Everyone always asks me, “What’s the secret to building a business as a successful entrepreneur?” I often get questions about venture capital , hiring, bringing a product to market, and more. Everyone always thinks that it is some insane formula, that is a big secret. Psst… there is no holy grail or secret. It’s just really simple: Surround Yourself with Individuals That Get It. By Get it, I mean understanding the vision of the Web 2.0/ Internet Market, The Current Market You’re In, and most importantly your company’s vision. Within one meeting, you’ll tell if someone “gets it” or doesn’t “get it”.  This is something you learn naturally, not in a textbook. Here’s some signs to look for as to whether an individual “gets it”:

A Key Hire

You don’t need to educate them on anything. They’re up to date on the industry and what’s going on specifically in the case of their role. ie- If you’re a developer, you understand the Web 2.0 way of things. After a short description of your product and vision, they start chiming in, as if they’ve been with you all along. I will tell you, it is priceless.

A Co-Founder

Co-Founders have a special bond. They have the distinct ability to be in sync with each other. Both of you have the same vision, and working together allows it to become more powerful.  Frank and I have never once had an argument that ended in a childish manner or the two of us hating each other. Things might have gotten heated, but we looked at the facts, and decided what is best for the company. Don’t argue, solve.
An Investor

They believe in where you’re going. They don’t see innovation as scary or as a major risk, but the reason they want to invest. Scoble mentions VC’s laughing at Seagate’s original 5 mb hard drive as “too large and un-needed”. The VCs who eventually invested weren’t scared, but motivated by this innovation. They also believe in the founders and Mgmt team. One of the best pieces of advice I’ve ever received recently came from Dan Rua at Inflexion Venture Partners: There’s three things an investor looks at: Magic (the product), Markets (how big of a market, and Management (the people and their ability to make the vision come true). I think the third is by far the most important. It’s the jockey, not the horse. Of course you need the other two, but it comes down to Management. My brother asked me: Why Can’t Someone Just Copy What You’re Doing? I said, it’s simple: Our DNA is unique. Unless the competition hires us away, which would never happen, then it won’t be the same. The management of a company is the DNA of the company.

Biz Dev

They understand you’re company’s vision, and more importantly, how the synergies between their company and yours can improve both visions. They want to innovate. They want to give value, not just take value and run.  Giving is a beautiful thing.

Your Competition

Didn’t expect this one, did you? :-).  Healthy competiton is a must have as a startup. Competition forces innovation.  Your competitor needs to get it, and innovate as well.  This pushes a company so much further. Think about it… Would you really innovate as much, if you knew your competitor was a dinosaur that hasn’t been innovating and trying to one up you? (Holding my tongue back on a comment I could make here. If you’ve been talking with us, you’d know what I’d say)

I’ve been meaning to write this post for quite a while.  Whether someone gets it or not, is the simple litmus test I apply to any decisions I make as CEO.  If you get it, I want to work with you.

PS- I’m finally back to blogging. The past 10 days have been hectic.  A very large decision coming up for me in the next two weeks.  Its outcome can only further Publictivity.

[tags] web 2.0, enterprise 2.0, office 2.0, publictivity, getting it, blogging, robert scoble, seagate, venture capital,entrepreneurship,seagate, al shugart [/tags]

Guy Kawasaki had an amazing post today, honestly one of the best posts all year regarding Venture Capital. It was entitled The Venture Capital Aptitude Test. Basically, it is a test to see how suited you might be for Venture Capital. He also goes into the fact that a good venture capitalist isn’t built upon an MBA or financial formulas, but an understanding of how a company works. Lastly, Venture Capital should be for those at the END of their career, not in the beginning. I couldn’t agree more. I’ve probably mentioned this before, but my goal in life is to exit a couple of startups, take time off to teach or contribute to society in a nonprofit manner, and then spend time as a VC to help young companies and the entrepreneurs behind them. Part III was the most interesting part of the test/ the one that was open ended. Here are my answers to the ones, I feel I have an answer for.

How do I introduce a product with no budget? (add 2 points)

Many ways to do this. If you’re talking about getting it funded from the getgo, get customers early on as funding. Sell them the product at a highly discounted rate, and get what you need from it. If you’re talking launching, there’s tons of ways. The first is to go and pick a niche to focus on. Find a small and select group to start your product off with. Find a group that you can work with hands on to build your initial critical mass with. Don’t go for everyone because you can’t afford it, and you won’t do it… trust me. Another way is through Public Relations. you don’t need an expensive firm at first. Do it yourself. Get your hands dirty. Put together a compelling story, and promote the story. More importantly, focus this with the first step. Target publications and bloggers that are focused on your niche. It’s much easier for niche publications to “get it”. Lastly, make the technology work for you. In consumer cases, allow it to have viral triggers that allow the content to be spread. If it’s for the commercial or business side, make it dead easy to use, and a piece of software that will force your customer to talk about it in a way that says “You need to try this software”. Let your customers be your sales force.

How do I determine if there’s really market demand for my product? (add 1 point)

Well, I don’t know if this is a question that should be here. If a VC has an entrepreneur ask that, I think they’ve invested too early. When an entreprenuer starts, they need to do their own diligence. Talk to people within your market. See if this product really helps them or fits their needs. If it doesn’t, then find a way that it can. take every ounce of feedback you can get.

What do I do if customers hate our first product? (add 1 point)

In the step listed above, you’re usually going to talk to very small portion of customers. It may turn out that the rest of your market, sees it a different way. There’s a demand for your problem, but your solution needs to be made better. Stay focused, don’t change the problem you’re fixing. Change the solution you’ve built. Once again, take in feedback like a madman and apply it.
How do I get Walt Mossberg to return my call? (add 2 points)- Couldn’t tell you, sorry.

How do I get to the folks who run Demo? (add 1 point)

I’m lucky enough to know a couple of companies and CEOs that have presented at DEMO. If I didn’t, Id first try to network and find a way in. It’s a small world. If that doesn’t work, I’d then try to talk to Chris personally or someone on her team. If you can find a way to meet her in person, that helps so much better. Remember the focus of Demo, and that it is to show groundbreaking new technology. Highlight that, show her why it’s going to be demoworthy. Her job is to sell seats to that conference. Show her why your technology is going to be worth it to the people paying her big bucks. She will not put crap on stage. Show her why you’re better than the large percentage that gets rejected. There are also different “product categories” each year at demo. See if you fit into one perfectly.

How do I get a plug in TechCrunch? (add 1 point)

DO NOT, DO NOT, DO NOT, AND I REPEAT DO NOT PITCH MIKE LIKE A NORMAL REPORTER WITH BUZZ WORDS AND A PRESS RELEASE. Believe it or not, Mike is quite an accesible guy. He knows everyone, and there’s a good chance you can find a way to talk to him if you live out West. If not, try to catch his attention. Once you get your couple of minutes of Mike’s time, show him why you’re product rocks. Show why it is different, and how it can benefit his readers. It’s just like DEMO. Mike has pageviews to deliver, and a crappy product won’t deliver it. Also, if you can, give him the first scoop. He’s a fan of that, and honestly, it’s the best place to have the news break.

How do I get the folks at Fox Interactive to return my call? (add 1 point)- Couldn’t tell you specifically. Haven’t dealt with them. If it were Yahoo! or Google, I’d say network, network, network.

How do I dominate a segment when there are five other companies doing essentially the same thing? (add 2 points)

Start small, focus, and differentiate. Don’t go after the entire market. If you’re trying to compete against an 800 pound gorilla, don’t try to take out the entire gorilla. Go for his legs. Once you start small, focus on his legs and keep hammering away. If you take his legs out, he’ll fall. Lastly, differentiate. Don’t go after the gorilla with the same things he has. Guess what? He can hit you back with the same thing, and harder. Hit him in his legs from an angle he doesn’t understand. Provide something new and innovative, but for the same space.
How much time, energy, and money should I spend on patent protection? (add 1 point)

This could be an opinion question in some respects. I think it depends on the company. If you’re a biotech, well, then a lot. If you’re a consumer space product with social networking, don’t focus too hard or put too much money. Explore your options. Protect yourself, but don’t become a boy in a bubble.

We bet on the wrong architecture for our product, what do I do now? (add 2 points)- Not entirely too sure on this one.

What kind of people should I hire: young, old, unproven, proven, cheap, expensive, local, remote? (add 1 point)

So the first thing that matters is making sure someone gets it. Make sure they get your company, your mission, and passion. Set the older and proven individuals as guides and cleanup to the younger unproven guys. Make sure they keep them on track and away from mistakes. Let the younger and unproven guys more onto the creative side initially. Let them formulate the initial ideas, but let the older and proven guys make it perfect. Local or remote depends on the company. Weblogs Inc is mostly remote. A lot of development can be done remote, but make sure the developer is disciplined.

How do I get them to leave their current jobs without throwing a lot of money at them? (add 2 points)

You better be a damned good CEO. I’m talking top notch. You have to be able to sell the dream with your passion. Make these guys see what you see. Make them dream. Most importantly, they’re going to work for you. They’re going to work with you. Make them feel important and not just another number. Let them feel like there will be creative freedom and leadership available with them in the startup. Show them the potential of the company, and the rewards of taking a risk with a lower salary, but great options. This still scares a large amount of people after the first bubbles, but if you sell them the dream and show that the company has a plan, you can do it.

How do I tell my best friend that he can’t be chief technical officer just because he was a cofounder? (add 2 points)

A company isn’t about, you or him, it’s about the company. A cofounder should understand that decisions have to be made to better the company. Egos are checked at the door. Make your best friend understand, that he’s done an amazing job, and brought the company to where it was. Let him know, that someone else who is better equipped can take the company to the next level. Also let him know, that he will have tons of input, and still involved creatively. Don’t just cut him out.

How do I get to the buyer at BestBuy to return my call? (add 1 point)- Haven’t dealt with them personally.

How do I handle a customer who wants to send back his purchase for a full refund? (add 1 point)

Don’t pull a Vincent Ferrari. Find out the problem, and see if there is some insight you can provide, that they might not know. Also be willing to bend on pricing. a little bit of profit, is better than none. If worse comes to worse, let them go, and let it be easy. Your reputation is just as important. Their customer experience, even though they didn’t keep the product, will get around. Make sure it gets around in a great light.
How do I fire people? (add 2 points)

This part sucks, it sucks a lot. You need to not let it get personal. Take a step back, and understand this is the life and job you selected. Something happened, that has brought it to this point. Make sure you have exercised all other options before going here. Don’t fire someone off of emotion, and more importantly don’t keep someone off of emotion. If you do fire them, be straight forward, but also kind. Let them know the positives, but also let them clearly know why they were fired. Don’t let them go home without understanding the reasoning behind it. Also make sure any benefits, severance, or help possible can be offered. If you’re able to write a reference, note that you will.

How do I lay people off? (add 2 points)- I’ve had to fire people, close friends and cofounder, but never lay off. I have an idea, but not a correct answer.

So biff, taylor, tiffany, and sebastian, go become an entrepreneur. Forget most of the things you learned with your MBA or undergrad degree. If you need to calculate formulas, then it should be useful. Listen to your gut, not a textbook. Learn from your successes, but more importantly learn from your failures. You will fail. you will fail multiple times. It will be one of your greatest lessons. For no textbook or case study can ever teach you this. Go out, change the world, be an entrepreneur, and then maybe after that go become a VC. Just because you cranked out some numbers at JP Morgan over a summer internship, doesn’t qualify you as a venture guy or gal. Honestly, I think it hurts you. Hope this was helpful.

[tags] web 2.0, guy kawasaki, venture capital, venture capital aptitude test, publictivity, ceo, tech crunch, VC [/tags]

If we linked to you, don’t worry, this blog will be up this week. Just testing

[tags] web 2.0, public relations [/tags]