If you look back on your life, you may discover that you are a very different person today than the person you were when you first decided to become an entrepreneur.
Being an entrepreneur requires the ability to ride the high and low tides of emotion. You have likely navigated the waters of elation and joy, and uncertainty and fear. You have had to process the emotions that arise from hiring or firing employees and partners. You have probably had to find the inner strength to persevere when others didn’t believe in your vision. You may have come face to face with your internal dialogue about failure and success.
Each day brings opportunities to engage in the personal growth that is essential to the process of becoming a successful entrepreneur.
Here are a few tips that can help you be resilient and victorious on the journey.
First and foremost, it is important to realize the journey of being an entrepreneur is a process of self-discovery. Awareness is the essence of being human. With this insight you will be able to remind yourself to look at growth and challenges as opportunities. You will have a choice in every situation and life becomes a journey.
Secondly, create a practice of checking in with yourself to determine what limiting beliefs keep you from achieving your goals. For instance, is there some unconscious belief about money or doing things a particular way that is getting in the way of getting funding or taking your business to the next level? So often we find external reasons why we cannot overcome obstacles, like a customer’s lack of money to spend on a product. This may be the case, but sometimes if you look within you see a different story. It might have been your set of beliefs and values communicated through words or body language influenced the customer’s decision not to buy. Self-knowledge can help you gain perspective of the system in which you and your business live. This powerful edge can help you become a cause rather than an effect.
Next, make a list of all the minimized programs in your life. We all have “To do” lists that are a mile long. Just like your computer, when there are several windows open, even if you minimize one of the windows, isn’t it still lurking at the bottom of your screen? We do this with many things in our life and at a certain point they begin to drain your energy and confidence level. Is there some underlying program that is sapping your energy? Review your “To do” list and see what you can quickly cut out or out source.
Do something for your body – whether it is a workout at the gym, a yoga class, or a walk in the park, take a few minutes every day to revitalize the body and get the creative juices flowing.
A meditative practice to quiet the mind or to practice observing yourself is very useful. Meditation
allows the brain time to process things that you are working on. You may find what was elusive before meditation comes bubbling up from the unconscious once you allow yourself a little space. Insight into your self, into your partners, customers, or other relationships gained through meditation can help you be more relaxed and focused as you take your entrepreneurial game to the next level.
At the next Bootstrap Meeting on May 10 at 6:30pm, we will provide you with an opportunity to explore your Inner Journey through a deep guided meditation. Please RSVP to attend
I would like to congratulate Austin Mayor Lee Leffingwell
and the City Council
for holding its first Small Business Summit in March.
Forty of us were invited to give our thoughts on the major ways the City could address business owners concerns. The Summit was limited to two hours. Pretty short and sweet.
We had been asked to prepare to discuss three questions:
1. What steps could the City take to better assist small local business owners with planning and development?
2. What steps could the City take to help create a better overall environment for small local business owners to succeed?
3. What are some specific obstacles you have encountered in interacting with the City, and how do you believe these could be addressed?
After we determined the issues for our table, we were given three minutes to present those to the whole group. A total of about sixteen different items were presented as needing City attention with several "dittoes" as time got shorter and other tables came up with similar issues.
By an odd quirk of fate, this very "public" meeting had not been posted in advance. This meant that the Mayor and Council had to rotate in and out of the room so they would not violate the Open Meetings ruling.
Without taking anything away from the Summit or the report that is being assembled by Rosie Jalifi and the City's Small Business Development Program staff, I want to mention four concerns I have.
1. No context.
We did not hear the discussion at the other tables and were only presented with the issue as part of a list. That made it hard to understand the context. It was hard to tell if some of the concerns people listed were universal or more industry specific for instance, home owners vs. music venues; certain kinds of permitting; the power of the Neighborhood Associations.
Since each Council member heard even less of the discussion, I believe their perception is even more compromised. How these are presented in the report is going to be very interesting and a real challenge for staff.
2. Size considerations.
Small is a relative term. Are we talking less than 500 employees (federal definition), less than 100 (State definition) or an even smaller firm, a "micro business", one with less than 20 employees? In the Austin area, over 80% of our small businesses are really micro businesses where the owner is the owner/investor, manager, and employee. Looking around the room, I saw micro businesses.
Again, it would be useful for Council and staff to know what the issues were by size or complexity of the business. It does make a difference when it comes to deciding where the City can or should make changes. As one of these "micro" businesses and as someone who works exclusively with owners of enterprises of this size, I can guarantee you we look at life and work differently than Yellow Cab, one of the other Summit participants.
3. Not enough clarity. Not enough time.
The Summit could have focused on identifying problems or recommending solutions. I think it tried to do too much in too little time. As a result, what I heard from the three-minute presentations from the other tables was a mixture of both. I am not sure what conclusions I would draw if I were either staff or Council.
There is a pattern to draw on. For many years in the 90's, Texas regularly held the Governor's Conference on Small Business. Business owners from all over the state gathered to talk about problems and issues and propose solutions. Then we went to work to get it done. It was great brainstorming and strong networking. This ended in about 2000 and NFIB (National Federation of Independent Business) and other groups started to hold Small Business Legislative Day. Not as good but better than nothing.
As a former delegate to the Governor's and White House Conference and Congressional Summit on Small Business, I have seen real change come from this kind of event but it takes more time than two hours on one day in March.
4. The beginning or the end.
This is my biggest concern.
The Austin City Council has started something with this Small Business Summit. It could really be of major assistance to the City's desire to remain a great place to start and run a business. Or it could be just a "two-hour trick pony", a false start leading nowhere. My hope that is that this gets more attention and resources and that it continues.
Austin has made some efforts. For years, we have had City Commissions for minority and women-owned business. Good work has been done but not enough has been accomplished. In addition, this has left out other businesses (non-minorities) and divided the small business community into two camps. The economic pie is too small for that to continue.
I believe it's time that Austin find ways to support a united small business community while recognizing that we do have some unique concerns because of our size and industry differences.
Recommendation to Other Owners
If you own a business, I encourage you to get involved. Pay attention to what is happening. What happens in Washington is important but a long way away from here. What happens in Austin, happens to you and works either for you or against you.
I am also interested in what are your concerns and issues. Please post a comment or contact me directly at firstname.lastname@example.org. I look forward to continuing this effort and this discussion.
Here's to your success!
Business Success Center
Labels: AIBA, Austin City Council, Austin Small Business Summit, City Commissions, Governor's Conference on Small Business, Neighborhood Associations, permitting, Small Business Legislative Day
This article originally appeared on Ash Maurya's blog: Practice Trumps Theory
While not the same thing, Bootstrapping and Lean Startups are quite complementary. Both cover techniques for building low-burn startups by eliminating waste through the maximization of existing resources first
before expending effort on the acquisition of new or external resources. While bootstrapping provides a strategic roadmap for achieving sustainability through customer funding (i.e. charging customers), lean startups provide a more tactical approach to achieving those goals through validated learning.
But before going any further, I'd like to dispel some common misconceptions about both models:
Myth: Lean Startups are cheap startups
Steve Blank wrote a similarly titled post
to address this mis-definition. Yet, I still hear lots of people wrongly associate the word "lean" with "cheap". This characterization isn't entirely misguided but it only captures a sliver of what being lean is all about. Eric Ries co-opted the term "Lean" from "Lean Thinking" which comes from manufacturing.Being lean is not about being cheap but being efficient with resources.
Money is just one of those resources and there is a time to conserve spending (before product/market fit) and a time to spend (after product/market fit).
Myth: Bootstrapped startups never raise money
Most bootstrapped startups start with some form of initial self-funding (sweat equity, credit cards, savings, etc.) and work their way towards sustainability through customer acquired funding. However, given the type and stage of the business, even bootstrapped companies can and often do choose to raise additional capital if that's what's needed for growth.
Right Action, Right Time
I've bootstrapped my company for the last 7 years and learnt a lot about bootstrapping from Bijoy Goswami
, founder of Bootstrap Austin. Bijoy doesn't limit the definition of bootstrapping to the more commonly held one about building a company without external funding
but rather views bootstrapping as a philosophy summarized as "Right Action, Right Time".
This mantra applies just as well to lean startups as it does to bootstrapping:At every stage of the startup, there are a set of actions that are "right" for the startup, in that they maximize return on time, money, and effort.
A lean/bootstrapped entrepreneur ignores all else.
While bootstrapping and lean startup techniques are not just limited to funding, funding is one of the first problems entrepreneurs tackle. A lot of (especially first-time) entrepreneurs feel that step 1 is writing a business plan and getting funded. However, during the early stages of a startup, all you have is a vision and a set of untested guesses. Selling this to investors without any level of validation is a form of waste.
Waste is any human activity which absorbs resources but creates no value.
Why Premature Fundraising is Waste
Getting funded is not validation
Seed stage investors are just as bad at guessing what products will succeed as you are. Without any product validation to rely on, they hedge their bets against your team's past track record and storytelling ability. So while getting funded at this stage is a testament to your team building and pitching skills, it isn't product validation.
Without validation you have no leverage
More importantly, without validation you don't have product/market credibility which typically comes at a price - reflected in lower valuations and investor-favored term sheets.
Investors measure progress differently
While validated learning is the measure of progress in a lean startup, most investors measure progress through growth. Reconciling the two during the early stages of a startup (when the hockey stick is largely flat) can be highly challenging and distracting.
Getting funded always takes longer than you think
Time is more valuable than money. Would you rather spend 6 months pitching investors so you can refine a story based on an untested product, or spend time pitching customers so you can tell a credible story based on a tested product?
Too much money can actually hurt you
Money is an accelerant, not a silver bullet. It lets you do more of what you're currently doing but not necessarily better. For instance, if you're building an MVP, more money might tempt you to hire more people and wait to build more features both which can actually hurt you and definitely slow you down.Constraints drive innovation but more importantly force action.
With less money, you have to build less, get it out faster, and learn faster.
Startups that succeed are those that manage to iterate enough times before running out of resources. Time between these iterations is fundamental.
- Eric Ries
What about all the advice and connections?
Raising funding is not the only way to get good advice. You can and should start building a diverse board of advisors early - made up of customer, technical and business advisors. Many are happy just to be asked, others might require a little equity to formalize a relationship.
It is cheaper than ever to startup
The good news is that it is easier than ever to start a company. You don't need a lot of capital to start defining, building, and even iterating a minimum viable product towards product market fit.
When is the right time to raise funding?
It's funny to note how the 37signals folks
went from "Outside money being Plan B to Plan Z" between their last 2 books. Once you're on the other side, it's easy to make such a declaration but there are certainly better times than others to consider external funding.
Both Lean Startups and Bootstrapping define 3 distinct stages of a startup.
While completing stage 1 is the minimum gating criteria for fund raising, stage 3 is the ideal time.
Stage 1: Customer Discovery/Ideation
The objective of this stage is to find a problem worth solving i.e. achieve Problem/Solution Fit. The most efficient way of doing this is formulating a set of hypotheses and then testing them through customer interviews and subsequently via landing pages. This stage usually takes weeks or a couple months to complete.
Being able to demonstrate problem/solution fit through customer discovery findings and landing page conversions is much more credible than an untested story. The question then becomes can you execute on a solution to this problem and get customers to pay you.
Stage 2: Customer Validation/Valley of Death
The objective of this stage is to build something people want and validate your business model i.e achieve Product/Market Fit. This is typically the hardest and most uncertain of the 3 stages as you are simultaneously iterating on product and searching for a repeatable and scalable business model. This stage can take months or years to navigate. Many startups end up running out of iterations here and either seek external funding or give-up.
Having built a minimum viable product and gone through a few iteration cycles certainly puts you in a much stronger position to demonstrate your ability to execute and maybe show some early traction albeit still mostly flat.
Stage 3: Customer Creation/Growth
After Product/Market Fit your objective is to SCALE. This is the only time when both you and investors are aligned on the same measure of progress - growth. Now is the best time to raise funding if you still need it. If you've been charging customers all along, you might find you don't need a lot of additional capital which ironically is the best time to raise it.
How do I survive till Product/Market Fit?
Keep your day job
The first stage, finding Problem/Solution fit, can really be done part-time with very little burn. It typically has a lot of waiting time built-in e.g. contacting customers, scheduling interviews, collecting metrics, etc. Until you find a problem worth solving, it really doesn't make sense to quit your day job.
Build an audience
Now is also the best time to start building an audience around your problem domain. Start a blog. Comment on other blogs. Get active with social media in other ways.
Build a Minimum Viable Product
The outcome of stage 1 is a handful of features. Build just those features, and nothing else
. Again this can usually be done in your spare time but I'd highly recommend full disclosure with your employer before writing any code. You'd be surprised how supportive they can be. I took on a day job at travelocity
shortly after I founded WiredReach
and not only did they not have a problem with it but they actually supported me with a flexible working arrangement so I could get work done at different times of the day.
Conserve burn rate
The biggest burn in a software business is people. Hardware is cheap.
Rent don't buy. Don't scale till you have a scaling problem. Don't hire till it hurts.
Charge from day one
Testing pricing early and getting paid is the ultimate customer validation in a lean startup which aligns nicely with bootstrapping where cash flow is king. Make a goal of first covering your hardware/hosting costs, then your people costs.
Sell other related stuff along the way
It is very tempting to take on unrelated consulting to survive but it becomes very hard (if not outright impossible) to build a great product in parallel. Instead look for other related stuff you can sell along the way. License out a piece of your technology, write a book
, give workshops, get paid to speak, etc.
Shortly after I started building my p2web framework
, I was contacted by another entrepreneur who essentially funded the development of the platform in exchange for a custom application we built on that platform. Not only was this related work, it also helped uncover customer and technology validation.
Speed up learning
A fundamental principle from lean startups is speeding up build/measure/learn cycles and there are a whole lot of techniques at your disposal to do this like continuous deployment, qualitative and quantitative split testing, etc. The key here is keeping your feature set small and spending 80% on existing versus new features. Every addition has to be vetted with validated learning to make the cut. Otherwise kill the feature.
Boostrapping + Lean Startup = Low Burn Startup
Getting to product/market fit or out of the valley of death is the first thing that matters. Until then, bootstrap to buy yourself iterations and apply lean startup techniques to maximize learning from those iterations.
This spring join Leadership Austin
to Experience Austin - a non-profit program that offers an informative, interactive orientation to the city. Experience Austin introduces participants to Austin´s issues, icons and institutions, and the people actively involved in creating solutions. The program is presented as a five session survey of Austin, including behind the scenes tours and introductions to the top leaders in the local government, economic, education, healthcare, arts and entertainment communities.
The Experience Austin program is ideal for entrepreneurs or small business owners and is a must for anyone who values networking and a deep understanding of their community as critical for success. The program increases visibility, fosters high value contacts and creates community context. Experience Austin participants leave with a greater love for Austin and local connections that will enrich both their personal and professional lives.Experience Austin helped me plug into the local leadership scene and quickly survey the major issues that are driving current decisions and future plans in Central Texas. I was also very impressed with the access to experts and their points of view in the areas of civic engagement, economic development, land use, healthcare, education, and the creative culture that makes Austin special. I highly recommend the full program to others who are serious about making a difference but unsure where to begin.
-- Steve Golab, FG SQUARED, fall 2009 participant
When: Friday, April 9, from 8:00 am until 5:00 pm and Tuesdays, April 13, 20, 27, and May 4, from 4:30 until 8:30 pmFull details and registration