Humility is the Key

I recently attended a ceremony honoring innovators in my state, and the two top winners gave short speeches. One thing that struck me in both speeches was their humility. Both winners spoke about the legions of people who make their success possible, and how they really had little to do with it! It was all about the others.

That got me thinking about the role of humility in a successful startup. Another entrepreneur I know thinks she knows everything -- you can't make a suggestion, offer her an idea, or posit another possibility. She will tell you why you are wrong and she is right. Yet she hasn't raised a single dime of investment funding. Could there be a connection?

Everyone who invests in my business is going to believe they know something I don't--they not only want to help me succeed, they are going to expect it. And so do I! Everyone I talk to knows something I don't. Why wouldn't I want to learn from them? Why wouldn't I want to hear their ideas and opinions? I gladly accept advice from anyone who wants to give it. I am thankful that people care enough about me to offer their advice and give me their time. I'm sure they have other things to do, but they've chosen to spend this part of their day with me, and I'm going to listen to what they have to say. And be grateful so many people want to see me succeed. Whether I take their advice or not, I am humbled that they are willing to share it with me.

Don't Spend Money on Stuff that Doesn't Matter

Sometimes I see entrepreneurs spending scarce dollars on things that don't really matter to their particular business, and I wonder what they're thinking. For example, I've seen them spending lots of money designing and printing lavish business cards, and these are people who are NOT in the graphic design business. My cards were designed for free by a student at a local university, and copied at a copy center (not printed) for $65 for 200 of them. They look perfectly presentable for someone in the medical device industry.

Now I'm not saying I haven't spent some dollars in the wrong places, but this expense seems absurd to me. Any knowledgeable person I'm dealing with knows that my money is going into R&D, not business cards. One of my investors once complemented me when he noticed that the spreadsheet I was showing him had unrelated printing on the back (I recycled.) If I had whipped out a custom-designed card with an unusual shape and printing on both sides, I don't think it would have said "she'll spend my money wisely."

I write every check for every invoice, and probably will for a long time. It helps me to think long and hard about each and every expense. Think about the business you're in, and what you need to do to make an impression. If it's not in business cards, don't spend your money there.

Learning to Enjoy without Spending Money

There's no question that my social life has been curtailed as a result of my foray into entrepreneurship. I simply can't afford to do as much as I used to. But in some ways it has allowed me to meet new people, renew some old friendships, and improve some current ones.

When you can't take your family out for a nice dinner, sometimes it's just as fun to invite some friends over to the house. Maybe not for a big dinner, but coffee and dessert. I have found myself spending more evenings like this, just chatting with friends and neighbors, going for walks in the neighborhood, and in general hanging out with people without the added benefit of paid entertainment. I have enjoyed this, probably more than I expected.

Last weekend I went to a CD release party with a friend. There was no cover charge, and the band was so grateful for the large turnout they gave us a free CD. Check out the Jay Hoad Band and give a listen. Jay's from Australia but the music has a global sound. The point is I am probably open to more adventures now that I am watching my dollars than I was before, freely spending on concerts and plays that offered no personal interaction, only entertainment. Now my family and friends are my entertainment and it is very rewarding. Another side benefit of entrepreneurship!

Knowing When to Let Go

I think I ought to write about some mistakes I've made in addition to the ones I've observed. One of mine was not letting go soon enough of someone who wasn't working out. Of course, we all have stories about hiring/firing/not firing the right people, but this was someone who was eager, smart, hard-working, and producing results. The problem is, the job changed.

It went from a macro job (doing market research) to a detailed job (putting all that research into an action plan). It took me a long time to admit this person didn't have the right skills to get the results I needed. I tried to lead, but she did not follow. I was encouraged by her own enthusiasm for the project, but ultimately I had to admit I was not getting exactly what I needed and I had to look for someone else.

It's hard to let go of people with energy, enthusiasm, and commitment, but ultimately it's about the results. I have not replaced her, but I'm no longer fretting about the checks I was writing to her, either. It was the right move.

Get a Hobby, Too

After a few months of entrepreneuring, I started to get the feeling that my friends were getting bored with hearing about my business--and nothing but my business. I realized that I had put all my energy and focus into one thing, and I was becoming a dull boy..(all work and no play).

I did a few things to change that. I started a monthly Giving Circle, which is a monthly dinner in which someone makes a presentation about their favorite charity, and all the participants write a small check to that charity. I also started writing a book, and eventually a blog. Then I started a vegetable garden, and learned to cook Indian food.

All these things gave me fresh ideas, interesting topics to share, and even some new friends. I was able to have a conversation without blathering on about my business. And these hobbies give me an occasional respite from the intense focus of starting a company.

Don't Write Important Emails When You're Down

I recently drafted an update to my investors right after I had gotten some bad news about my business. Fortunately, I sent the investor update to a friend to read before I sent it out, and he stopped me from sending it. It was a real downer, when in fact most things were going very well. I was shocked when I re-read it the next day, and grateful that I had an opportunity to rewrite it.

There are a lot of ups and down in business, and when you're writing anything important--communicating to your Board or your investors, sending a note to a client, even writing a grant application--a temporary feeling of pessimism can cloud your message. If you're feeling down, DON'T WRITE ANYTHING. If you're not sure, wait a few hours and then draft your communication. But most importantly, have someone else re-read any critical messages before you send them, and see if they respond how you want the recipient to respond. Most of the time, that important message can wait until the next day, when the sun has come out and you're feeling positive and energetic once again.

Joining Professional Organizations

The company I started was in a field that was unfamiliar to me (long story, I'll tell you later) but I immediately joined 2 or 3 professional organizations in my new field, initially for the networking opportunties. But what I soon discovered was a treasure trove of educational opportunties as well. I signed up for as many as I could, and learned a lot about navigating my new industry, medical devices.

But many of the educational seminars were very expensive, so in every case I did all I could to get a discounted fee. I always made a point of calling the main office of the seminar sponsor to explain that I was a pre-revenue start up company, and needed the training but couldn't afford it. Nearly every time, a discount was offered to me. In some cases I used existing memberships (even AAA for travel expenses) to get discounts. Sometimes I called up other groups that were supporting me, such as local entrepreneurship organizations, and asked them to pay for the seminar, or at least part of it.

On my website, I have placed the logos of all the organizations I belong to. I am an active member, and if I'm not learning anything or meeting helpful people, I don't renew my membership. Oh -- and I always ask for a "beginner's discount" when I join. Most organizations have a lower, unpublished fee for pre-revenue companies.

Life is Not a Soap Opera

A very smart entrepreneur I know said once that "life is not a soap opera." You know how, on Friday afternoon, a character on a soap opera will say "I'm going to do everything I can to make sure you never see Peter again!" This tactic ensures that you tune in on Monday. Well, though it may sometimes be tempting, I've learned NOT to reveal my strategy or my thinking to anyone, when it cannot possibly benefit me to do so.

Let me give you an example. During a meeting with some engineers to discuss a very expensive contract, they gave their presentation, I thanked them, but said nothing else. I planned to sign the contract, but I wanted to think about for a day or two. They phoned me two days later and offered to drop the price 10%, and I hadn't even asked!

Another time, I was having a dispute with two busines partners. They wanted to remove me from the partnership, but I knew they didn't have what it took to go forward without me. I said nothing. I did not respond, I did not communicate with them, I sat back and said nothing. After about two weeks, they both walked away, saying it was too hard, too much work, and they couldn't manage it. I ended up with the entire enterprise.

I have learned that saying nothing, not revealing my strategy or my way forward, can be very effective. You don't have to announce to the world what you plan to do. Knowing when to stay quiet is a very valuable business tool.

Take Advantage of Your Special Status

I woman I met inherited a spring and decided to start a bottled water company, selling bottled water to businesses in a large city. She couldn't compete on price, so she emphasized her water's great taste. She's not doing well...yet she is an African-American woman in an urban market that has substantial minority supplier goals for its government offices and local businesses. But she refuses to market her company as a minority-owned company! She wants people to buy it because it tastes good. Yet she could be helping dozens (hundreds?) of companies meet their minority supplier goals by becoming their exclusive bottled water supplier. Noble, perhaps, but wise?

I have always jumped on every potential advantage I might have. I am enrolled in an entrepreneurship program at a local university, so I am a student and I am entitled to a lot of student discount programs, such as half-price software. Most universities have libraries that are linked online to hundreds of other libraries, including the Library of Congress. I have obtained ALL of my market research reports from there--many of which would have cost thousands of dollars to purchase. My state and local government offer dozens of programs for women-owned companies, many of which I've used. My husband's company is in a designated "empowerment zone" which entitles him to tax advantages and all he has to do is fill out a form. I own a medical technology company, and my state offers loans for both technology companies and life science companies, and I've taken advantage of both programs.

Take a 360 degree view of your company and take advantage of all the services and programs that could help you. And keep an open mind about your true status! Building a business is hard work, and you could find the help you need by exploring these opportunties.

Get Your Financials in Shape

I suppose it seems obvious to say that every entrepreneur should have a top notch set of financials, but I'm surprised how many don't. Of course everyone puts some numbers down on a spreadsheet, but to really move your financials from good to great, you have to spend a lot of time on them, and sometimes a lot of money.

I am not a financial person, I am the strategist and the implementer. I couldn't create a set of financials from scratch, so I decided to do what I do best - write. I actually wrote out my financials in words, one expense on each line of a spreadsheet. Things like:
Rent - first 2 years, $500 per month in a business incubator; year 3, 14 employees, rent $3800 per month; year 4, 17 employees, rent $4300 per month; year 5, 21 employees, rent $5500 per month

and I wrote several pages out like that. Every expense I could anticipate, I wrote it out. It took a long time, several weeks. I had to research everything (I didn't make the numbers up) and I had to talk to people in my industry to get a sense of how much I could sell and how fast I would grow. Of course I did a ton of market research, and made estimates about my company's size and growth rate. I made a lot of phone calls, for example I called three web companies to get an estimate on how much it would cost to create my website, then I chose a median figure from those estimates. I researched salary figures for future employees, and product development costs for similar products in my field.

Then I gave the whole thing to an accountant, and paid her $150 per hour to create the financials. It took her about 4 hours, $600. It was a lot of money at the time, but I ended up with a professional looking, accurate set of financials that I was proud to show to any banker or investor. My financials have gotten a lot more detailed since then, but I am still using the originals she created. It was worth the time and the expense, and it impressed the people and the government agencies I was looking to for funding. And best of all, I could explain every single line item on there, because I had done all the original research and I knew where every figure came from.

Stop Making Your Bed

Shortly after I started my company, I realized that my life was getting very complicated. Not only was I struggling to juggle family, chores, errands, and finances, but each day was an intense intellectual challenge that left me exhausted at the end of the day. I had to figure out ways to make my life easier--or at least less complicated.

I started to let go of things that I could live without, or without doing. I didn't comprehend at first what was happening, but over time I noticed that as I dropped items off my "to do" list, my life was becoming slightly easier, less complex.

The first thing to go was my bed - I stopped making it. (Yes, my spouse could have picked up this chore, but my goal wasn't to make other people's lives more onerous, but to make mine easier.) I haven't made it several months, and it feels good. I do less laundry/ironing, and a lot less yardwork. Instead of planting flowers this spring, I divided some of last year's perennials and stuck in a few tomato plants. Very low maintenance, but still nice to look at. I mostly walk to work, so car maintenance has all but disappeared. My home is not perfectly neat, and the windows are a little dirty, but my life is easier, and I'm just a little bit less stressed. And right now, every item I can cross off my "to do" list is a blessing.

Be Patient (or, All Good Things Come to Those Who Wait)

This week my first major investment closed. I was able to deposit a 6-figure check into my business account. It felt good. Even the bank teller said "you've had a good day!"

But it took over 4 months to close the deal. It was painfully slow. At one point, we were so far apart on the terms I walked away. The investors urged me back to the table and made some compromises. Ultimately they moved very close to center, and it said a lot about their commitment and enthusiasm. But several times I thought it wasn't going to happen, and I had to muster every ounce of optimism I had to wait out these months and keep positive. I had a few other funding options, but not many. I needed this deal.

Through it all, I was nice, professional, respectful, and responsive. (At least on the outside. Inside I was fearful and grumpy.) I waited and I waited. I reduced my monthly burn while I was waiting, placing a few consultants on hiatus and eliminating every other possible expenditure. And it paid off. Some entrepreneurs might not have 4 months of patience inside them, but if you want something badly enough, you have to find it.

Stop Trying to Relax

People keep telling me to relax, take a vacation, stop thinking about the business for a little while. But you know what? I CAN'T stop thinking about it. I've read all about the importance of R & R, and how you can burn out and exhaust yourself if you work too hard, and then your decision-making skills suffer, etc. But my entire financial future -- and my family's -- is on the line with this venture, and I can't relax and stop thinking about it. Besides, I love what I'm doing. It's not painful to think about it constantly, it's pleasure (mostly.)

So I give myself small windows of relaxation. An hour here, an afternoon there. I spent a week at the beach this summer, but in order to actually enjoy myself, I had to work a few hours each day. So I got up, exercised, and got out my computer and my phone and worked till about noon each day. Then I put it away, and I was actually able to enjoy the rest of the day, content that I had done all that needed doing, and that any remaining items could wait 18 hours until I got my laptop out again the next morning.

On the weekends, I work a little each day. It is not a chore, but satisfying work that makes me feel ready to face anything on Monday morning. I also have fun, relax, and rest on the weekends, but I can't stop what I'm doing for long periods and call it relaxing. I HAVE to accomplish something every day, even if it's just writing an email to a business partner, or updating my website, or sorting through old emails and making a "to-do" list for the coming week. I have given up trying to relax, and accepted the fact that "relaxing" for me means accomplishing something related to my business, every day.

Surround Yourself with Supportive People

This may seem a little cold, but I actually "let go" of a few friends after I started my company. There's no question that my life changed. I threw myself into the most difficult intellectual and emotional challenge of my life, and I needed support. Many of my friends were supportive, some in a sort of curious way "You did WHAT? Why?" Some might have even been a bit jealous, knowing that I was pursuing my dream while they were pursuing a paycheck. But most are excited for me, and eagerly await updates from me.

But a few were not supportive. They couldn't have cared less what I was doing. Asked me no questions, showed no interest in discussing it. A few couldn't relate at all - they didn't know any entrepreneurs, didn't understand it. At one dinner with one of these friends, I was swept by a feeling of "WHY on earth am I sitting here with this person?" It made me realize that with the limited time I had, and the limited emotional capacity, I could no longer spend time with people who gave me nothing. Not support, nor interest, nor help. They merely took up my time.

So I stopped calling, stopped responding to emails, didn't send them a Christmas card. I needed to spend my limited free time with people who made me stronger. People who liked that I had decided to try something new. I am now surrounded by strength, which is the best thing any friend can give me.

Enter Business Plan Competitions Often

A good reason to keep my business plan current is so that I can use it to enter business plan competitions frequently and easily. Every few months, I google "business plan competition" and I see what's available. You'd be surprised how many competitions are out there, and how many you actually qualify for. If you're a student, there are (at least) dozens out there. In specific industries, such as green technologies or life sciences, there are many more. For most competitions, all I have to do to enter is email my business plan.

In the past year, I have won $15,000 in cash and $5,000 in marketing services from business plan competitions. All of them come with a substantial amount of PR as well, plus of course the connections you make by networking at the events. It's definitely been worthwhile for me to enter. And I didn't necessarily win them all -- I got $5,000 at one competition for coming in sixth! Even if you don't win any prizes, it's a chance to hone your pitch, practice your presentation, and get feedback on your business plan from professional investors and advisors. It's worth the time to look for competitions and enter the ones for which you're qualified.

Keep your Business Plan Current

One of the wisest things I've done (yet) as an entrepreneur is keep my business plan completely up-to-date. There is a sentence toward the front that says "This business plan was prepared for you on //today's date//" so that I always know when it was last updated. About once a month, I go through it and update it. The strategy, funding required, financials, etc. are always completely current.

Some people think you only need a business plan when you're raising money, but I have found it useful for dozens of purposes. When I am applying for a grant, it's easy to cut and paste from my business plan. If I see a business plan competition I want to enter, I just submit my (always current) plan. If there's someone I want to attract to the company as an Advisor or Board member, I send him my business plan. If I want to submit myself for an award, or if someone wants to submit me, all the information needed for that award application is in my business plan.

It only takes a few minutes to update it if I do it frequently enough. And when a potential investor DOES come along, it looks smart and professional to be able to shoot him your business plan immediately.

Meet with Everyone

One of the things I started doing early on was meeting with everyone who asked to meet with me, or who was referred to me by someone I trusted. At first I did it because I needed advice so desperately, but soon I realized that there were valuable contacts among all these lunches and coffee dates. (Side note: as a poor entrepreneur watching every penny, I didn't really mind if someone wanted to buy me breakfast or lunch.)

And I always make it rule to ask for something from everyone I met. I don't have much time for socializing, each meeting has to have a purpose. From most people I ask for a piece of advice, or the name and number of another contact they mentioned that might be worth pursuing. From some people I ask for reports, scientific articles, market data, etc. that I couldn't otherwise get without paying for it. From others I ask for information about competitors and their sales figures and product development efforts.

Still others turned out to be real gems. I had a few breakfast meetings with a PR specialist someone had introduced me to, and he took an interest in my business. By our third meeting, he offered to make a sizable investment in my company in the form of PR and marketing services. And since his firm specializes in my field, that investment has made a significant impact on my company. Two other people I was casually introduced to are now serving on my Board of Directors.

Sure, some meetings result in nothing, no new information or advice. But the majority have been valuable in some small way, and I highly recommend it as a strategy for gaining critical supporters, insightful advice, and valuable business intelligence.

Be Nice to EVERYONE

By far the rule (tactic?) that has yielded the best results for my business has been BE NICE. I can't tell you how many entrepreneurs I know blew leads, burned bridges, and generally screwed up opportunities because they weren't nice to people they met along the way. I knew from day 1 I was going to need a lot of help reaching my goals, so it was important to be nice to everyone I met because you never know when someone is going to play a critical role for you. And that role could be weeks, months, or in some cases YEARS away, but you couldn't have known it when you first shook hands.

Here's one example: an angel investment group expressed an interest in investing in my company nearly 8 months ago. But they wanted to see more "progress" before they were comfortable. So I kept up with bi-weekly status calls, multiple trips to another state for meetings, and completing tasks that were not really critical at this stage, but I did them because the investment group wanted to see them done. All the way, I was nice to every member of the group. I grew frustrated and annoyed at all the hoops I was jumping through, but I stayed nice. Last week, the group wrote me a two sentence email saying they weren't interested in investing. No explanation. All that work and I got a two sentence email. BUT...a few individual members of the group phoned me and said they wanted to invest in my company outside of the group. Why? Because I was nice, I did what they asked, I achieved the progress they wanted, and they grew to trust me. I built a bridge.

What this blog is about

I am not a genius, nor a shaman, nor a wildly successful entrepreneur. I am a person who decided to leave a plum job and start a company. That was about 2 1/2 years ago. I am now officially in start-up stage. Pre-revenue, product under development. With any luck, I will have my first product on the market before the end of this year.

In the last 2 1/2 years, I have learned a tremendous amount about starting a company. I have also learned a lot of things that the Average Entrepreneur ought to know. I happen to be surrounded by other entrepreneurs--my company is housed in a business incubator and I network with entrepreneurs--and I learn from them. What they do right and what they do wrong. I try to take the best of the best and apply it to what I do. I decided I was learning so many great things that I wanted to pass them on to other entrepreneurs.

This is by far the hardest thing I've ever tried to do, and at this point I don't know if I will succeed or fail. We'll find out soon. But if I can help others do their entrepreneurship thing better, faster, cheaper, more successfully, then I won't have failed completely. In this blog I will share the best lessons I have learned, and hopefully I will help you. Stay tuned...