Advising Entrepreneurs

I spend a fair amount of time advising entrepreneurs, both informally when solicited and formally when I have been retained–and sometimes even when I have not been asked for advice.  Here are some key principles I follow.

Advising Entrepreneurs

“What is the quality of your intent? Certain people have a way of saying things that shake us to the core. Even when the words do not seem harsh or offensive, the impact is shattering. What we could be experiencing is the intent behind the words.”
Thurgood Marshall

Probably the hardest aspect of what we do is to give useful advice that changes an entrepreneur’s plans and actual behavior. I like this quote from Marshall because it reminds me that I am effective when I am the least emotional but genuinely trying to suggest an alternate perspective on a challenge (or an opportunity) a startup team is facing.

It’s taken me a long time to learn that:

• Questions are more effective than declarations,
• A spreadsheet based on numbers and relationships supplied by the team allows them to investigate a range of possibilities more effectively than me enumerating them,
• Until I can understand what the team views as failure it’s difficult to plan for success.

Key Principles I Follow

Here are a couple of key principles that we follow in our practice, our focus is on early stage bootstrapping so they are primarily focused on short term revenue generation.

1. Sell what you have. Initially this may be by offering consulting based on your technology.
2. Cut the time to benefit of your offering. Focus less on increasing the amount of benefit and more on being able to deliver some benefit rapidly. Less than five days is good, less than two hours is better.
3. Cut the time to revenue.  Sell the simplest product that provides value as a part of a phased engagement model.
4. Focus on providing value. Clearly define your criteria for what constitutes a prospect that you can help and crisp diagnostic questions that allow for a quick determination of whether you can help.
5. Define your “stopping rule” in advance.  Define what constitutes failure, acceptable success, and unexpected success. Take a scientific or experimental approach to new initiatives by formally stating your hypothesis, expected range of outcomes, and a budget in people time, calendar time, and dollars.

“Harsh counsels have no effect; they are like hammers which are always repulsed by the anvil.”
Claude Adrien Helvetius

 

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• The Challenge of Advising Entrepreneurs
• Seeing the Elephant: The Entrepreneur’s Challenge in Integrating Advice
• Overnight Success
• We Don’t Encourage Individuals to Form a Startup
• Seth Godin’s Book “The Dip” Save Your Money