An Initiative of the City of Akron

Accelerate Akron

Welcome to Accelerate Akron, the blog of the Akron Global Business Accelerator. Here you will find expert advice from the Accelerator team and information on issues that matter to entrepreneurs, tech start-ups, and small business owners throughout Northeast Ohio and across the globe.

From Teacher to Tech Entrepreneur

The ABCs of becoming an entrepreneur

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New entreprenuer Victoria Adams starts a six-part series on how she went from teacher to entrepreneur and what she has learned from A to Z.

I love learning and, more importantly, helping others learn. This is why I became a special education teacher. However, as much as I love teaching, it was my hope to one day work for a company with an education-related focus. Never did I imagine that company would be mine. Yet, here I am – teacher turned entrepreneur.

Four months ago, while pursuing my MBA at Malone University in Canton, I developed the idea for a wearable educational device that will help students take ownership in learning by tracking and rewarding behavior and engagement in the classroom. My professors at Malone encouraged me to move forward with my idea by surrounding myself with knowledgeable partners. This led to me seeking legal expertise and joining the Akron Global Business Accelerator. At the Accelerator, I have received invaluable direction and insight into every aspect of creating a start-up. They encouraged and supported me in The National Science Foundation’s I-Corps Sites program at The University of Akron where I conducted extensive market and customer research to validate market need. Since then, The Bit Factory mentors have begun providing me with the technical expertise that I need to develop the idea into a quality product.  I am very lucky to be near Akron where there are such resources and opportunities available!

That said, the journey has not been easy and I have learned much in a short amount of time. As a teacher, I would love to share some of these lessons with you. Naturally, I have “alphabetized” those I feel have been most important in my journey so far with the intent to continue to share every few months here at the Accelerator blog. Starting with A-D, I hope you’ll join me – and possibly learn something that will help you, too.

A – Ambition

If you want to do well and be a successful entrepreneur, you have to be ambitious and willing to work hard. On your own, seek legal advice, explore joining an accelerator and find support groups that offer an opportunity to network. Don’t be afraid to ask questions when you are unsure of the process and your product’s potential. Make the calls, send the emails, go to the meetings and stay up late working on presentations – no one is going to do it for you.  Ambition with proven actions will bring positive results.

B – Businesses

Spend some time researching your competitors and their products. Get to know their products – how they function, as well as cost and quality. If possible, get the product in your own hands to evaluate and compare.  Knowing how your product relates to others helps determine whether changes need to be made to make yours viable.

C – Customers

To be a successful teacher, I need to know what drives my students’ decisions and actions.  Likewise, you need to know who your customers are and what compels them to buy. Through market research, you can learn the difference between your customers, influencers and decision makers as well as the marketing message for each. If you can, get in front of them, talk with them and get their feedback.  That will help you discover what they need and want in a product and then ask how yours aligns with it.

D – Design

There is no doubt you will need to make revisions to your initial product idea after consulting customers and researching competitors. I had to change aspects of mine based on feedback and it was hard, but it’s essential. And once you’ve got it where you want it, go back and get feedback again. Never reach a point where you know there is nothing that needs to be changed – there is always something that can be done to better meet someone’s need. Your product is not perfect, despite how you may feel about it.

Being an entrepreneur, you are continuously learning and improving. But that doesn’t mean you have to do it all by yourself.  I hope this blog series will help you prepare for the lessons you may encounter along your own journey to success!

It’s all in the “extras”

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Here at the Akron Global Business Accelerator, we provide solid programming with business development consultation and investment advice to some of the area’s most creative and intelligent entrepreneurs. However, I believe the key to a robust startup community is also providing the “extras” entrepreneurs need to thrive and grow their business. This includes collaboration spots, co-working areas, maker spaces, accelerators and coffee shops, to name a few.

Akron is well on its way in all of these areas. Here at the Accelerator, we are at critical mass with more than 300 employees, and 41 businesses in our Technology Accelerator Company (TCA) program. We’re concentrating talent and fortifying the entrepreneurial spirit in a number of our own ways.

Bits and Atoms Innovation Center

This has been a journey that started two years ago, but we are on track for an exceptional maker space and a progressive and collaborative co-working space in downtown Akron in 2017.

However, in the past two years, the landscape has changed.  The needs and the expectations for entrepreneurs and innovators have evolved; so we need to make sure our value proposition will still be compelling on the day we open. To do that, we, a City of Akron initiative, and our partners including The University of Akron, and Stark State College and a number of private companies, have expanded our advisory board to include additional members from a wide variety of industries and backgrounds. The potential from this group is tremendous, as we focus on customer discovery and membership structure. We want to give our users a voice in what the space is going to be and this is a great next step to providing community-accessible resources, collaboration opportunities and business consultation for talented individuals who aspire to create.

The Bit Factory

Things are looking good at The Bit Factory; we now have eight clients all with big upsides. To help meet the needs of Akron’s software startups, we’ve eliminated the six-month program limit. This ensures that our clients have a location and a team of mentors for as long as they need to reach a specified success point. If a business is moving forward, we will be there to assist. In addition, we have committed to invest $145K in our client companies so far this year.  As well, we are exploring offering The Bit Factory as co-working space to members of the outside community and have been host to a number of non-profit and civic engagement events, including arts events to bridge the gap between the startup and art communities. Last, we are excited to announce our first pitch competition to be held at The Bit Factory on Nov. 17. FUEL will showcase some of the best tech ideas from around the area, as teams compete for investment and to become a client of The Bit Factory – keep an eye out for more information to come.

Café at the Accelerator

Things are moving along and we are targeting opening our café and collaboration space by first quarter of 2017.  The café will be the perfect complement to our already extraordinary ecosystem that will foster spontaneous collaboration and talent discovery among our current client population and Canal Place neighbors.  I can also report that we are keeping our commitment to bringing in someone who is a true entrepreneur to operate the cafe, who will not only provide a much-needed service to employees of the Accelerator, but who will benefit from being in the Accelerator and being a part of our TCA program.

Plug-ins

Recently, we decided to host what we call “Plug-ins” here at the Accelerator. These are internal gatherings where people in the building can come together, find synergies and share knowledge. From founders’ breakfasts to building-wide lunches, we are encouraged by the collaboration and networking we see at each of these events.

It’s exciting to see how the landscape of Akron’s entrepreneurial community is constantly changing and we are adjusting and adapting right along with it. As you can see, there is much going on here and much more to come. Stay tuned!

Build a startup culture like your best friendships

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Culture is one of the most important aspects to creating a successful company. Brian Chesky, founder of Airbnb, said “A company’s culture is the foundation for future innovation. An entrepreneur’s job is to build the foundation.”

So what is culture? A Google search defines it as “the beliefs and behaviors that determine how a company's employees and management interact and handle outside business transactions.” That sounds absurd to me. I like to define culture as the founder’s vision personified.

Experienced entrepreneurs always explain that having a strong company culture can mean the difference between success and failure. Define it early, guide it, nurture it, and you will create a strong innovation environment for success; however, this may be easier said than done for fledging founders.

I recommend to our companies at The Bit Factory to build a culture that resembles close friends. Good friendships have similar key qualities: honesty, trust, transparency, and the ability to withstand and embrace constructive criticism. Like good friendships, good culture will help motivate, inspire, and drive the team to work harder and do the best they can. You will argue with employees, employees will argue with each other, but arguments promote growth and innovation – which ultimately require trust. Be clear about metrics, mission, and changes with the team – like your friends, you won’t get away with it. Finally, do not shy away from the bad, and be introspective in order to improve.

A good culture, as built by the founders of the company, aren’t words on paper. They aren’t plaques on a wall. They are actions and leadership. Guide the team, hire effectively, and treat your culture creation like your best friends.

Turning Life Advice into Entrepreneurial Advice

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I was recently working with one of our entrepreneurs who was struggling with moving past some harsh criticism.  As I was offering my best advice, I found myself quoting my favorite book – “The Last Lecture” by Randy Pausch. It isn’t a book about becoming an entrepreneur, per se, but it is about achieving your dreams and is filled with advice that can be applied to entrepreneurs and the struggles you face every day. (Side note: if you have never seen Randy’s lecture, heard of his story, or read his book – I encourage you to do so!)

Below are some of my favorite quotes from the book and how I believe they apply to entrepreneurs.

On hitting brick walls:

“The brick walls are there for a reason. The brick walls are not there to keep us out. The brick walls are there to give us a chance to show how badly we want something. Because the brick walls are there to stop the people who don’t want it badly enough. They’re there to stop the other people.”

How it applies:

I know it seems like you hit a lot of brick walls as an entrepreneur – disinterested investors, product development delays, team-building problems, funding shortfalls, etc. – but the brick walls are there to discourage other people from continuing, not you.  The brick walls are what separate you as a successful entrepreneur from those who fail. The brick walls show you how badly you want this. Attitude is everything, right? If you realize this is not the end, but, rather, a test of your drive, then you’re ahead of many others who have run into this same wall. My advice is to learn from each one and soak every bit of it in so that you know how to climb it next time. And if you don’t think you’re ready to climb it, start taking it apart brick by brick and you’ll be surprised how quickly it will come down.

On taking hard criticism:

“‘Coach Graham rode you pretty hard, didn’t he?’ he said. 

I could barely muster a ‘yeah.’ 

‘That’s a good thing,’ the assistant told me. ‘When you’re screwing up and nobody says anything to you anymore, it means they’ve given up on you.’

And that’s a lesson that stuck with me my whole life. When you see yourself doing something badly and nobody’s bothering to tell you anymore, that’s a very bad place to be. Your critics are the ones telling you they still love you and care.”

How it applies:

Entrepreneurs receive (what can feel like) a lot of criticism and harsh attacks – but most of these people are here to help you. Business advisors and entrepreneurs-in-residence are going to ask you really hard questions because it’s the best way they know to prepare you for being a success. They will continue to give you honest feedback because they care about your outcomes. If you stop getting honest feedback, that means people don’t believe in you or your product anymore.

On adapting: 

“You can always change your plan, but only if you have one.”

How it applies:

Ok, this one’s pretty self-explanatory in how it relates to entrepreneurs, but it’s worth repeating. You might know what your end goal is, but without a plan, you can’t possibly reach it – at least not in a timely manner, and we all know the importance of moving quickly in a startup. So you have to create this plan – actually put words on paper and map it out. You’ll realize that once you’ve taken the first step of actually starting your plan, that you’ll be able to continuously build on it.

That said, Randy’s advice isn’t just about having a plan; it also articulates the importance of being adaptable. If you have any experience in a startup, you know things pop up and unexpected delays happen. You have to be able to shift gears and find a different path to that end goal. You will be constantly updating your plan, but you will be much further behind if you don’t create that plan in the first place.

On making assumptions:

“Sometimes, all you have to do is ask. …Ask those questions. Just ask them. More often than you’d suspect, the answer you’ll get is, ‘Sure.’”

How it applies:

Assuming you already know the answer to a question (and may even be afraid of what you’ll hear) can prevent you from progressing.  As Randy mentions in his book, the worst answer you will get is “no.” This may oversimplify the complexity of asking for a favor or reaching out to someone for help, but, truly, the worst thing that can happen is being denied.  On the other side, the best thing that can happen is that people will say “yes.” Sometimes, just the possibility of getting a “yes” can make reaching out a no-brainer. It can take a little bit of courage in the beginning to ask for what you seek – a meeting with a notable investor, a phone call with a potential customer, a more flexible way to finance your product development – but the payoff far outweighs the anxiety. You never know unless you ask.

I like to look for pieces of entrepreneurial advice and inspiration in unexpected places. We all know the best startup books to read and blogs to follow, but sometimes it’s nice to find knowledge and advice buried in a good read that applies to other aspects of your life. This book is filled with solid nuggets of wisdom that may help you get past that brick wall you’re facing.

 

Simplifying your elevator pitch

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“If you can’t explain it simply, you do not understand it well enough.”

When you have 30 seconds to explain your business, you need to do it simply. I’ve heard many elevator pitches; the vast majority falls flat from a lack of passion or by drastically blowing past the 30-second mark with too much information. When I ask most young entrepreneurs I meet to explain their business in 30 seconds (which is essentially the elevator pitch), most can’t, either in 30 seconds of speech or written word.

I always wonder why. Entrepreneurs know their business better than anybody else; they‘ve thought through every facet of it; and they are passionate. Still, entrepreneurs tend to push people away within 30 seconds of explaining their business. So how does that correlate to future sales, interest from investors, or customer feedback? Entrepreneurs who are unable to simplify their elevator pitch should be concerned.  

Below I’ve distilled my own thoughts down to three points that should significantly help you improve your elevator pitch quality.

Explain it like I’m five. The value of explaining your business to a five-year-old is that if you know a child can understand it, you’re essentially making your elevator pitch universally understood. Intelligence is not a common denominator; someone could be more or less intelligent than you, so do not attempt to move up or move down the brain scale to match your audience. Rather, explain your elevator pitch like shapes and colors. Green triangle and blue square make a lot more sense than automated marketing customer relation software for the end-to-end fintech API solution provider, right? Explain your pitch to everyone like they are five because you have time to elaborate and get technical with the follow-up questions.

Put yourself on the other side of the table. When you are pitching elevator-style to a new person, think about how it is being received before saying it. If I tell you that I am going to drastically improve the ROI on your outbound sales by publishing content-driven design decisions across your entire organization by leveraging my SaaS graphic design platform, do you feel intrigued? Whether it is a business software platform or a mobile app, the feeling is the same. Think about how your own message would be received if it was delivered to you; if you feel comfortable and receptive, even excited, great, you are probably beyond the advice in this blog.

Quit trying to butter me up. Let’s be clear: you aren’t going to get me to invest in your product in 30 seconds, so stop trying to make the elevator pitch the climax of your story. Your goal is not to convince me I should invest, or become a client, or partner with your business; the goal is to let me know exactly what you do in the shortest amount of time possible. Taking into account the first point, the elevator pitch isn’t about your fancy algorithms or defensible intellectual property, it is imperative information. The phrase “go grab lunch, I’m hungry” leads to more questions, while the phrase “go grab a Reuben from Diamond Deli” does not (my twin brother, Jack, came up with that one). Tell someone about your Reuben, not that you’re hungry.

These three points should help you simplify your elevator pitch. Finally, remember to keep it  under 30 seconds; assume the other party is truly busy and doesn’t have the time or interest to hear the seven-minute spiel about your groundbreaking, revolutionary company.

The more you understand your startup and your audience, the easier it will be to keep your explanations simple.

 

 

Picking a name for your business: understanding trademarks

 AnnalVyas (1)  Startups inevitably face the difficult task of coming up with a name for their company. Among the many things you need to consider during the process is trademark law. Why? Simply put, certain names can get trademark protection, while others can’t.  Understanding the rules for getting trademark protection will save you a lot of time and possibly a lot of headache. 

By way of background, a trademark is something, such as a word, phrase, or logo that identifies your brand to consumers. Trademark law exists for one reason: to prevent consumers from being confused.  For example, I couldn’t open up a shoe store and call it “NIKEY” (note the extra “y”), and all of a sudden claim I’m different from the popular NIKE shoes.  A consumer would be confused as to whether my NIKEY shoes were someone manufactured, affiliated or endorsed by NIKE.  

The following is a brief guide to the types of marks that exist and which ones may or may not be protected:

  • Generic marks – Imagine you are selling pizza, and you call your pizza shop “PIZZA.”  Clearly, you could not get a trademark on the word PIZZA, and prevent others from using the word pizza when selling their pizzas.  Generic marks can never receive trademark protection.
  • Descriptive marks – Imagine now that you call your pizza shop “CHEESY.”  The default rule is that you cannot prevent others from using the word “cheesy” when selling pizzas – after all, your competitors need to use the word cheesy to describe what they’re selling.  There’s an exception to this default rule, though it doesn’t come up as often.
  • Suggestive marks – Think of “MUSTANG” for cars.  A mustang is strong and fast, and similarly, Ford wants you to think that their cars are strong and fast.  Note that unlike descriptive marks, suggestive marks have some type of imaginative leap between the mark and the goods being described. Suggestive marks can receive trademark protection. 
  • Arbitrary marks – Think of “APPLE” for computers.  No inherent relationship between an apple and a computer exists.  Arbitrary marks can receive trademark protection.
  • Fanciful marks – A fanciful mark is a made up word, such as “XEROX.”  A fanciful mark can receive trademark protection.
  • Rules on names – First and last names together can be trademarked (for example, Sarah Palin has trademarked “Sarah Palin” in relation to giving political speeches).  However, a last name alone usually will not be able to be trademarked.  

You automatically acquire trademark rights by virtue of using a mark.  So a business that operates under a particular name in Akron has trademark rights in Akron, without having filed any paperwork with the government.  However, if a startup wants protection in multiple states for its name, they may want to pursue a federal trademark registration.  If a business has successfully obtained federal trademark registration, it can use (R) in conjunction with its mark.  If a business has not yet obtained federal trademark protection, but nonetheless wants to signal to the world that it views a particular mark as its trademark, it can use TM for goods or SM (service mark) for services. 

If you choose to pursue a registration of your trademark, consult an attorney qualified in the process. There are many legal tests that need to be passed in order to receive federal trademark registration and using counsel that is familiar with the registration will be worth the investment.

The following in no way constitutes legal advice, and should not be construed as such. Rather, it is a general summary that you should not rely upon.  For information specific to your situation, consult an attorney. 

Use criticism to make your work even better

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Regardless of where we are in our career, we are all still learning and continuously improving.

It can be a challenge, however, when that valuable knowledge is offered to us in the form of criticism. Criticism may come from associates, peers or other organizations.

And it comes in many forms, including employee complaints, peer reviews, annual job reviews, feedback from customers or clients or rejection of proposals. It seems there is all too often that one person who tells you your project will not work or that your ideas aren’t good enough.

Criticism is a tough pill to swallow — constructive or otherwise. It’s almost impossible to not have an emotional reaction. You may discount the criticism and become defensive. After all, you’re the one with the experience who put the effort into your idea, project or organization.

However, once you’ve stripped away the emotion, there is almost always a grain of truth left. Like a grain of sand, if put to good use and given a little time, that grain can turn into a pearl — a pearl of wisdom that could be the missing link to success for your next project.

Indeed, when trying to get big projects off the ground, they very often do not go as planned. In our business working with entrepreneurs and startups, we have to write proposals and present ideas to a multitude of different types of people and organizations, whether investors, government entities or other potential partners.

I have been asked to clarify, present additional information or been rejected outright. But I’ve come to learn that these types of comments can be a tool or a ladder rung to the next level and the key to a new or better idea.

Consider criticism carefully

Allow yourself to experience the emotion you feel when you receive the criticism, but preferably in private, and talk it through with a close colleague, friend or significant other. Then turn it into constructive action. You should also take a moment to guage whether it is, in fact, criticism.

Sometimes we are so close to our own projects, it’s hard to see the bigger picture. Ask yourself if it isn’t just an inquiry to obtain more information or a request for clarification that may have come off as sounding critical.

That person could very well be on your side, but doesn’t understand or isn’t clear about what you are doing or presenting — or simply requires additional information to make a decision. Put yourself in their shoes, take the emotion out of it and help them see your vision.

Figure out what parts of the criticism can legitimately be discarded. Possibly, there are these issues that can be overcome with improved communication.

Target the nuggets of truth. Where is your weakness? What has been overlooked? Where can a more complete approach make a difference? Make an action plan to overcome these issues and communicate the changes you have made.

By viewing criticism not as a personal attack but as the discovery of valuable insight into your challenges, you can use it to strengthen your programs and deliver more meaningful solutions.

Originally published in Smart Business on February 1, 2016.

Small business focus: Turning weakness into strength

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In small companies, resources are limited and people must wear many hats.  With too few resources at hand, uniquely talented individuals are sometimes assigned mundane tasks because they can do “anything and everything.”  It may seem advantageous to save time and money by using good people for everything; however, you also run the risk of burning that person out and losing them. If you can’t take on more employees, how can you work as efficiently as possible, while keeping talented individuals happy and productive? In this, I am reminded of the Theory of Constraints, a management paradigm often simplified to the expression that “a chain is no stronger than its weakest link.” 

 The Theory of Constraints was introduced in 1984 by Eliyahu Goldratt in his book entitled The Goal.  It is based on the premise that improvement for goal-oriented companies is often limited by one or more constraints and, by focusing on these constraints, a company can improve its operations and its success.  Basically, the constraint becomes a focusing mechanism to improve the company. 

 Years ago, I worked for a company and one of our constraints was the way we were using our leading researcher. The fellow was an amazing talent and we had serious R&D tasks at hand.  But we also used him for another very important task---training new customers.  This was a new and innovative cardiology technology that was being marketed to leading researchers at leading medical schools.  It was critical that after purchasing the system, a customer learn how to use our product effectively.  Often, these early customers would want to confirm the product utility on their clinical patients---and we wanted this data as well as it often resulted in peer-reviewed publications in prestigious medical journals touting our system.  This was a good thing as it resulted in more sales.

 In the early phase of product introduction, sales were one or two units per month.  And we’d send our researcher out for two days of training at each center.  Over time, sales increased to five to six systems per month; then, we’d have to have him out 10 to 12 days per month.  He did not particularly like that level of travel and it prevented his doing what he viewed as the high-value research that he was passionate about. 

 One day, after listening to this dedicated employee again express his frustrations with not having the time to do his research, somebody came up with the idea of scheduling one or two training sessions per month at our Oklahoma City offices and flying the customers, at our expense (air, hotel, parking, meals and incidentals), to our location.  I do not really remember exactly who had the idea, but it was a stroke of brilliance.  We did, by the way, nearly go into shock as we toted up the travel costs.  It took several discussions before we believed the costs were the same.  We had training in Oklahoma City for two to four days per month.  Our star trainer did not leave home.  The customers, MD and PhD researchers from leading US medical schools, got away from their offices and away from their beepers, and focused solely on our product.  The hard out-of-pocket costs were equivalent.  But the value of the training, the customer retention and the long-term satisfaction of users all improved dramatically.  Importantly, the research relationships that we were keen to establish and were the foundation for future sales were also dramatically improved.   If we hadn’t made this change, we probably would have lost the employee, and for our small company at the time, this would have been truly devastating. 

 Small companies would do well to make time to focus on the “weakest link in the chain” and take steps to improve the structural operation of their companies.  Sometimes the fix isn’t in our hardware or software, it’s in the way we are using our people. 

Step by Step: The Importance of Milestones in Goal Setting

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Happy New Year and welcome to 2016!  I hope you all had a wonderful holiday season.  Now, it’s time to take on those New Year’s resolutions! 

Most of us start off the year with new goals to tackle; however, all too often, we end up stopping short of our final destination. We run out of time and/or dedication or perhaps our goal was too daunting to even start; resolutions are often pushed aside as we settle back into our normal, comfortable routine.  So if you are really serious about being successful, it may be useful to think about setting mini-milestones on the way to your  final objective.

This advice is especially critical for startups, because almost all entrepreneurs have the same end goal – to be successful. However, there are many goals that they need to hit along the way. Often, these smaller goals, themselves, can appear daunting, let alone the big one to “make it big.” In order to make each growth goal more achievable, setting milestones within those goals will help create a step-by-step process for completion and (hopefully) success.

For example, one of your goals may be raise a “Series A” round, i.e. a first significant round of venture capital financing. Simple enough, right? Go get money. But where do you start? This is where milestones come into play. Your plan may look something like this:

  • Milestone 1: validate value proposition and customer segment. Your early investors will want to see that your company is solving an existing problem or filling an unmet need. 
  • Milestone 2: complete market research. Your investors will also want to know that you’re operating in a market that can accommodate growth.
  • Milestone 3: develop a professional pitch deck to present to potential investors.
  • Milestone 4: identify and contact investors. You’ll need to present this deck to the right people so take some time to research and develop a quality list.

You have now broken down a relatively lofty goal into four achievable milestones that will help you stay organized and meet this end goal.

Seeing the forest and the trees

It sounds simple enough, but sometimes it’s hard to see the little milestones within a large goal. For instance, you may know that you need FDA regulatory clearance, but you have no idea where to start. This is where enlisting the right people comes into play. Whether you hire someone to help you or you work solely with your core team, using the people around you to help set milestones will make the entire process seem less overwhelming. The ideas and discoveries that come out of brainstorming sessions can also be extremely important.  And don’t forget about your EIR! Your entrepreneur-in-residence/advisor/mentor (or whatever you call them) can be critical during this process. They have most likely been in your shoes before and will be able to identify the steps you need to take to get to the next level. If you’re a startup in Northeast Ohio, you are already ahead of the game with a support network filled with experienced entrepreneurs ready to help you achieve your next goal, and set the milestones along the way.

Looking at the forest while also being able to identify the trees is a skill that most of us desire: find the details in the big picture and make it work. Whether you’re an entrepreneur trying to get that startup off the ground or simply someone trying to keep up that New Year’s resolution, setting milestones along the way is bound to make achieving your ultimate goal more attainable and more realistic.

Comfortable with the uncomfortable

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One of the things I enjoy most about being an entrepreneur-in-residence (EIR) and working with entrepreneurs is their excitement and enthusiasm for what they do. Hearing someone talk passionately about their idea or new technology further inspires me to do all that I can to help them get to where they need to be.

However, establishing a startup is not an easy row to hoe. Excitement and enthusiasm may wane or even disappear for a time, as companies struggle to find their true identity and purpose and especially as they try to cover negative cash flow in the early stages before their new product or service is bringing revenue in from real customers. This is a scary time experienced by most startups. So much so, that it has a name – the “valley of death.” During the valley of death curve, additional financing is usually scarce, leaving the company vulnerable. It is during this time that a lot of startups risk going out of business. How an entrepreneur deals with it will determine the future of their endeavor.

Uncomfortable sweet spot

No doubt about it, there is a lot of pain at this point in a startup’s journey, whether it’s relational, financial or even physical. And I certainly don’t like seeing anyone in pain. But, it is at this juncture that my job as an EIR is most valuable. In other words, this is the point when our clients need us more than any other.

Aside from the most obvious solution of helping a client find sources of funding to help get them out of the valley of death, I think there are other things that an advisor can and should do to help a client with potential for great things. There are several things I can think of that help the process and keep everyone moving forward:

  • Let them know we care. This is important. Going out on your own, even if there is a team, can be a lonely business. We want our clients to know they are not alone and that there is someone who truly cares whether they survive.
  • We don’t let them fade into the woodwork. We keep a watchful eye on what’s going on and make temporary adjustments in negotiable areas where possible, such as rent and other overhead costs.
  • We give them some tough love. It may be necessary to encourage and advise a client to take a hard look at their business. I compare startups to Clark Kent. Dig deeper, look further and underneath the surface, we might find Superman. This may require bending, pivoting and sometimes even completely scrapping an original idea, but a “Superman” idea might be in there somewhere, we just have to find it.

Trust the process

Today’s entrepreneurs are smarter and savvier than ever and their technology is changing the world. Enthusiasm, excitement and passion are important, but even more so are resiliency, flexibility and being open to advice. I’m here to help, but it works best if it is a partnership. And it’s not necessarily during the valley of death. Initially, there may be unclear goals, gaps in a business plan or the technology is not where it needs to be. At any of these moments, it would be easy for us to say no because there are so many unknowns. But we’d rather say yes. The rest will follow.