Knowledge@Wharton has an excellent interview with Subroto Bagchi:
There is a mistaken notion that every start-up [begins its existence in] a garage, and a [garage-sized firm] doesn’t have to have a process. More start-ups remain at that size and then they go off the scene, because they fail to embrace process. Even if you start small — and you have to start small — you can pretend that, “You know what? I’m a Fortune 500 company, and I need to front-load my organization with the right process.” This is because process is not about a framework that will bind you up; process is like plumbing. It’s like infrastructure.
Let us imagine that you want to someday build a skyscraper. You have to pre-think what plumbing must go into the skyscraper. It cannot be an afterthought. The plumbing you require for building a skyscraper is very different from the plumbing that you require for a two-bedroom house. You don’t build the plumbing for a two-bedroom house today and say, “As I build another floor, and then another floor, I will add to the plumbing.” No. That doesn’t work. So you have to pretend that, “I am a skyscraper.” The inlet and outlet for the skyscraper is going to be very different. So pretending [or imagining] is a very, very important thing.
Fred Wilson writes:
I have two meetings this week with guys in their early to mid 40s that are two of the best entrepreneurs I’ve ever worked with. Both are asking me the same thing – “what should I do next?”
There are questions of motivations, work/life balance, not needing the money, looking for a big idea, etc.
One of them asked me – do you know any 45 year old entrepreneurs?
Yes I do. But only one of the entrepreneurs in our current portfolio is older than 45. And he’ll probably be starting companies until he dies. It’s what he does.
But the facts are pretty eye opening. Nine of our eleven entrepreneurs are in their 30s. One is in his 20s, and one is in his 50s.
That says to me that prime time entrepreneurship is 30s. And its possibly getting younger as web technology meets youth culture.
Well, I will be 40 in August – and have been an entrepreneur for 15 years. Am I past my prime or does the best lie ahead? Only time will tell.
GigaOM writes about HitForge:
HitForge is an entrepreneur cooperative composed of independent small teams, where people can apply with their ideas, join the team, and see their idea go from idea to product in a few weeks, largely with help of an offshore engineering team.
If it works, then the product is turned into a company. If it doesnt work, the product is killed, and the team moves onto something new. HitForge is out of a few thousand dollars. The team whose product got killed still gets to share in the hits that come out of the cooperative, Ravikant says.
Ed Sim writes: “Big companies move slowly and often change their minds. A relationship with a big company will surely take time and cost you money whether in upfront dollars or expenditures on resources. And while we would all love to build our business off the back’s of other brands and distribution, at the end of the day, in order to create a big winner, it is imperative for startups to control their own destiny. This means that your business has to be able to grow organically and not have its fate fully dependent on its partners. What this means is that first and foremost you have to have a killer product, one that people love, can’t live without, and share with others. In this new world of mashups, open APIs, and widgets, startups can easily get distribution. Getting customers and revenue is a different story altogether. Remember, distribution doesn’t matter if people don’t use your product or service so start with the basics and figure out how to make your product a must have that someone will pay for.”
Inc has an inspiring story of how Vikas Goel built eSys.
Goel is the 36-year-old CEO of a Singapore-based company called eSys Technologies, which he founded in 2000. Born in India, he had arrived in Singapore in 1996 with no capital and no contacts. Four years later, he launched eSys with one employee and a part-time staff member working in a one-room office. On the surface, his timing could hardly have been worse, since right about then the bottom dropped out of his chosen line of business, the distribution of computer components.
But where others saw potential disaster, Goel saw opportunity. And by 2005, the company had sales approaching $2 billion, 112 offices in 33 countries, and four manufacturing plants where its employees assembled the products it had begun to sell under its own brand name, including a PC that went for about $250 at retail. Goel had accomplished this, moreover, without taking on any long-term debt or bringing in any outside investors–and while operating with a gross margin of as little as 3 percent.
Venture Hacks is a new site for entrepreneurs.
Paul Graham writes about the reasons why people do not do a startup.
1. Too young
2. Too inexperienced
3. Not determined enough
4. Not smart enough
5. Know nothing about business
6. No cofounder
7. No idea
8. No room for more startups
9. Family to support
10. Independently wealthy
11. Not ready for commitment
12. Need for structure
13. Fear of uncertainty
14. Don’t realize what you’re avoiding
15. Parents want you to be a doctor
16. A job is the default
Fred Wilson writes why seed investing is less risky than later stage investing:
My basic point is in seed/early stage investing you ante a little, see your cards, decide if you want to invest more in your hand, see some more cards, etc, etc. You get to stage your risk capital as the investment shows itself to you over a number of years. You can manage all kinds of risk this way; management risk, valuation risk, technology risk; and market risk. Classic later stage investors want to be in the last venture round and in that scenario, you are putting all your chips on the table before you’ve really seen your cards.
Later stage investors can’t impact the development of the company. They have to accept the direction that has been put in place before they came in. We typically invest in pre-revenue companies. Usually they have the technology platform in place and in most cases, they have launched something with some success. But getting the business model and market entry strategy (the angle of attack) right is key.
A nice presentation by Will Price.
Business 2.0 writes: “From Dogster to Google, Web companies are finding that mistakes can be shortcuts to success.”
Where old-economy giants once boasted of running “zero-defects” operations, today’s successful Internet businesses embrace defects as a way to get things right. Some management consultants even advise their clients to “get good” at screwing up.
“Failure is the enemy of efficiency, but it’s the best way to learn,” says Robert E. Gunther, a business consultant for Decision Strategies International in Conshohocken, Pa. Gunther encourages clients to make “deliberate mistakes” to learn faster.