Sick Start-up Syndrome

While managing DSX Labs for the past year, I have come across a variety tech start-ups in South Florida, mainly because we were running tech start-up pitch events in Boca Raton at The Greenhouse.

They range from 1 guy with just an idea to 3 people with a full blown app or website. They can have 100 years of combined experience or none at all.  We had a few 15 to 17 year olds interested in starting their own tech company.  There have been 1 or 2 where the entrepreneurs were in their 70s

Out of the 100 start-ups we met with, there were common patterns you could immediately identify.  These patterns can be success related or potential failure related. I call them patterns because they appear over and over again.  This is a generalization. I am being specific about a start-up.  And you know that generalizations could be wrong.  So this is just opinion.

Here are my list of start-up syndromes you need to look out for.  It’s like looking at your body in the mirror.  Some symptoms are obvious, some are not.

No Strategic Advantage
I have run into this myself.  You get going in some specific tech start-up direction.  You have a product.  You have built out some serious code!  Yet, you or you and your partners can not come up with a strategic advantage vs. a competitor.  Face it, you are building a commodity product at this point!

How To Fix: If it is early on, you can pivot or change something slightly that makes you competitive.  But pivoting will take some serious pain and some capital.  It may not be possible. You have to have a compelling reason or value proposition for customers.  Find it immediately.  Sometimes it is right in front of you and you are ignoring it.

Tech Svengali Has Taken Over The Show
This I have seen many times.  The actual business owners have been mesmerized and persuaded by some tech guy to let him make all the decisions. Yet, either he or she is not really all that he says he is or really has no clue what the market wants.  The tech Svengali may actually have their best interest at heart for you. But they are not you!

How To Fix: Sadly enough, if this has gone on too far it could be the death of the start-up.  Start-up owners need to be in charge of their ventures and give it direction.  The solution is often to let him go and if it is too late, it could be time to shut down the operation.

Money Looking For A Place To Spend It!
Sometimes in some rare cases, there is a partner or a person with a boatload of personal wealth looking to hit the next one out of the park.  They are looking at Facebook and saying “hey I can do that!”  But they are forgetting one thing; they don’t know anything about tech, or their knowledge is cloudy because they themselves are not the demographic they are serving.  So they spend like crazy, hire tons of people and find themselves in a pickle.

How To Fix: My recommendation to these want to be billionaires is stop being the owner and start being the investor when you have the capital. There are a good 20 ventures in south Florida right now that could use $50k and have a great start-up that needs capital.  Instead of spending $300k on your “idea” (which is just an idea) become the investor and invest in 6 start-up ventures. At least then you will have 6 lottery tickets and not 1.

One Feature Does Not Make A Solution
I have had a bunch of start-ups come to me with a concept that is simply a smaller piece of a larger puzzle.  For instance, I have heard of a few improvements to dating businesses.  So the start-up concept is a small piece of what dating sites do, and can’t really be a product unto itself.  Or another good example is a site that just does nice 3D products for sale.

How To Fix: Typically I would recommend that the start-up goes back and rethinks the whole idea.  Just a small part of something bigger is not enough.  One way to fix this is to pivot into being a B2B software provider. So instead of selling 3D products yourself, your start-up provides the technology for other e-commerce companies. Different market, but then you can focus on a narrow feature you offer!

Nobody Is In Charge
A single person building a start-up without a partner or team is an issue. What is a bigger issue is a group of founders with nobody actually in charge.  When they ask you, the consultant, to be in charge and be the decision-maker, you know they have bigger issues than you can really deal with in one session.

How To Fix: One of the partners has to be the CEO.  There has to be an ultimate decision-maker.  If you can’t make that decision, then maybe the start-up should end now.

Can’t Describe What You Do
I have had this problem myself several times.  It is a common problem. Why does this happen?  My answer to why it happens to me is if you spend a year or longer on a start-up you start to lose you way (and you mind) and you end up changing the business around,  You get lost as to what you ultimate do. This is especially true if you are pivoting or evolving to something else. And we are always evolving. What is your service and can you describe it?  If not, you have to recognize the problem and fix it.

How To Fix: Best to meet to mentors and advisers and figure this out.  I had a great question asked of me recently about my start-up. That question was “What Was The Aha Moment?”  At that moment I went back in time and thought carefully about that moment. This is the moment when you first had the idea.  Sometimes that moment describes the problem you are solving and ultimately putting together a solution statement solves that problem.

That’s it for now.  I could add a hundred of these items to this blog, but I am publishing anyway.  Maybe there will be a part II.

Have a great day!

How To Run A Successful Tech Start-up/Networking Pitch Event

After 10 years of attending events by Gold Coast Venture Capital, the EDC, The Funding Post, MIT, eMerge Americas, SFIMA, SFTA, New Tech Community, Miami Innovation Fund and probably 5 or 6 other groups in South Florida, I decided we would run our own tech pitch event here at @dsxlabs in The Greenhouse in Boca Raton.   We ran the first event on Wednesday, October 15th. I heard it was a great success from the attendees.  We are running a follow up event on Wednesday, November 19th at 6pm at The Greenhouse.  To learn more click here.

Would I Pitch?

I am definitely not new at giving pitches to raise capital myself.  I have proven to be quite average.  But I keep on trying.  I have given about 4 pitches this year alone for my own start-up.  What I was trying to do with this event is to make sure the attendees get what they need from the event, the best I could help them.

More About Pitches

I am trying to classify these pitch events in his blog article. I attended 2 FundingPost.com events this year.  They are good at what they do and really serve the venture and angel community and not the entrepreneur community well.

Most of these funding events are centered around a successful entrepreneur, an Angel Investor speaking or a Venture Capitalist speaking or a panel or a combination of both.  And typically 75% of the event revolves around these speakers and panels.  These types of events are good.  I have been to quite a few and learned a bunch of stuff.   Some allow for pitches after the event, some don’t.  Some charge, some don’t. They are all different.

Problem for all the entrepreneurs with these typical events is they don’t really get the exposure they need and usually there is not enough time at the end for the entrepreneur to make the contacts with potential investors that is needed. What people don’t understand is trust is probably the number one issue when investors look at tech start=ups.  Will this tech start-up survive and can this guy, gal do the job?

What Is A Tech Start-up Pitch?

By pitch, I mean a person gets up and sells their concept to a crowd, which could have a bunch of investors, angels, etc.  So we have established pitching for seed capital, for instance, requires getting up and saying what you do, the market, how you are going to market, how much capital you need, etc.

What Is The Difference Between Pitch Types?

There are 3 types of pitches.

A Pitch Deck Pitch

There is the old standard Pitch Deck presentation.  It would typically be a 10-30 page powerpoint presentation.  There are a few alternatives out there like Prezi and Google Presentations.  At this time I would highly recommend against both those alternatives.  Prezi is a terrific app, but it is a bit of black hole in terms of your time and it can be distracting to viewers if not done well.  Google presentations may have gotten better but last time I tried it, it was just useless.  Plus you need a screen and hardware to run a pitch deck presentation.  This is an old school way of pitching now.

A 3 Minute Elevator Pitch.

In 3 minutes you need to cover 5 core areas for most investors to peak their interest.  They are what is it?  what’s your business model? what is your market size? how you get to market?  and what do you need and why are you pitching?  Not easy to cover in 180 seconds.  That is the pitch I prefer though for investors to get a sense of what you do and your capability to explain it.

A 1 Minute Pitch

I did one of these at a recent FundingPost.com event in Miami.  For about 50% of the people pitching it just turns into a disaster.  At the event I attended where I pitched 2 entrepreneurs never got past saying hello. They were totally not where they should have been at the 30 seconds/half time. It is virtually impossible to get  your points across in this manner, so I don’t recommend running a 1 minute pitch.  It is a waste of time.

My Philosophy

We are focused on running events which help entrepreneurs, by giving them time to pitch and giving them the time they need to network with potential investors, advisors, co-founders, tech partners, business partners and other resources.  So, we spend a little bit of time on letting companies pitch, have no or little speaking (that’s what other events do) and we let people mingle using CEO Space techniques.

So, when are we doing the next one.

We just announced our 2nd tech start-up pitch event and networking on Wednesday, November 19th at The Greenhouse run by @DSXLabs and The BRIC (Boca Raton Innovation Center). I am starting to search for the 10 companies that will pitch.  At the first event about 1/3 got their pitch on track.  2/3 were lost.  A few did not use our format to answer those specific questions or got nervous.  It truly is nerve-racking to get up in front of an audience, especially your peers.  So I understand the nerves.  That is why I recommend to people pitching to have a piece of paper in front of them that keeps them on track if they lose their mind when they talk in public, like me!

If you are interested in attending or pitching at our next event then keep an eye on both our EventBrite and Meetup Group.  The best thing for you to do is join our Meetup Group, see below:

http://www.meetup.com/Boca-Raton-Tech-Start-ups-Meetup/

We also have a separate EventBrite listing:
https://www.eventbrite.com/e/dsx-labsthe-bric-tech-2nd-start-up-pitch-event-nov-19th-tickets-13965576415

 

Do Less, Do It Well, Get Paid

As we are homing in on the final features of Krowde, our new software platform, it occurred to me that doing one thing well as opposed to doing many things not so well makes more and more sense.  We need to do less!  We need to do that one thing we are doing quite well, and we need to prove our business model.  So this is the statement as to where we are at today.  It is not that clear still.

Krowde is a mobile platform for retail business to communicate with their customers.

Explaining Is The Challenge

That said, I have struggled with the most fundamental part of the start-up business process, which is explaining what we are building in one sentence.  That is a real problem.  It is enough of a problem that one of my mentors told me outright if you can’t explain what you got in one sentence then you probably have nothing and should consider quitting now!   While I do agree with him, I am also challenging myself to fix this problem.   And I know I can do it because I am a writer. I also ask mentors and friends to help me solve this problem. They just have to keep patient as I ask them to listen to me, while I ramble on about this stuff.

What Does This Have To Do With Do Less, Do It Well, Get Paid.

Well, what happens to guys like me is we get all excited by the technology.  We love this feature and that feature and this extension and that plugin thing.  Yes, there are a ton of cool things we could do with what we are doing!  Some of that is the endless possibilities of a web app.  But, the fact is that we need to reverse course, choose a micro niche market at first, reduce all our features to the bare minimum and then find out if customers are willing to pay for it.

How Does This Impact What We Do

So as we hammer down to the basic MVP (Minimum Viable Product), we are shedding features that can wait.  We are skipping systems and solutions that are not necessary now.  We are focused on just about getting to market and not all the things we could be doing. So the sentence about what we do; it do needs to be succinct and clear!  That is a challenge when we love to think about the possibilities of the future.  But the future is a long way off.

Get Cold To Tech

I just have one thing I want right now and that is both a working version and 10 customers testing it out.  Thinking is ok, but it all goes on the like to have list.

 

Learning is Earning

A few years ago, and I would love to find this article again, on Yahoo Finance, there was an article about why you should just forget about getting an MBA. Just start an Internet start-up and skip business school! That is what the writer prescribed. Not sure if this was written to get the Yahoo Finance readers up in arms or to make a point. It did get lots of responses, good and bad. And in some ways I totally agree with the writer. In some ways I did not. I had my own answer to this, but my situation was very different than the audience the writer was writing for. Seemed like she was writing for a group of 20 something technology hacking recent grads.

Your GMAT Score Is Inversely Related To Your Ability To Run Your Own Business

Your GMAT score is inversely related to your ability to run your own business. I stole this line from a book I read years ago on how to survive the Harvard business school. Yes, it is true that MBA programs train people to work at companies and deal with big company issues. It is also true the degree is a generalist degree in many ways, kind of like an engineering degree. What you learn in school is not what you are going to be doing in real life. And it may actually be true that those who go to get their MBA are often not able to start and run their own business, but when I ask entrepreneurs if they could have an MBA right now to assist them in their business and their answer is always yes. It is always better to have more education. I would get a PHD, if I had unlimited money, time and resources.

More Learning Means More Money

If you do some research, like here, you will find that the more education you get, the more you earn in general. Obviously we would all love to start a company and make money on our own working for ourselves, but the statistics say that overall getting more education means more money. It is a simple principle. Also, not everybody can go off and start an Internet company. There are as many failures in online business as there are offline. It is easier and faster to start a business online and thousands of new websites every year prove it. You can’t knock people from trying, but don’t argue this start-up method is an alternative to an MBA. You can have an MBA and be in a start-up, in fact that combination is more powerful than a start-up founder without an MBA.

I Went To Learn

My MBA education was not about the degree. Well, it became about finishing the degree in the last year, but overall, it was done over time, at 2 programs and I literally took my time and made often my class work about my day job. This was not about the degree in my mind, it was about my mind. I think it is important to learn and not just be handed a piece of paper. One of the issues that speaks broadly about this, is the lack of ethics among MBA grads. Well, if they are not about learning, and just about the degree, what do you expect them to be like. There are many with no scruples, no ethics and why do we often hear about guys like Madoff attempting to run a scam.

Education Realization

I recently had a epiphany not about my own MBA, but about certain pillars of my own learning in the past 10 years, especially about the web. What I realized is that there are probably a dozen foundational areas of being an expert on websites, such as web design, web programming, web analytics, business development, product management, email marketing, search engine marketing and organic SEO. What I realized is that you can be an expert in one of these areas. Once you become an expert, you will find that your desire to learn more in that specific field may top out, especially after many years in the field.

This just means you need to get knowledge in the other areas, if you work in the web. Our brains can handle the same thing day in, day out for just so long. And learning something new does not mean giving up what you know, it means building on what you know by learning a new area, especially if it is related. Maybe I am nothing like the rest of the web workers out there, especially if their answer is I am happy knowing my little silo of information and that’s that. This is a rare person, and in fact, this kind of person is the perfect company person.

Ford’s Assembly Line

If you look at the original concept of Ford’s Assembly Line and why it was so ground breaking, its because of specialization. Each person in the factory would specialize in one small area of the making of the car and just do their job. I probably would have quit that job at some point, or maybe I would have moved around the plant and worked on the fenders for a while. I need to get around and learn more about different areas after I master an area of business. I had for the longest time been considered a web analytics expert. This expertise, which is somewhat uncommon in the market, is in my opinion, not an end unto itself, but one of many disciplines needed to truly understand the web. It is foundational.

The Designer Becomes The Programmer And Vice Versa

I have actually seen web designers start out writing a few PHP programs here and there and turn into a full time programmer. I have seen designers become directors and engineers become writers. We seem to migrate towards not what we know, but what we are good at. In fact, maybe initially we did not even know we were good at these things, but when we found out, by chance, that we were good at it, be decided to like it. I stole that idea from the New York Times article on why Chinese Mothers are superior (They make their kinds learn something. They say be good at something, and then one day you will learn to like it!).

Web Education

Let’s face it, you can get an education on any subject in like 15 minutes today. I use Youtube.com when I cook and watch videos on how to make Indian food. I use Instructables.com to figure out how to do this or that. I research facts that make me as knowledgeable as any doctor, on certain matters, in a matter of minutes. I even found out at a retail outlet going out of business recently, the approximate value of a painting on the wall, before it was sold to me. We are empowered with the ability to discover and learn at a moment’s notice. Think about the impact of this on future generations who will have an answer to any question imaginable in a second. Still the web doesn’t give us the core part of an education that we get in the classroom, and that is working in teams, directly with an instructor that can’t exactly be mimicked online. The day is coming with Skype, Wifi and iPads where this will not be true anymore…

The Startup Chasm

Currently I am in the middle of my own start-up, called “Take It National“. And apart from my own business, I am quite often chatting with others about their start-ups, or just having conversations with people about start-ups in general. Now that I am in the middle of my own, and not just an outsider looking in, I am experiencing some new feelings and empathy for those taking this journey, that I would have not really taken too seriously. So these are just some of my recent thoughts about start-ups and small to medium sized Internet companies, good and bad, for those who are already in the know or just want to have something to think about. (I know when you work for a large corporation, often the lament is to think you should run your own business and do your own thing. Acting on going on your own is only for the strong-hearted, seriously!) So these paragraphs below use big company life vs. small company life and some of the start-up ups and downs as discussion points.

Freedom Pays Less But You Are Happier

Well, lets start out by saying quite often freedom means no pay (at first). I am noticing that while I am, of course, feeling the stress of getting my business off the ground, I am generally less stressed than at a big corporate job. Who knows why, but I am much happier in my own business. I would often get all stressed out and unhappy about having to be at a meeting at 10:00 AM (a time most software developers abhor), to discuss very little with people you really don’t want to be in the room with. In fact the lack of getting anything done was downright pissing me off in my corporate life. It is a fact of life in corporate life. Accomplishing something everyday is a happier way to go for me. I will of course have to get back to big company life one day where we hang around the coffee room, but for now I have to get things done!

Freedom Is Not Really Freedom

Just a reminder point that freedom is not really freedom. This counter point is just the reaffirmation that we all have to report to someone and a start-up person has to face the music, every day.

Indeed…Indeed

A small tinge of self-doubt is apparently always there in being an entrepreneur who was an ex-corporate person. I was telling somebody recently that my hands start typing Indeed.com, when I start to feel the burn of not having revenue flowing in my business yet… You can liken this to the experience of giving a major speech to a very large audience. Everybody feels the nerves of a speech and everybody feels the pull of going back to a soft cushy company job. But like a speech, you have to just make sure the audience doesn’t really know you are nervous, and like in “You Got To Be Believed To Be Heard” by Bart, you just have to make sure the audience does not know you are nervous. Believability is everything. You have to convince your mind you are on the right path, and quite often you are.

People Suck

Another reality check with start-ups is people. These people, who, if they took the time to read this blog post, are the people you do work with on a regular basis. In a start-up you are constrained for time and money, and often because you don’t have the big money, you have to take what you can get in certain areas, and often these people lack the training that people have at big companies. Not that they all suck, but you have to just accept the fact that they are not going to be perfect. I am talking your partners, your employees, your customers, everybody sucks. Sorry, but get over it and just let them do what they got to do (Even though you feel like doing it yourself…)

You Thought You Knew Something But You Didn’t

I love this article that came out in the late 90s about a Stanford class of young ladies who made thousands picking stocks… Gailbraith was asked about this group and he basically said they were lucky. Those successful the first time and even sometimes both the first and second time often are unlucky the third time. Luck still has something to do with success and nobody has a perfect record in the end (I know a few, and they were extremely lucky). Have the attitude that you don’t know everything and do not get emotionally attached to your ideas! Have the attitude that you can flex to survive or pull the plug and take a parachute out. Don’t go down with the ship! If you see the hurricane ahead get out of the way. You know what happened to the WindJammer Cruise Ship that defied common knowledge and attempted to sail through a hurricane from the Yucatan to Miami years ago. The boat is gone without a trace along with the crew…

Mimicking Has Its Limits

There is this mimicking business theory I am understanding and adhering to more and more, especially after being introduced to the concept of your story by David Tyreman and World Famous “Branding Experts”. You got to be yourself. You have to develop your own brand and niche. Every time some company makes it big, either Yahoo, Google, Twitter, Meetup, Facebook, Digg, etc, you see a sea of mimicking companies. What else are thousands of programmers to do, but make a Twitter Copy… What they did not understand is copy-cats have their limitations. If you are going to be the next Twitter, just quit now! You have to be your own company and your own thing. Being the same as others is not a winning strategy, with a few minor exceptions. Those exceptions have to do with commodity markets, like 4 gas stations on a corner, where nobody can identify the brand… Other than that, your web start-up needs to be unique and have its own story, or it will fail. It may just fail as well if you are a niche and have your own story, so this can’t be guaranteed, but it is a start towards success. Be yourself.

It’s The Asset Value, Stupid!

Online start-ups need to be accessed and valued for their asset value and not revenue. This doesn’t mean I believe in advertising models… I do however believe in the following as assets:

Monthly Unique Visitors
Number of Valid Email Addresses
Number of Online Members
Software Code
Patents, Trademarks, etc.
Resources Such As People (Networks, Contacts)
Building And Physical Stuff
Revenue & Net Income (of course)

In an online start-up it may never be about revenue or net income if your membership is enormous. The valuation is all about critical mass. It is counter-intuitive to old time accounting, but this is where the value is, at least in selling your business off.

Good Luck!

New Rules For Start-ups For Regular People

For many years I have always met with entrepreneurs to go through their plans for their tech start-up. Not that I am any bit an expert. With mostly 18 years of corporate experience, this really puts me in the corporate camp. Then there are the failed start-ups and the eventually the successful ones. This means that I have learned something over the years, which I am converting to rules. Whether I follow these rules is another story. Since we all learn the hard way over and over… So below are my “Rules For Start-ups For Regular People”. This is really a list of rules for those of you working full time who want to be in a start-up. Not that this is for the corporate workers, but it is the first step for you, if you are working full time and want to begin the path towards owning your own business.

This is not a comprehensive list, nor will you have to get your pen out. These are just the rules that I have noticed.

Now, first off, I am not the start-up guy from the ground up historically, meaning, I have worked in the corporate environment, worked the day and night job, sold off a start-up and/or some software over the years, gotten an MBA as well, and still go back to start-ups for more pain (or gain). This is a work in progress, so I am going to add to this blog entry as I see fit. It is just an opinion, and I probably will borrow a few points (especially from Guy Kawasaki), so sorry about some of the plagiarism.

Rule 1
Less Can Be More, And More Can Be Less

One of my old MBA professors used to have a quiz about entrepreneurs. It was a multiple choice question. Is the Entrepreneur’s motivation best described by 1. Wanting To Be Rich, 2. Independent of Others 3. Brilliant And Be Recognized or 4. Lazy. Now take a moment to think about this question, because I have yet to have a person answer this correctly, especially if they have not been in the trenches of a start-up. This first off, is a subjective question, and I got it wrong. My old MBA professor surprised us by saying lazy. Why lazy? Because the first thing an Entrepreneur needs in his arsenal to be successful, is the desire to get others to do the things that he can’t, leveraging the world of skills around them, so they can lay back and think at a higher level or go golfing. Every Entrepreneur dreams of the day they will be on their boat or taking time off, because the trenches may be fun in the beginning, but eventually it wears away at you, especially if you don’t have the freedoms of 9-5 guys. Hence, why I spent many years in corporate America. Quite frankly its easier.

The whole concept of doing more with less is what you have to get used to as an Entrepreneur, as you have to figure out a maze of choices and decisions.

Rule 2
Value Your Time

A few years ago, I was considering start-ups as I drove to work in New Jersey. It never happened there. Why? Because back then I did not value my time. And in New Jersey, there is little time for a start-up if you want to survive financially. You need to put a price on your time, where ever you use it. You don’t need to think about it all the time, but you have to have a price per hour. Whether it is $25, $50, $100, or $500 an hour, it is worth something. So, when you take a full-time job with a 60 mile commute each way, you have to add up the hours. If it takes 3 hours to commute each day, and you are worth $150 an hour (consulting), you have just blown $450 every day of time you could be using for a start-up, walking the dog, playing with your kids, etc. Take that money back and give yourself a chance by taking a job with less pay that is closer to home. Also, I know a certain entrepreneur that goes to work 20 hours a day on his new venture, bulldozing his way towards success. Trust me, this technique may sound smart, but smart is sitting back and making sure you are putting your time towards the tasks that are at your value level, and moving all the tasks smartly to others…

Rule 3
Separate From Your Emotional Brain

This one took me a long time to communicate, but a long time to have the guts to discuss this with people. It is bottom line thinking. I am not traditionally a bottom line guy, but you have to get to it quickly in your start-up, otherwise you will find yourself on the wrong path. You have to separate your emotional involvement with the product or service. This is not easy to do. Entrepreneurs are passionate, but that does not mean the business model will work. I have seen about 50% of start-ups fail simply because they have not thought out the business model, which could mean they are in love with their idea. You know what it is like when you are in love, you just can’t get it out of your mind. The idea bugs you night and day. But trust me, a little voice of reason should be applied. Now I have failed, trust me miserably, in getting others to separate from their emotional brain and look at things objectively. For instance, you go into a business because you think, without any serious research or confirmation by others, that the business will make money. Or you go into a business helping people, and somehow you will make money. For some reason I have seen this repeating pattern over the years and could not steer these people clear of this pitfall. I will give you a clue. If you are creating a non-profit related business, it is unlikely you will find a profitable model, and therefor your chances of financial success are diminished. Financial success is still the most important end result. Trust me on that.

Rule 4
Find Ideas In Everyday Things

You think a great idea has to be sophisticated. Not really. The only time I needed to find a sophisticated concept, is when I wanted to win a business plan contest, but that was not about reality… You just need to look around and find something that solves a problem. It could be a simple product or a simple service. I am a web developer, so the web is big time for me. Online you have no limits, complete unlimited freedom to solve some small problem with a small idea and put it into action. And most of these successful start-ups solved the most mundane thing, not the most complicated. Like for instance I remember a start-up Yoga accessories website, I wondered if they were onto something, and they were. And I also visited a guy in south florida who was running an iPod accessories business out of his garage in the early days of the iPod around 2000, and he has been successful ever since. I believe his company is called ExtremeMac. Just look around and find the simple things to solve, not reinvent the world or have it so complicated the customers can’t understand what you do.

Rule 5
Discover Hidden Trends, Not Ones On The Front Page

I am always looking for a trend, and when I see a new one, that has not been discovered yet (by the masses of asses), I know that is something important. For instance, recently I have seen a possible new trend of online services that serve us in a way we have not yet been served before, way beyond personalization. I call it Super-Customization. It is the concept of applying a concierge service to anything online and going way beyond the competitors to serve a niche of customers who want to either pay more or experience things at a higher level. Now what is the problem with trends on the front page of the New York Times… The problem is that this is typically when the trend is oversold. I have seen it happen with a dozen trends from creating a search engine, Websites in a box, Online Dating Sites, Speed Dating, Ebay mania, Social Networking Sites, personalization, RSS, iPhone development and others. If you are jumping on the train speeding by with a trend already in motion, you probably will end up on the tracks with the train speeding by crushing you to death. You need to find a niche, you believe will survive or prosper and keep your head down and not get caught up in the lack of reality train.

Rule 6
Use Technology Effectively

A lot of people jump into an online venture and find out after spending a lot of time, money and energy that they are not using technology the way it should be used. The opportunities to use the internet for video phone (Skype), for project management, for sophisticated email services and a host of other technologies are what will make or break your business these days. Effective use of Search Engine Optimization and having a website that gets found is a good example. This is a bit tricky, because if you are a novice, it is possible that you will flounder here. Find a local expert who can give you assistance in this area.

Rule 7
Family And Friends Does Not Mean Family And Friends

I picked this one up recently from Jack Karabees. Basically don’t expect your family and friends to be your investors. When they say family and friends they are not talking literally. These family and friends should be more of acquaintances, or you will find yourself in hot water with your mother, brother, friend.

Rule 8
More Education Is Always More Important

On Yahoo business a few years ago a woman wrote an article about why you don’t need an MBA. On the most part, she was right. I have one and it is no panacea for the business world, especially when starting up a business. But I found her article completely misguided. You don’t need an MBA, but trust me on this, every start-up person would love to have one. More education is always more important. I wish I had a PHD. The more info in your brain, the more you have to draw from in starting a business. Now there is a down side, in that the typically over educated person may apply things to business that are not practical. This comes from their institutional experience, not from the degree. You can always use more education and do not toss this aside lightly. More education is always better. Don’t toss it aside unless you are in the middle of a start-up. Got time off between start-ups. Go back and get a degree… Even after finishing my MBA, I went on to get a certificate from the CED, the Center for Entrepreneurial Development about tech start-ups. It was worth it!

Rule 9
Learn Timeless Things, Not Trendy Stuff

This is a bit of a non-sequiter, but this is important to understand as you grow as an entrepreneur. There are certain things in life that are useful over and over again, and then there are things that are gone in a blink of eye. As we learn things, try to find the things that are consistently the same over time or over time periods. For instance, Excel has been the same for 20 years for me, as has Linux. If I had learned Lotus and early Windows versions only, or just DOS, I would have lost my knowledge. Learning a P&L, Cashflow and Balance Sheet is timeless… Learn the things that you can use again and again and discard things that are just for the moment… Sometimes we have to learn technology that is fleeting, but find the consistent stuff and you will succeed more often.

Rule 10
Know When To Get Out

I would have never believed the story of the Genie and 3 Wishes would be a general truth, like a Twilight Zone Episode, where the guy wishes for something and gets what they deserve in the end. And once again this is something I have seen and will continue to see over and over. You just have to go through this one time in your life to learn this lesson, hopefully. I have seen it a dozen times over the years. A person builds up a modest business and has an opportunity to exit, relatively early, but does not take it, because they believe they can and will do better. It is a gamble like everything in life. A good example is of a this, is a small ISP I was writing business plans for in 1999. The owner came to me and told me a man showed up with an open offer to buy the company. An open offer means that they wanted you to put a price on a contract and sign it… Crazy now that I think about it. But things were crazy in 1999 with the Internet. This was a million dollar a year revenue business, an ISP, and the owner felt it was too early to exit. I wish I knew then what I know now. The trust about life, is things will and do change, like, the economy, our health, 911, wars, volcanoes, meteors, presidents, who knows. Life just throws a curve ball at us when we least expect it. So, when we got a chance to sell my first start-up in 2004 for a little less, we took the money and were happy for it. Every time I hear an entrepreneur tell me that they are going to hold out, I cringe. If you are successful enough to get an offer, 90% of the time, the first offer is the best…