Bootstrapper.com - Confessions of Serial Entrepreneurs

So this post is dedicated to my new friend Olivia. Olivia is the most charismatic person I’ve ever met and somehow when we met, sparks just flew to the point where we can never finish a conversation, it just naturally flows into something else. Now that would be great by itself but Olivia is also enlightened. She teaches charisma (manipulation) at MIT and Harvard. Yes, she teaches people how to make other people like them. And it works. She has instilled in me the importance of learning the science behind how we (people) work, think, organize and operate. It’s a really valuable thing if you understand how people think, it pays dividends in all sorts of interesting ways. Now, Ms. Olivia also happens to be one of the few people that just naturally puts me in a great mood and I suggest everyone to surround yourself with people you have natural chemistry with as it will lead to happier times.

PS. One word of caution, in order for chemistry to be fully realized, both parties need to be open and transparent (relatively) to be able to handle real feedback, criticism and ideas. If one party is not of an open mind, eventually the relationship will hit the rocks or you’ll end up full of shit with each other. Neither of which is good.

So this post is also dedicated to Barry. He suggests that everyone should build a mastermind group around them. What is that? A plot to take over the world? Nope. It is essentially a collaborative brainstorming group that meets regularly with the goal of its members helping each other on a continual basis. If you’ve attended my collaborative brainstorming meetings, its that concept but where everyone is on relatively the same level and meets regularly and in an organized fashion. My friends Matt & Sergio and the guys at EO.org essentially use these groups as key to their programs. I suggest everyone should grab 2-3 people at the same level as them and then have everyone invite 3 good people and then you have a group! meet once a month and keep a list serv or google group going and hopefully it’ll help.

This lesson is dedicated to how to build the best organization around you. The first and most important thing is to surround yourself with only positive, energized people. In any startup or new situation, success depends on the people more than anything else. Happiness tends to breed happiness, so by surrounding yourself with honest (relatively), hard working and POSITIVE people, you will have a much better chance for success. Positive attitude is key to succeed in anything you do. Keep smiling.

Today’s post is dedicated to a new friend of mine, Barry Sarner. I recently met Barry and during a great and entertaining lunch, he hammered into my head the importance of having a “core business”, generating cash and then worry about all the ADD stuff. He said he learned that watching the Persian and Sephardic businessmen. They have one business that they guard ferociously that pays the bills and then can use that cash flow to build other things. Most of us serial entrepreneurs, tend to try to multi-task, spread ourselves too thin in terms of time and money and end up accomplishing nothing. However, if you focus, make one thing work, get it to throw off cash, then you can methodically build dozens of other companies by hiring the right people and not putting too much stress on your pocket book. So my goal for the new year is to build a “core business”. I suggest the same for everyone out there.

So over the past few days, I’ve come to learn (finally) a lesson that my friends and family have been trying to beat into my head for years. What is it?, you ask… well, … It’s that few things are as urgent as we make them out to be and if we can take a step back and handle them slowly and methodically, they tend to get solved with much better solutions. I’ve been rushing for nearly my entire career and for the first time ever, I was able to really take time off and not stress over work and think clearly. As a result, I’m more focused than ever and am going to do my best to avoid doing stupid things. There are few things more powerful and empowering as a clear, focused mind. My advice to all is take a breather before reacting to things, think through them, then act….there’s probably no reason to run 100 miles an hour when 20 MPH will do just fine and be less likely to crash.

I want to wish everyone a Happy Happy New Years! I’ve had both a very positive year (TakesAllTypes.org Was Launched) and a very negative year (I’ve lost a lot of money and have been burned) but my New Years Resolution is simple: eliminate all negativity in my life. My friends, my blog, to me, is a very personal thing, over the past 18 months or so that this blog has existed, I’ve opened my heart, my mind and my soul to you and I just hope everyone understands the way I look at our relationship. I expose myself and hope through that exposure you can understand me a bit better.

I hope everyone else has a positive new years.

I am often asked what VC’s typically look for when performing analysis/due diligence on a business plan. Below is a plain and simple outline on what they look for:

1. Cover Page

1. Table of Contents

1. Executive Summary
   1. Company Intro
   2. Concept and Mission
   3. Mission Statement
   4. Strategy
   5. Company’s Products and Services
   6. Market Analysis and Trends
   7. Competitive Analysis
   8. Value Add of the Company
   9. Financing Amount, Purpose and Time Span
   10. Milestones
   11. Management Profile
   12. Financial Summary
   13. Exit Strategy

1. Company History and Current Status
   1. How Company Started
   2. Founders and Personnel

1. Revenue Model
   1. Nature of the Business
   2. Profit Margins of Industry

1. Technology, Products and Services
   1. Description of the technology (include diagrams)
   2. Value Add
   3. Competitive Advantages
   4. Proprietary Nature
   5. Current State of Development

1. Market Analysis
   1. The Overall Industry
   2. Market Segments Targeted and Rationale
   3. Customer Profiles (needs met/unmet, buying patterns)
   4. Describe how the company’s products will meet the needs of intended markets
   5. Describe all industry forces (suppliers, buyers, threat of substitutes)
   6. Barriers to Entry
2. Competitive Analysis

1. 1. Competitor Profiles (History, Segments Served, Market Share)
   2. Provide Solutions to Breech Entry Barriers
   3. Competitive Advantages (IP, etc)
   4. Anticipated reaction from competitors upon market entry

1. Sales and Marketing

Sales

1. 1. Material, Labor, Overhead Costs
   2. Methods of Promotion and Distribution
   3. Revenue Model
   4. Customer Selling Approach

Marketing

1. 1. Identify customer purchasing decisions and trends
   2. Identify current needs served and unmet by competition
   3. Identify company’s positioning (quality vs. price, innovator vs. adaptor, follower vs. leader, private sector vs. government)

1. Management Profile
   1. Background Information
   2. Capabilities
   3. Management Gaps
   4. Organizational Chart

1. Financial Strategy

Financial Operations

1. 1. List of all loans and terms
   2. Operating Budget
   3. Milestones
   4. Pro-forma income, cash flow and balance sheet

Financing

1. 1. Breakeven Analysis
   2. Amount Needed, Time Period, Total Amount Required
   3. Capitalization Table showing the amount raised and the percentage of ownership
   4. Exit Strategy

In my parent’s living room, the sound of keys being pressed is incessant, never-ending you might think. As a practicing attorney, even when I’m home I have research that I’m doing or various legal documents that I am writing.  However, the around the clock noise really comes from my brother, who is seventeen and applying to college.

Applying to college after you’ve already been is infinitely less stressful than when you’re doing it the first time around. However, the questions are certainly tougher. Or maybe they only seem tougher.  Over the past few weeks as I’ve helped my brother decide how to go about answering these questions, I’ve been given the unique opportunity to reflect. I won’t take you down memory lane but I will tell you that the questions colleges are asking are the same ones you should be asking as an entrepreneur. Here’s a few that you might want to consider answering for yourself or for the rest of us who read and write on this blog…

1. A list of books you have read in the past twelve months
2. Please tell us about how you have spent the last two summers
3. Describe a trait or characteristic that has been passed along to your family. Tell us why you like or dislike this aspect of yourself.
4. “We might say that we were looking for global schemas, symmetries, universal and unchanging laws-and what we discovered is the mutable, the ephemral, the complex.” Support or challenge Nobel Prize winner Illya Prigogine’s assertion.
5. Identify and discuss a person who has helped shape culture and thought. You may select someone from any field: literature, the arts, science, politics, history, athletics, business, education, etc.
6. Reflect on an environmental scene that is important to you, paying close attention to the relation between what you are seeing and why it is meaningful for you.

It struck me that after we stop applying to college(s) , we stop asking these types of questions. Might we also be closeting ourselves from new ways of doing? To put it another way, if you believe in the value of interdisciplinary learning and thought, what disciplines beyond your industry and your business have you spent time thinking about lately?

So I’ve come to the realization that our community doesn’t relax. We’re always uptight, always analyzing, always thinking and it’s not even intentional, it’s just second nature to a bunch of people with ADD who don’t want to waste their time. But it’s a challenge in that it makes it really hard to relax when everyone has their guard up. My theory is everyone has one thing (or should have) that they can truly relax doing, taking them out of their day to day mindset and being able to truly just be in the present. It’s a tough thing to do though. I know for me, there’s nothing I like more than being able to go out with friends and not have to think, not have to speak or If i do, be able to act like an idiot

Why?

Because I’m so wound up during the day with all that’s going on and being a crazy entrepreneur that it’s nice to just be able to be BLAH sometimes. Turn off. Remote away. Computer closed. Phone in another building. etc….

An interesting point I’d like to bring up is about Community Organization. The now famous term said by our great President more times than anyone can count during the election. Somewhere along the way, I started drinking the Kool-aid and started calling what I do in the tech community “community organizing”. Now I want to take a moment to discuss organizational structures and what’s powerful.

Is it powerful to have a loose structure of support organizations that rise up in support of something? Yes.

Is it powerful to have a top down well run, oiled machine pushing the agenda forward? Yes.

But is it even more powerful to have many supporting organizations rising up on their own regard under the guise and with the gentle nudge of a central organization that everyone can rally behind. YES. It is perhaps the most powerful organizational structure of all when you can have one message and many people delivering it on their own terms.

I think this is what our community needs - an organized message - Harry Truman once said “I want to talk to the Jewish Community but I don’t know who to speak to”. We have that problem today. Dozens of great organizations representing 170,000 people and around 15,000-20,000 active people but if an outsider wants to come in, where do they go? If government wants to support us, where do they go?

No where right now.

So it’s 2:16AM and I just got back home. Tonight i went over to an old friends place and as I was leaving stumbled into a little piece of nostalgia - The Silicon Alley Reporter 100 from 2001. It’s fun to take a look through annals of history and see old friends and new friends but most importantly to remember that our great community once had a glossy magazine!

So I have a problem. I hate when people don’t like me and i try to appease people. I made a promise to try to be more direct a few weeks ago but didn’t keep it. I let things simmer and I tried to appease people. I ended up getting into a fight with my business partner, who I completely respect and love as a result of feedback from someone who has made it clear they don’t like me. Now, you won’t find a single person in the community that I have screwed. You seriously won’t. If you do, please publicly come out with it and I’ll take full responsibility for it. But still people don’t like me. Sure, I’m brash and out there and enjoy sparking debate and controversy but that’s community folks. Discussion, debate and dissension.

So a friend of mine didn’t know of this stressful occurrence and sent me an email that I thought was very important.

“You got people in this world who will do anything for you because your a
great friend like myself. You should start to focus on the people who look
out for you rather than the people who spite you. I know things were
difficult when you broke up with your girl and that stuff hurts man but
you are a very successful guy and people genuinely love working with you.
When you have 95% of the population that likes what you do and appreciates
and another 5% who doesnt. Are you going to focus on the 5% or the 95%?

Steve”

So that’s what I learned today.

PS. If you’re in the 95%, I’ll be happy to buy you a cup of coffee and get together. If you’re not, then good luck to you Sir but don’t drag me into your life please.

Hey everyone,

So I’d like to announce my public support officially for Nate. I sat down with him the other day and we talked for a bit. I think he cares about the community and will try to make it better. We disagree on a lot of things but I hope to work with him going into the future. Only together can we all make the community stronger.

So I’m hosting a contest for the next blogger on Bootstrapper. If you’d like to blog on here - email me a sample article - rich at bootstrapper.com and my editorial team will choose one new person to add to our team of volunteer bloggers.

Hey everyone,

I’d like to share my attitude towards people. So I’m a bit of a polarizing figure and I suppose I bring it on myself. I like controversy as it breeds discussion, excitement and interactivity. Along the way though, I run into people who don’t like me, sometimes even despise me. My attitude towards people who don’t like me is this … well first let me take a step back and say I really can’t stand when people don’t like me, call me self-conscious but i really like people to like me…back to the topic at hand….

If you want to criticize me, please go right ahead and do so, however I ask that you do it in person so I can learn from it - in fact, I’ll even buy you lunch. That’s right, people who want to do nothing but call me an asshole, I will lunch for, or perhaps a drink or coffee or even a nice dinner. Secondly, I invite you to blog on Bootstrapper and call me out on my own forum.

Why do I do this? Well, my premise is that if people actually get to know me, they usually see what I’m about and like me. Sure, I’m rough (very) around the edges and often need to be interpreted but I always try and it’s fun to help people so I think (Hope) that’s the way I come off in person.

It’s very easy to criticize from a bully pulpit but that doesn’t do anything but encourage hatred vs. an in person discussion.

In my nearly a decade as an entrepreneur, I’ve had 3 primary legal scuffles. Two of them the people on the other side I became friends with after. You never know whose on the other side of the table or the rationale until you sit down and talk it out.