how they’re doing.
11. Consider that benefits have different value to different employees. Also think about the intangibles of your company that might help keep your employees. Create the right benefits and atmosphere for the employees you want to hire and keep.
12. Communicate, communicate, communicate - to employees, investors, public.
13. The right management team means having the right people at each stage. For example, having a bookkeeper –> having a comptroller –> having a CFO. Each time you add the right person, you’re adding value, even though the cash hit can be difficult at the time.
14. Constantly stay on top of cash flow. Check every day so you don’t have surprises.
15. Qualify your new customers. Set payment terms and credit limits. Follow up on slow payers. Offer discounts to get customers to pay more quickly. Offer credit card payment. Impose finance charges for late payments (and also use as leverage.) You can sometimes renegotiate terms with your manufacturers, suppliers. Convert sales as quickly as possible into cash in the bank.
16. Take the time to organize your board. Over time try to increase its sophistication to one that’s informed, and will take action when necessary.
I am an entrepreneur blogging about my observations, experiences and the business resources I discover as I start my own business. Please visit me at "Light, Motion and Magic" (lightmotionandmagic.com) and comment about your experiences as well!