February 28th, 2011 → 1:20 pm @ Norman
That was the question posed by Norman Evans after the final day of the Unlimited Investment Challenge.
Read the full article covered by BusinessDay.co.nz from this link.
February 26th, 2011 → 6:10 am @ Norman
Over the last 40 years the U.S. has evolved an entrepreneurial ecosystem with two of the most unlikely partners – venture capital investors and technology entrepreneurs. This alliance has led to an explosion of technology innovation, scalable startups and job creation.
Tied at the hip, VC’s and entrepreneurs take large risks together. VC’s invest in startups with minimal tangible assets and no certainty about the product’s viability, market size or customer adoption. Entrepreneurs face all that, and add one more risk to their list: the bad board member. (more…)
February 23rd, 2011 → 1:19 pm @ Norman
I am increasingly realising that teaching people how to be entrepreneurs and more importantly how to become successful as an entrepreneur is definitely learned and is not innate.
As I say many times in my book, there are some people who instinctively act in an entrepreneurial manner – but these are skills that can be acquired. You are not born an entrepreneur. (more…)
February 23rd, 2011 → 10:40 am @ Norman
I’ve just come across some interesting research on how entrepreneurs think. Leigh Buchanan (http://www.inc.com/magazine/20110201/how-great-entrepreneurs-think_Printer_Friendly.html) quotes some Carnegie Mellon research, saying:
“Sarasvathy concluded that master entrepreneurs rely on what she calls effectual reasoning. Brilliant improvisers, the entrepreneurs don’t start out with concrete goals. Instead, they constantly assess how to use their personal strengths and whatever resources they have at hand to develop goals on the fly, while creatively reacting to contingencies. By contrast, corporate executives—those in the study group were also enormously successful in their chosen field—use causal reasoning. They set a goal and diligently seek the best ways to achieve it.”
This research confirms what I call ‘Goal-seeking behavior’ in my book, and relates closely to what Steve Blank calls ‘Pivoting’.
Regardless of what it’s called, the behavior of entrepreneurs is fundamentally different to that of managers. (more…)
February 22nd, 2011 → 6:08 am @ Norman
Success consists of going from failure to failure without loss of enthusiasm.
Everyone knows what a startup is for – don’t they?
In this post we’re going to offer a new definition of why startups exist: a startup is an organization formed to search for a repeatable and scalable business model.
A Business Model
Ok, but what is a business model?
A business model describes how your company creates, delivers and captures value.
Or in English: A business model describes how your company makes money.
(Or depending on your metrics for success, get users, grow traffic, etc.)
Think of a business model as a drawing that shows all the flows between the different parts of your company. A business model diagram also shows how the product gets distributed to your customers and how money flows back into your company. And it shows your company’s cost structures, how each department interacts with the others and where your company fits with other companies or partners to implement your business.
While this is a mouthful, it’s a lot easier to draw. (more…)
February 21st, 2011 → 12:47 pm @ Norman
I’m returning from the conference of the Australian Association of Angel Investors. Their conferences are world-class, and Angel Investors can learn a lot by attending.
Among the other information presented was the average time to close a deal during 2010… 146 days.
Is it reasonable that deals take almost five months, on average, to close?
When I was an entrepreneur trying to raise money, I was always disappointed, and sometimes angry, at how long it took. Occasionally I’d be in a situation where an investor would hear the elevator pitch, get excited by the opportunity, and write a check immediately; but more often, I went through the long grind of presentations, due diligence, and terms negotiation.
Now I see things differently.
The Angel Investors aren’t looking for a one-night stand. They want a meaningful, long-term relationship with an entrepreneur they can respect and trust. So entrepreneurs who do get the quick cash may find they’ve been funded by passive investors who will bring little extra value. The investors who take the time to get to know the founder, and the business, are more likely to back up their cash commitment with advice, contacts, and perhaps Board work. Taking a long time to raise funds can be stressful for the entrepreneur, but it allows time to form high quality investor/entrepreneur relationships.
Of course, just as a quick deal may be a great deal, a slow deal may also be poor one. Some investors do waste a lot of time in their processes, encouraging entrepreneurs to present to them even when they have no intention to invest. Such people are, in my experience, the exception.
Most investors are as keen to get the deal done as are the entrepreneurs.
The difference is just that most investors have learnt to avoid one-night stands.
February 18th, 2011 → 1:05 pm @ Norman
I was a judge at the Unlimited Investment Challenge last year and supervised a format that many entrepreneurs are familiar with – a contest to pitch investors, Dragons Den-style to gain a let-up to accelerate their company.
In almost every case, they had “runs on the board” and had demonstrated a market for their products. While most of them were looking for further investment to grow their companies, they were also looking for experienced investors who would come aboard with good advice on how to grow.
“Too often Kiwi start-ups focus on their founder , or product and forget the importance of brand the ability to scale quickly – probably the thing which interests investors most.
After all, why would you put your money into a company with the growth trajectory of a woozy snail?
It’s easy to pick holes in most start-ups and their ambitions. But what I observed was a turning point in New Zealand entrepreneurs and their nascent businesses. Maybe we are beginning to see a tipping point in the kind of people involved in new enterprise.
What I liked is that we are starting to see genuine entrepreneurs coming though. Finally I get people talking brand at me and ultimately that’s all that matters. We saw a group of entrepreneurs pitching to us, not a succession of techos obsessed by their inventions.
February 16th, 2011 → 5:57 am @ Norman
Hard questions demand hard answers. Here’s my slide deck that I use teaching entrepreneurship to students.
February 14th, 2011 → 7:04 am @ Norman
Intolerant and insensitive?…. Could that be me?…. Apparently, yes! A friend was recently explaining to me how I’d offended several people, in separate incidents. She said, “The trouble is, with the language you use, it sounds like you’re saying your views are UP THERE and you’re looking down on other people’s views.” Bummer! She could be right! What I’d seen as ‘expressing strong opinions’ some saw as ‘strong personal attacks’. (more…)
February 14th, 2011 → 6:03 am @ Norman
It’s not the strongest of the species that survive, nor the most intelligent, but the one that is most responsive to change.
Companies have a fairly predictable life cycle. They start with an innovation, search for a repeatable business model, build the infrastructure for a company, then grow by efficiently executing the model.
Over time, innovations outside the company (demographic, cultural, new technologies, etc.) outpace an existing company’s business model. The company loses customers, then revenues and profits decline and it eventually gets acquired or goes out of business. (Looking at the Dow-Jones component companies over time is a graphic example of this.) (more…)