Entrepreneurship and the Razor-Thin Difference Between Success and Failure

 

Friday Coffee Meetup:  Feb 10, 2017

Presented by Bill Cullen

Blog Writeup by Jan Young

Bill Cullen is a highly-respected executive with 40-plus years of C-level experience in media, mobile, consumer products and advertising businesses. He began his business career in banking and has held several senior finance positions in a wide variety of businesses including professional sports, real estate, restaurants and consumer, industrial and commercial finance companies. Bill is actively engaged as an adviser and board member specializing in strategic positioning, financial management and complex business dealings for early-stage and middle-market companies including a well-recognized travel comfort products company and a long-established sunglass brand, both enjoying rapid growth in worldwide distribution.

Bill came by FCM on Friday, February 10 to share some of his thoughts what he looks for when working with entrepreneurs and companies. Following is a summary of some of the highlights from his presentation and Q&A—you can also listen to the podcast here or on iTunes.

There are lots of paths to becoming an entrepreneur, but basically, it is about identifying, evaluating, and exploiting an opportunity. It needs to connect to a business plan with economic value. You’re shifting the paradigm. Today especially, the power is no longer in the hands of the corporation, the power is in the hands of the individual to start their own business.

One key attribute in a successful entrepreneur is the ability to be introspective. Can you assess your strengths? Are you positive? Do you have wisdom—good judgment and the ability to act on it? Can you get out of your own way? Are you decisive? Can you act on it? I have a software development friend that had some great software, but he didn’t know how to close. He’d meet with his customers and get excited about the next and new idea. He couldn’t close and get the current business, so he couldn’t build his company, and he couldn’t sustain his product. I rate this ability as the highest requirement for an entrepreneur.

Things move quickly in the internet age. You no longer get the time for an elevator pitch. Can you explain your idea in two sentences, 30 seconds—maybe 90 seconds. When writing to investors, if can’t explain it in two paragraphs, forget it. Is there really a market need? Did you do a competitive analysis? What does the landscape look like? There are rarely truly new ideas in business, so investors are skeptical if you don’t have comparisons, I am.

What’s the long-term plan for your company? Do you embrace leadership easily? Are you ok with getting people to follow your endeavor? Good management doesn’t make a bad idea good. But bad management can turn a good idea bad. Investors want to know roles and responsibilities.

Your attitude is critical. Volatility can get people out of complacency, but employees want consistency—whether passing along good or bad news. Empathy and gratitude are also important attributes in an entrepreneur, no matter how large or small the organization.

There is no substitute for experience and good management. In 2000, (if you remember) there was an unprecedented tech meltdown. At the time, myself and another were 30 years older than the rest of the team in the startup. All of their ideas would have sunk the company. Because of our wisdom—the combination of knowledge and the ability to act on it—we were able to preserve the company.

What’s your exit? You don’t want to focus on that instead of your current business—that’s where your focus needs to be, but you need to know your end game, your direction, monetization.

Then there’s funding. Some people like fundraising and talking to investors, others don’t, but you’re probably going to have to do it. If you’re really successful at it, you could end up with too much money which can also be a challenge. A company I was advising had too much up front—they had big offices, travel budgets, free lunches, massages. They ran out of money because they didn’t spend it wisely. Then you need to think about when you should dilute? Angels are the first round—bootstrapping, friends and family. But they’ll get diluted pretty quickly. I always advocate for reserving 15% of stock for employees. All employees need to have skin in the game. And if you end up with 10-25%, you’re doing well. Know how investing works and all the stages before you get into it.

I also think an NDA is important these days – revealing private information puts you at risk without an NDA. Have a lawyer/ banker to help you in the process. It’s not reasonable for a VC to refuse an NDA. They’re hearing your idea, they should agree to not take your idea. I would suggest avoiding anyone who won’t sign an NDA.

Want more? There’s more wisdom and insights than I could summarize here! Watch the presentation, or listen to it on the podcast. (links above)

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