The Art and Science of Success in Business

The one and only, new and improved, Interactive Pocket Guide for Entrepreneurs (version 3.1)

2012-02-14T17:32:00.000-08:00

Continuing a tradition that started almost 30 years ago with the publishing of the Ten Commandments for Managing a Young, Growing Business, we are pleased to announce this latest and greatest Pocket Guide for Entrepreneurs. With content expanded over 300%, printed on the highest quality papers, and perfect bound, it is truly the best of its kind.

This latest guide earns the adjective Interactive because it uses QR codes on most pages, allowing smartphone users to link to additional web content, and where readers can post questions, comments, and interact with other entrepreneur/readers. We have never seen another traditional book on any subject that uses QR codes so extensively.

The book sells for only $12.95 per copy. Orders for 5 or more are priced at only $9.95 per copy. Add appropriate tax and shipping. Call 858.699.0901 and ask for Erika to place your order today.

Remember the PC era?

2012-01-18T09:44:00.000-08:00

All signs indicate the end of the PC era. Total mobile devices shipped will exceed all PCs and laptops this year. The PC had a good ride, but 30 years is enough. Now it's time for smartphones and tablets to rule the computing world. Notice the chart below and the trend lines for mobile devices is very similar to the trend lines for early PCs (in direction, but number of units is orders of magnitude greater).

Mark Cuban's 12 Rules for Startups

2012-01-18T09:28:00.000-08:00

From Entrepreneur Magazine:

1. Don't start a company unless it's an obsession and something you love.

2. If you have an exit strategy, it's not an obsession.

3. Hire people who you think will love working there.

4. Sales Cure All.

5. Know your core competencies and focus on being great at them.

6. An espresso machine?

7. No offices.

8. As far as technology, go with what you know.

9. Keep the organization flat

10. Never buy swag

11. Never hire a PR firm

12. Make the job fun for employees

Read the full article for more on each point.

State of the Startup Economy in San Diego

2012-01-17T09:36:00.000-08:00

1. In the first 9 months of 2011 there were 240 hi-tech and bio-tech startups in San Diego, the highest number in several years. (source)

2. $200 million per quarter was invested by VCs in San Diego businesses. But that is less than half as much as VCs invested prior to the recession. (source)

3. Tech Coast Angels (TCA) increased membership from 257 to 304 (counting all 5 locations in SoCal) last year, with San Diego angels numbering over 100 for the first time.

4. The number of applications to TCA for funding increased from 603 in 2010 to 1004 in 2011.

5. The number of new deals invested in by TCA increased about 40% year over year, but the amount invested in new deals increased by only about 15%.

The bottom line: the numbers indicate 2011 was challenging for startups to get the funding they were looking for!

Find Your Software Company's Failure Points

2012-01-13T09:30:00.000-08:00

The Startup Genome is making a science out of finding the predictors for success in startups by analyzing thousands of startups.

Read this short article at SoftwareCEO.com to learn 9 tips for success from the Startup Genome.

Eric Ries, author of The Lean Startup, on This Week in VC

2012-01-12T09:46:00.000-08:00

Here's a video clip you won't want to miss: An hour (+) interview with Eric Ries, the author of The Lean Startup, which is one of the more popular books for entrepreneurs engaged in startups. The host is Mark Suster, a successful entrepreneur and currently a VC in Los Angeles. Here's the link:
http://youtu.be/EMysvIXmbl0

The best Entrepreneur in Europe?

2012-01-11T09:16:00.000-08:00

Spend a few minutes with this video clip of Michael O'Leary making a presentation at the Innovation Convention in Brussels, Belgium. The spectacular success of his RyanAir is a lesson for all of us. Enjoy. Here's the link:
https://www.youtube.com/watch?v=p4HYSsrlcq8

On Failure

2012-01-10T09:01:00.000-08:00

The sad truth is that the odds are you are going to fail. Now what? The words below are from Charlie O'Donnell, a VC, and VCs by definition must accept failure as a normal part of doing business. His original post is here.

"There are a few important lessons you pick up from going through something like this--all of which strengthen your character, confidence, and refocus you on the important things and the best people in your life.

1. You are still standing.

2. What you do over the course of your career and, more importantly, over the course of your life, far outweighs a single play, game, deal, etc.

3. How hard you work after failure will determine your character--not that you failed.

4. Love inspires others to be the best people possible. Hate weakens people and makes them shallow. People can never hate as much as other people can love--so hate will always lose and eventually go away.

5. The idea of giving up and walking away never really enters your mind if you are doing something you truly love.

6. If you are not open to learning from failure, your experience will be a missed opportunity.

7. You will absolutely get another chance.

8. All of the people who know how hard you worked to get to the point where what you did even mattered at all--they'll remember your effort and bet on you again because of it.

9. Your real life results as a person matter more than your Google results.

10. There were tons of factors that led to your efforts even mattering--to think that the results simply came down to you is naive. There's always a bigger picture to keep in mind."

Where do you get the money to start your company?

2012-01-08T20:37:00.000-08:00

Where do most startups get the money they need to startup and grow the company? Click here!

Pssst... Hey kid, want $10 Million in VC cash?

2012-01-07T09:50:00.000-08:00

You just gotta love a great story like this one, where a couple of twenty-something founders turned down $10 Million in VC cash, and made it on their own to build a wildly successful company.

The fun part is that they framed the VC offer letter and it now hangs in the company toilet!

That's some serious cajones!

Read the story here, and think seriously about whether you really need/want outside investment. After you read the story, check out the company website at GrappleMobile.com.

New: Interactive Pocket Guide for Entrepreneurs

2011-12-28T12:19:00.000-08:00

62 pages of Entrepreneurial goodness

The new, improved, expanded, Interactive Pocket Guide for Entrepreneurs beta books are now being distributed for testing and feedback! Only 100 people will be selected to review the beta prototype of our new book and website (ipgfe.com).

We are looking for more beta testers! You could be one of them!

If you have a smartphone, and are interested in giving us your feedback on this product, please contact:

Erika Lal

VP of Admin.

858.699.0901.

Erika@doubleMsystems.com

VP of Administration, Erika Lal

On Solitude Lost

2011-12-22T10:11:00.000-08:00

As the inventor morphs into entrepreneur, precious solitude will diminish.

This is a paradox of becoming an entrepreneur: you give up personal resources so that the enterprise will thrive, and then, years later, if you're lucky, you will enjoy greater resources.

The self-aware entrepreneur will recognize the need to optimize for solitude; to retain as much as possible and to create maximum return to the enterprise for every measure of solitude lost.

See also:
A Thing Done in Peace Exceeds Ten in Panic

Introduction

2011-12-21T22:14:00.000-08:00

This blog is for entrepreneurs everywhere (CEO, CTO, CMO) in startup software companies. You are invited to post your comments, ask questions, and learn from others. The more you use this resource, the better it gets.

For selected entrepreneurs in or near Del Mar (San Diego), we offer more personalized services. Extra consideration for plans that include help to others. If you want to learn more, contact:

Michael McCafferty
Double M Systems

MM@doubleMsystems.com

858.699.0901

Current interests:

1. Early stage software startups, smartphone/internet apps

2. 3D printing

3. Robotics
4. Health care.
5. Productivity tools.

Open Wednesdays

2011-12-20T14:01:00.000-08:00

On Wednesday afternoon we will listen to almost anything! For one full hour you will get the opportunity to present your business proposal and get feedback you can use to achieve your goals.

Here's how it works:

A. Call 858.699.0901 to set up your appointment.
B. We email you confirmation and links to help you prepare.
C. Your hour goes something like this:

- Present your business plan for 15 minutes.

- Q and A for 15 minutes.
- Receive 30 minutes of feedback to fine tune your presentation for VC or Angel investor groups.

- Receive a written summary.

Please call to reserve your appointment. Only $295. (cash, check, PayPal, or credit card). Satisfaction guaranteed. Our goal is to provide affordable and highly effective help to local entrepreneurs.

Freebies, presented at the end of the session:

IdeaGrinder software product.

Interactive Pocket Guide for Entrepreneurs

Badge #2: breaking the FUD barrier.

2011-12-13T19:13:00.000-08:00

There comes a time when you need to do more than you can on your own. You need help. Your vision is greater than you can achieve alone.

You have known this for a long time before you do anything about it. You try to do as much as possible by yourself, for as long as you can. But you know that you're only wasting time, putting off the decision to get help. Fear, Uncertainty and Doubt (FUD) are ruling your life.

You imagine the many nagging little decisions that have to be made before you can actually hire your Badge #2. Running a help wanted ad, a job description, how much to pay, what about taxes, non-disclosure agreements, can you even afford it, is there enough work to keep them busy, where will they sit, is it possible to find someone as good as you need, will they put up with your ways, what if... And the monkey brain thoughts go round and round in your head. You're stuck. And you'll stay that way until you...

Just do it.

Take that first step. It doesn't matter what form it takes. It can be a help wanted ad, or emails to friends announcing your decision to start down the road, and to ask for their help in finding your Badge #2. Take the first step. And then take the next one. Each step a move closer to the goal, each step insignificant in itself. Trivial stones become a cathedral.

As each step evaporates into the distance, it builds strength for the next steps, and builds confidence for the long journey ahead. Soon you will be moving along with surprising speed and endurance.

That first hire may be a partner, or a programmer, or an administrative assistant. But they will always be Badge #2, and you will always remember them as the embodiment of your great enlightenment, your commitment, and your Action.

There's no looking back after Badge #2. Once you have crossed this threshold, it becomes your mission to always be recruiting, to see how many people you can attract to your plan. You are on a mission. You are on a path to a future of your own design.

You are an Entrepreneur.

Who is your mentor?

2011-11-12T09:22:00.000-08:00

The Startup Genome Report 01 contains this startlingly direct statement:

"There are no stage 4 startups that raised money with no helpful mentors."

Why Startups Fail

2011-11-03T13:34:00.000-07:00

From The Startup Genome Project

by visually via

This graphic available at http://visual.ly/why-startups-fail

The 12 Attributes of a Truly Great Place to Work

2011-09-20T08:24:00.000-07:00

From Harvard Business Review, blog network, an article by Tony Schwartz, promises to reveal what we ALL want. You have probably heard all 12 of these attributes before, but when they are listed all together, and by the HBR, it just seems so much more compelling.

Read the story here.

And then just start in on the list, and plan to tackle one attribute per month, and in one year you will be a Truly Great Place to Work! Wouldn't that feel great?

Begin it Now!

Trada for Paid Search, AdWords Campaigns

2011-09-01T14:03:00.000-07:00

If you're selling online, you need Trada.To do paid search right, you need thousands of relevant keywords and hundreds of targeted ads. If you're not running campaigns on Google, Yahoo! and Bing, you're missing sales from a massive audience of consumers who can't find your business. To get results from paid search, you need to spend hours working on it every day.Run your campaign in Trada.

Trada is a crowdsourced marketplace where you can run your PPC campaign, leveraging the skills of more than 500 certified paid search experts. An average campaign in Trada runs 6500 keywords and 110 ads. Plus, it runs on three ad networks: Google, Yahoo! and Bing.

Why do it yourself, when you can get better results with Trada? There are no fees.

top

The Illusion of Winning

2011-08-21T12:04:00.000-07:00

Scott Adams, creator of the wildly popular cartoon series Dilbert, is a pool shooter of some considerable skill, it seems. Although I have never seen him shoot a ball, his post on the subject of The Illusion of Winning demonstrates a deep understanding of what it takes to succeed in this game/sport/art form.

As a pool shooter myself, and I might add with considerable humility, who has demonstrated a high degree of expertise, I suggest that the principles he describes apply equally to most of life's pursuits, including Success in Business!

Click here to enjoy his post!

What Does a CEO Coach Do?

2011-08-17T11:33:00.000-07:00

If you have ever wondered why/if you and your business could benefit from the perspectives of a CEO coach, you should check out this video clip featuring Jerry Colonna:

10 Things Successful Startup Founders Never Say

2011-08-15T09:12:00.000-07:00

This is some very educational material,

and I'm sure you'll see the humor in these

Ten Things I've Never Heard a Successful Startup Founder Say

The business of being an angel investor

2011-08-14T11:11:00.000-07:00

For the last several months my focus was on the substantial remodel of my home. My living conditions were sub-optimal.

However, yesterday was a return to active angel status. From 9:30 am through 1:30 pm there were presentations from 5 different startups, all seeking help from the approximately two dozen angel investors in the room. Each presentation has 5 parts: to start, a member gives a very brief intro, then the startup CEO presents his business for about 10 minutes, followed by a period of Q&A, after which the CEO is excused from the meeting and the members discuss the deal for a few minutes, and finally, the CEO is invited back to the meeting and given feedback, including a list of members would like to help. To state the obvious, the pace is Fast!

I thoroughly enjoy these presentations and the quick feedback of the other angel investors. There are some Very Intelligent people in the room, who have great business experience as well as technical expertise in diverse fields.

It may seem like a fool's errand, because each company is likely doomed to failure, at least from an investment perspective. If the odds of any company applying is 100 to 1 against them, and I could bear to see 5 propositions in 1 day, it would take 20 business days (about a month) to find a good investment. That's 12 per year*, assuming not much time to enjoy life in general, so let's say 10 per year. An average angel investor might expect a 1 in 10 success for any one startup in his portfolio.

But even that 1 in 1000 still has great odds against becoming a financial success. Of 100 exits, there is a 50/50 chance of making a profit of any size. And only a 1 in 100 chance of returning 100x. So, if 1 in 100 startups return 100x, even then the best you can do is stay even. Being an angel investor seems to be a sub-optimal career choice.

Therefore, there must be other reasons to be an angel investor. What I look for in the value proposition is that it helps people. If the startup is just in it to make money with a fast flip, I will probably pass on the deal. But if it focuses strongly on helping people in some way, has a first class Team, good business model, barriers to entry... only then am I interested.

------------------

*Even if you could take the hectic pace of 12 investments in your first year as an angel investor, it is doubtful that the pace could be continued. Startups need care and feeding for life; this reduces time to look at new investments.

Note: An additional point not mentioned above is that it takes on average 5-8 years until exit. Investors want a payday sooner rather than later, and what's good for the angels may not be good for the company and founders. All these factors argue for considering another line of work!

The Benefits of a Board of Advisors

2011-07-27T10:32:00.000-07:00

There's an article in Entrepreneur magazine online with the title "The Benefits of Bringing In an Advisory Board" and you can read it here. Although it is a rather skimpy article, and doesn't go into much detail about all the benefits, the point can not be made too many times: if you are serious about your business, then start Now to build a Board of Advisors.

I know from personal experience that it makes all the difference in the world to run your business in a professional manner. Unfortunately, most business founders allow themselves to be so distracted by day-to-day issues that they don't give adequate attention to building the structural foundations of the business.

The Board of Advisors is THE best foundation for a serious (non-lifestyle) business. Begin it Now!

Startup Genome Report - Summary of Findings

2011-07-07T16:35:00.000-07:00

You really should download the complete report and get on the list for updates, but for the time-challenged entrepreneur (who isn't?) here are a few of the more important findings of the study:

1. Founders that learn are more successful: Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth.

2. Startups that pivot once or twice times raise 2.5x more money, have 3.6x better user growth, and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all.

3. Many investors invest 2-3x more capital than necessary in startups that haven’t reached problem solution ﬁt yet. They also over-invest in solo founders
and founding teams without technical cofounders despite indicators that show that these teams have a much lower probability of success.

4. Investors who provide hands-on help have little or no effect on the company's operational performance. But the right mentors signiﬁcantly inﬂuence a company’s performance and ability to raise money. (However, this does not mean that investors don’t have a signiﬁcant effect on valuations and M and A)

5. Solo founders take 3.6x longer to reach scale stage compared to a founding team of 2 and they are 2.3x less likely to pivot.

6. Business-heavy founding teams are 6.2x more likely to successfully scale with sales driven startups than with product centric startups.

7. Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric startups with no network effects than with product-centric startups that have network effects.

8. Balanced teams with one technical founder and one business founder raise 30% more money, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams.

9. Most successful founders are driven by impact rather than experience or money.

10. Founders overestimate the value of IP before product market ﬁt by 255%.

11. Startups need 2-3 times longer to validate their market than most founders expect. This underestimation creates the pressure to scale
prematurely.

12. Startups that haven’t raised money over-estimate their market size by 100x and often misinterpret their market as new.

13. Premature scaling is the most common reason for startups to perform worse. They tend to lose the battle early on by getting ahead of themselves.

14. B2C vs. B2B is not a meaningful segmentation of Internet startups anymore because the Internet has changed the rules of business. We found 4 different major groups of startups that all have very different behavior regarding customer acquisition, time, product, market and team.

The Startup Genome Report

2011-07-07T16:28:00.000-07:00

A new framework for understanding why startups succeed.

This report reveals in-depth research about what makes Silicon Valley startups successful. The report is a 50 page analysis based on data from 650+ web startups. The report was coauthored by Berkeley & Stanford faculty members. Other contributors include Steve Blank, the Sandbox Network, and 10 accelerators from around the globe. The goal of the report is to lay the foundation for a new framework for assessing startups more effectively by measuring the thresholds and milestones of development that Internet startups move through.

This report is the Startup Genome Project’s ﬁrst step toward cracking the innovation code of Silicon Valley and spreading it to the rest of the world.

Download your (free) copy of the Genome Startup Report here.

Exit Early, Exit Often!

2011-06-20T20:03:00.000-07:00

There is some compelling evidence that the traditional VC investing model is sub-optimal for today's marketplace. VCs tend to need much longer to get the high multiples they need for their portfolios, but there is a sweet spot for tech companies (probably not for bio-tech) funded solely by angel investors, where exits can be done in 1-3 years and be very profitable. Check out these videos by Basil Peters.

Early Exits Overview - part 1

Early Exits Overview - part 2

Early Exits Overview - part 3

How to raise a billionaire

2011-06-14T10:10:00.000-07:00

There's an interesting story in the Wall Street Journal Online, with the catchy title "How to Raise an Entrepreneur" but I like to think of it as Entrepreneur = Billionaire. I suggest it would be very difficult to become a billionaire without being an entrepreneur along the way. For parents, it could be mighty useful to breed a billionaire. And nowadays, if it's going to happen, it will most likely happen sooner than later; that is, while the child is still relatively young, and therefore more likely to benefit from parental guidance. So, if you are thinking it could be to your benefit to have a B-kid, read the story!

The Difference

2011-06-11T08:40:00.000-07:00

Successful and unsuccessful people

do not vary greatly in their abilities.

They vary in their desires to reach their potential.

John Maxwell

People! Always Be Recruiting; Hire Slow, Fire Fast

2011-06-10T12:20:00.000-07:00

Those who know me have heard me say it more than once. It's almost a mantra. "Always Be Recruiting" is just one of those basic truths, right up there with "Sales Solves All Problems". More on that one later, but for now, let's focus on "Always Be Recruiting".

Many entrepreneurs agonize over when to hire, and tend to delay it for as long as possible. And when they finally get around to admitting that they need that one more person, it's usually an emergency! This leads to hiring a sub-optimal fit for the job, the corporate culture, the team, and for the new team member.

Now consider the entrepreneur who knows to Always Be Recruiting... there is no emergency hiring situation because they have been nurturing that next key hire for some time and they know they will be the perfect fit for all involved.

For more on this topic, check out this excellent article: "In This Market You Grow By Recruiting, Not Hiring".

Here's another bit on hiring, which I agree with only 50%: "Hire Fast, Fire Fast". Again, those who know me have heard me say, many times: "Hire Slow, Fire Fast". The point of the story is that in a startup, you need to Hire Fast, but I disagree and point out that if you follow the advice to Always Be Recruiting, you should (almost) never find yourself in a position where you need to Hire Fast. Check out the story and see if you agree.

In any case, we do agree on Fire Fast. This is such an important thing that entrepreneurs seldom do. After all, who wants to fire someone? Maybe, with a little more training, or a verbal warning, or maybe when we get past our next milestone... Yeah, right, that's not going to make a frog into a prince. A frog is a frog. Get rid of them as soon as humanly possible. Keeping them around is perpetuating a bad decision, and convincing every other employee that you will accept mediocrity, or worse. One bad apple, etc... It pollutes the entire atmosphere.

It's better to fire them now, even if everyone else has to work harder, than it is to keep them around and spoil everyone else's attitude. And, you will feel a whole lot better as soon as you have done it. They will too! They know it's coming, they just don't know when, right? In fact, most "exit interviews" I have done were no surprise at all to the person exiting. So what are you waiting for? Fire someone today! Fridays are a perfect day to fire someone!

10 Videos Every Entrepreneur Should Watch

2011-06-06T20:35:00.001-07:00

From Inc. Magazine,

a list of 10 YouTube Videos

Every Entrepreneur Should Watch.

(click here)

My favorites:

1. What Motivates Us

2. Steve Jobs 2005 Stanford Commencement Address

3. Persistence!

4. Ideas That Spread, Win
5. The Social Business Model

And here's a bonus video,

the shortest and best:

Steve Jobs on Why You Need Passion

Gates was SO wrong!

2011-06-05T13:12:00.000-07:00

Apple Is Now Worth More Than Microsoft and Intel Combined

Bill Gates was wrong to underestimate Steve Jobs. In just 12 years, Apple's market value has increased by more than $300 billion.

click here for the full story!

Focus

2011-05-30T20:13:00.000-07:00

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying ‘no’ to 1,000 things.”

- Steve Jobs

(source: Bryce)

"The first requisite of success is the ability to apply your physical and mental energies to one problem without growing weary."

- Thomas Edison

There is no undo button...

2011-05-17T10:05:00.000-07:00

Steve Blank delivered the commencement address at Philadelphia University yesterday. You can probably read it in 5 minutes or less, but it's a powerful message. You might want to share it with some of your up-and-coming entrepreneur friends. Read it here.

Here's how it ends:

Be forever curious.
Volunteer for everything.
Show up a lot.
Treat failure as a learning experience.

Live life with no regrets.
Remembering…There is no undo button.

Bubble?

2011-05-15T16:21:00.000-07:00

Nothing great has ever been built

without irrational exuberance.

Tom Evslin

Logo design from 99designs.com

2011-05-15T12:32:00.000-07:00

In an experiment in delegation, via crowd-sourcing, I checked out 99designs.com to come up with 3 different versions of a logo: for business cards, Pocket Guide, and web. I wanted something that would work on a personal and business level, both aviation and angel investing interests. This is the winning entry (web version) out of the 99 that were submitted. Feedback appreciated...

The process at 99designs.com went smoothly enough. You might want to try it for some of your design needs.

Double M Investments, Inc.

Software Startups

What Angel Investors Look for in a Startup

2011-05-01T21:39:00.000-07:00

Bill Payne is a highly experienced angel investor, and a fellow member of Tech Coast Angels. If you are going to be looking for angel funding for your startup, you'll learn a lot from his very clear and succinct article on the subject:

WHAT DO ANGELS LOOK FOR IN NEW INVESTMENTS?

Angel-Fundable Startup Companies

http://www.flatheadbeacon.com/articles/article/angel-fundable_startup_companies/22578/

Service or Product?

2011-04-26T12:13:00.000-07:00

For an interesting discussion on the relative merits of a product vs. service business, check out Mark Suster's post here. Try to get past the demeaning and inappropriate headline, and the typos, and look for the reality.

Words of Wisdom from Warren

2011-04-23T16:19:00.000-07:00

I am not good at tech matters but I have got a lot of people who are. I don’t have to be smart about everything; I didn’t deliver my wife’s baby! So, I believe in using people who are smarter than I am and it is not very hard to find the number that are and certainly in the tech field. I just don’t have that ability but I am reasonably good at spotting the people who do have that ability. We get the best people, and when you get the best people and you let them go, you get the best result.

Warren Buffet

(source)

Board of Directors vs. Board of Advisors

2011-04-21T12:09:00.000-07:00

Every business should have either a Board of Advisors or a Board of Directors. Period. There is no wiggle room in that statement, except for one thing: If you are running a lifestyle business, or if you're not really serious about succeeding in your business, then... save yourself some trouble and forget about it.

However, if you really want to succeed, and not waste your time, and want to take the shortest path, with the least stress, then get yourself a Board.

What's the difference? A Board of Directors is a legal entity. The Board of Directors is there for the purpose of representing the interests of the shareholders. They hire and fire the CEO, they approve the business plan. If you are the CEO, you want a happy Board of Directors, or else you will not be CEO very long.

A Board of Advisors is for a CEO who owns most, or all of the stock. Such a CEO is not going to be fired by his Board of Advisors, because they have no legal standing, and the CEO can do whatever he wants. His Board of Advisors is there simply for the guidance.

The benefit of having a Board comes from having regularly scheduled meetings, usually once a month in young companies, but as little as once a quarter in mature, profitable, and stable companies. You want your Board to be actively involved in the challenges and plans of your company. That's why you want to meet, formally and regularly.

If you are doing a startup, and going to need some angel and/or VC capital, you have some special considerations. Check out this article for more on that.

And, finally, here's a very good article in INC magazine about some details on setting up boards of advisors/directors.

How VCs evaluate your management team

2011-04-21T11:30:00.000-07:00

If you're going to do a startup, and it's going to need angel or VC money, then YOU (as the CEO) are going to be evaluated as one of the primary elements of success for the business. Here's a short article on how your team will be evaluated: click here.

Mentors, Teachers, Coaches...

2011-04-21T10:57:00.000-07:00

Do you need a mentor, or a teacher, or a coach?
What is the difference?

Steve Blank sets us straight with his insightful post: read it here.

According to his definitions, I serve as a mentor, primarily, but I feel that being a mentor includes elements of coaching and teaching...

Founders as Artists

2011-04-13T22:43:00.000-07:00

Legendary entrepreneur Steve Blank is featured in this brief video clip, discussing how he sees founders as artists. I couldn't agree more... Needless to say, the concept of success in business being both Art and Science has been the topic of this blog for the last 5 years. Maybe Steve finally found my blog!

A Poet's Pithy Perception

2011-04-01T23:18:00.000-07:00

"The heights by great men reached and kept,

were not attained by sudden flight,

but they, while their companions slept,

were toiling upward in the night."

Henry Wadsworth Longfellow

I'm There For You, Baby; The Entrepreneur's Guide to the Galaxy

2011-03-27T01:07:00.000-07:00

Unfortunately, few real entrepreneurs will read this excellent book!

Real entrepreneurs will be too busy starting, building and selling their businesses, then doing it all over again. They don't have time to read books; they're fighting for survival, riches, and Global Domination.

It's unfortunate for them because they could earn the equivalent of a Doctorate degree from the School of Hard Knocks in just a few hours of reading this extraordinarily well written and entertaining story of the adventures of a highly successful serial entrepreneur.

I couldn't put it down. Loved it. Highly recommend it for all future Masters of The Universe.

http://www.amazon.com/There-Baby-Entrepreneur-Guide-Galaxy/dp/0983170428

Angelhood?

2011-03-19T15:24:00.000-07:00

Yesterday I was approved for membership in San Diego Tech Coast Angels. TCA is formed for the purpose of investing in early stage startups. One of my primary purposes of joining was to learn more about how professionals evaluate the potential for success of business ventures.

While I am now a member of the club, I guess I'm not a real "angel" until I actually write a check to invest in one of the startups that have applied to TCA for funding. So far, I participated in 7 "screening sessions" and 3 "post-screening" sessions of different companies who have applied to TCA for funding.

It's quite the intellectually stimulating process! The members are very intelligent and experienced in a wide variety of businesses.

As a member, one of my responsibilities is to be on the lookout for startups that would be appealing investments for TCA. So if you are, or know of, a startup that would like to apply, please let me know!

IdeaGrinder™ - solving the world's problems, one at a time...

2011-03-17T21:08:00.000-07:00

IdeaGrinder ™

solving the world's problems, one at a time...

Got a great idea? Run it through IdeaGrinder for a second opinion. It could save you a lot of time and money, or it could give you the Green Light. Privacy assured.

Free unlimited use for individuals. Business versions are $4.99 per use.

This version of IdeaGrinder (A-2.2), is designed tor the professional "angel" investor who must make quick investment decisions from among multiple and varied businesses that continue to evolve.

It's smart to run your options through IdeaGrinder!

Other versions are available for the startup entrepreneur, the VC, bank, broker, and many other vertical markets.

IdeaGrinder is browser based and runs now on PC and Mac, iPad, and even iPhone and Android. Multiple users can share the same IdeaGrinder document for only slightly more.

Current IdeaGrinder versions and pricing plans are available at http://IdeaGrinder.com

IdeaGrinder is in beta. We're focused, determined and adequately funded. It's a sure formula for success! (We ran it through IdeaGrinder!)

Continued after this:

------ advertisement------
Wanted: software geniuses who are motivated by greatness and stock options.

Call 858-523-8811
Email: fastmikie@gmail.com
====================

This is another fine product brought to you by The Art and Science of Success in Business, in Del Mar, CA. (artscibiz.com)

Coming soon:
Network effects database -continuously improves the value of IdeaGrinder to the ever-growing community of users ("IdeaGrinders").

Other opportunities available with IdeaGrinder:
Advertising
Editorial content
Private Label Branding
Co-development

IdeaGrinder™ - The Startup Opportunity Analyzer

2011-03-16T09:53:00.000-07:00

I have for some time been impressed with the absence of any generally available system for evaluating the potential success of a business. There are people who spend a lot of time looking at lots of different businesses, and at different stages of development, from startup to mature cash cow or IPO. But there seems to be no system, no organized, structured way of looking at a business.

To complicate this matter of developing a standard System, there are different perspectives of evaluating the potential for success of a business. The startup entrepreneur is different from the 4th generation owner, and they have different views than the early stage angel investor or the series A venture capitalist.

It seems reasonable that professional investors would have a proprietary method, but what about the rest of us? There should be a generalized System...

In 2003, over a series of meetings with good friend Alex Wenz, I developed a simple methodology to choose the best among his surplus of ideas. We looked at the various elements of a business that were important to him, and built a little spreadsheet in Excel, and called it the IdeaGrinder. Recently I ported it to Google Documents (Spreadsheet) and now it is available to a wider audience, not just those who pay Microsoft for Excel.

The design criteria for the IdeaGrinder are as follows:

Intuitive
Simple, easy to use, fast, fun
Helpful, solves a problem
Inexpensive ("Freemium" model)
Social, viral
Secret sauce
Customizable, easily, by user
Browser based, no special software required
Multi-platform (can be used now, as is, on iPhone, Android, iPad, Mac, PC)
Multi-user - can view and update among multiple users simultaneously
Crowd source - collaborative development, none of us is as smart as all of us.

Several different versions are planned:

Student
Startup entrepreneur
Mid stage entrepreneur
Exit track entrepreneur
Serial entrepreneur
Accelerator/Incubator
Manager
Employee
Angel investor
VC
Broker
Banker

Humor may be found in some of these products... no extra cost.

To discuss opportunities to help with development and/or content, please email me.

Living on the edge

2011-03-09T19:51:00.000-08:00

Home.

Home is in Del Mar, a small beachfront village just north of San Diego. Home is filled with the sounds of the surf, the colors of sunset on the Pacific, the view to the far horizon, the fresh seaside air... Home is filled with healthy plants of great variety, splashing fountains, hummingbirds.

Home is planned to perfection, a magical place for business meetings, providing maximum comfort, superior to any restaurant, or meeting room, or coffee shop, or other public place.

Home is Mikie's Fun House.

At the edge of a cliff, at the edge of the sea, at the edge of two tectonic plates, at the edge of mountains and desert, and the open sky above all, it is the meeting of multiple ecosystems. The weather is always great and yet always changing, here at the edge. There is a great energy about this place.

Founder is the toughest, and easiest job

2011-03-08T09:26:00.000-08:00

Founder is the hardest job in the world to be good at,

but it is the easiest job in the world to get –

you just have to start.

SneakerheadVC

To Achieve Great Things...

2011-03-08T08:10:00.000-08:00

‎To achieve great things,

two things are needed:

A plan,

and not quite enough time.

Leonard Bernstein

Twitter bonus...

2011-03-07T19:11:00.000-08:00

The great hidden bonus to using Twitter as one of many channels of communication is that it focuses the mind on abbreviating the message to its core. The more brief the message, the clearer to message can be.

You need to get attention, fill a need, and urge a specific action, and do it in 140 characters or less, probably a good bit less for maximum results.

This is a medium which is ripe with possibility for research.

Rest: A thing done in peace exceeds ten in panic.

2011-03-07T18:38:00.000-08:00

‎Work when there is work to do.

Rest when you are tired.

One thing done in peace will

most likely be better

than ten things done in panic.

I am not a hero if I deny rest;

I am only tired.

Susan McHenry

via Kathleen Shelton

On the challenges of life among the General Population

2011-03-03T10:32:00.000-08:00

Over the past few months I have been getting out of my cave (Mikie's Fun House) and mixing with the General Population in ways not experienced in a long time. Some of the reasons for this include:

1. a modicum of notoriety due to the publishing of my book (The Spirit of Adventure), which has attracted visits from/to fellow aviators

2. new transportation (check it out) that is way more fun than the pickup truck that I was experimenting with for the last year.

3. renewed interest in a couple of stealth-mode startups I have been mulling for some time, which has, remarkably, put me

   a. back in school, at UCSD, to learn about startup financing from highly experienced Venture Capitalists Neil Senturia and Barbary Bry. No one could be more impressed with me than me, who knows me quite well, that I would willingly endure sitting in a room with 30+ students (all geniuses), for 3 hours at a clip, not just one time, but for a schedule of 9 weeks (with perfect attendance no less, and doing ALL my homework). This ends next week, but since I have found the re-education of Mikie to be intellectually stimulating, I am planning on continuing with courses in physics, chemistry, and other subjects I intentionally skipped in college (because my priorities at the time were girls, business startups, girls, cars, and girls).

   b. on the networking circuit, attending "Meetups" of budding entrepreneurs, seminars put on by Venture Capitalists and angel investors

   c. even (gasp!) joining various groups in the VC and angel communities.

It may seem to those who have known me for many years that I have taken leave of my senses, but in fact these behaviors are simply evidence of being highly motivated.

However, because of the Law of Cause and Effect, there is a dark side to all of this public life stuff:

1. The first thing to go is my highly treasured solitude, of course. Rather, my many hours of solitude have been dramatically reduced, and therefore my time for yoga, meditation, writing, reading, and breathing have all been reduced.

2. Exercise has been reduced. It was already at a minimum, so any reduction is unacceptable.

3. Food quality has been reduced. While I still have the same vegan cook (and have for the past 26 years), I have taken more breakfast, lunch and dinner meetings and therefore consume the less than ideal meals found in public places. Additionally, I am exposed to more impulse foods during meetings at Starbucks, etc.

4. The results of the above have been to increase my weight and metabolic age somewhat, and a general decline in muscle tone. Not a dramatic change in these areas, but changes nevertheless.

5. Slight increase in stress due to a busy schedule. My stress levels have been at or near zero for years!

So, the challenges are there, but as I am fond of saying: "It's not what happens to you, it's what you do about it that counts." Well, the first step is in recognizing the situation for what it is. Next is to reaffirm my overall goal of radiant good health. And then, of course to create a Plan of Action, and execute. (Think-Plan-Do-Repeat).

I am a master at creating Perfect Days, one at a time, and I will continue to focus on that.

A girl in a convertible is worth 5 in the phone book

2011-02-27T11:17:00.000-08:00

You gotta love Warren Buffett. His latest letter to shareholders of Berkshire has been published. Among many of the great lines he has written in his 46 years of stewardship, one of his best appeared in this latest letter: "A girl in a convertible is worth five in the phone book."

Here are a couple of other clever bits:
"We would rather be approximately right than precisely wrong."

"John Kenneth Galbraith once slyly observed that economists were most economical with ideas: They made the ones learned in graduate school last a lifetime."

"The fundamental principle of auto racing is that to finish first, you must first finish."

"Unquestionably, some people have become very rich through the use of borrowed money. However, that’s also been a way to get very poor. When leverage works, it magnifies your gains. Your spouse thinks you’re clever, and your neighbors get envious. But leverage is addictive. Once having profited from its wonders, very few people retreat to more conservative practices. And as we all learned in third grade – and some relearned in 2008 – any series of positive numbers, however impressive the numbers may be, evaporates when multiplied by a single zero. History tells us that leverage all too often produces zeroes, even when it is employed by very smart people. Leverage, of course, can be lethal to businesses as well."

"We agree with investment writer Ray DeVoe’s observation, 'More money has been lost reaching for yield than at the point of a gun'.”

"Anyone who says money can’t buy happiness simply hasn’t learned where to shop."

And, finally, he thanks his corporate office crew of only 20 people ("and we intend to keep it that way"), who among many other tasks "files a 14,097-page Federal income tax return".

Yikes!

Reading the full report is something most smart investors look forward to all year. Me too.

And if you haven't visited it yet, check out the Berkshire Hathaway website home page. It's a masterpiece of understatement!

Hockey Sticks in the Real World

2011-02-26T11:58:00.000-08:00

Published in the Wall Street Journal Venture Capital Dispatch. Inspiration for all...

But, as the article says, the big question is: "Is it sustainable?"

Fast

2011-02-17T19:04:00.000-08:00

Fast is fine, but accuracy is everything.

Wyatt Earp

Tax notes

2011-02-17T10:27:00.000-08:00

Tax evasion is a federal offense.

Tax avoidance is not.

Competent counsel is needed to stay out of jail

and yet optimize savings.

Choose your counsel carefully.

Personal freedom hangs in the balance.

(see commandment #9)

Holy S#!t, My Idea Sucks!

2011-02-14T10:54:00.000-08:00

This just in from San Diego StartupDigest:

Founder's Note: We have partnered up with the Founder Institute to get you free access to their "Startup and Go" program.

The program is a 6-part course on ideation, startup research, and co-founders taught by Aaron Patzer (Mint), Jonathan Abrams (Friendster), Phil Libin (Evernote), and Adeo Ressi.

This content has never before been available to anyone outside of Founder Institute, but every StartupDigest member can now access it for free. Just use the secret code "StartupDigest" here.

Salty language, but the facts are right on.

What is the role of the CEO?

2011-02-09T16:16:00.000-08:00

In one of the better posts ever posted, it is revealed that the role of the CEO is as follows:

A CEO does only four things:

1. Sets the overall vision and strategy of the company and communicates it to all stakeholders.
2. Recruits, hires, and retains the very best talent for the company.
3. Makes sure there is always enough cash in the bank.
4. Delegates all other tasks to his or her team.

Here is the link to the full post:
http://www.avc.com/a_vc/2010/08/what-a-ceo-does.html

Balance, anyone?

2011-02-09T11:43:00.000-08:00

Work-life balance, says Nigel Marsh, is too important to be left in the hands of your employer. At TEDxSydney, Marsh lays out an ideal day balanced between family time, personal time and productivity -- and offers some stirring encouragement to make it happen. http://www.ted.com/talks/nigel_marsh_how_to_make_work_life_balance_work.html

What do people want? (Entrepreneurs as Leaders)

2011-02-07T07:47:00.000-08:00

To get your week started off well, consider this age-old question:

What do people want?

In this case, "people" refers to "employees" or the even more objectionable terms "subordinates" or "followers". (I prefer "team members" or "associates" when referring to the people in the entrepreneurial organization.)

Without further delay, the answer to the question:

Dr Ludi Beukman, HR development specialist at Softline VIP which is part of Sage Group plc, says that managers simply cannot ignore the importance of effective leadership in facing the challenges of a fast and ever-changing business environment.

People want to feel good about themselves and the work they do. This means that they have a need for finding meaning in their work through deriving a sense of personal identity from doing what they do and doing it well.
People want to be successful. They do their best when they have the experience of making a valuable contribution to the organisation. They want to enjoy a sense of control over their work. This is gained through the incorporation of their ideas and feelings into the design and procedures governing the work they do and when they feel responsible for accomplishing the objectives of the organisation.
People do their best when they are allowed to collaborate. They are willing to show extra effort when their own needs and objectives are met by achieving those of the organisation and when it is done through problem-solving processes where all contribute to and participate in generating solutions.
People do not want to make mistakes. Yet, they do make mistakes. These should always be regarded as part of the developmental and learning process.
People can and want to do what needs to be done… IF their leaders create the organisational conditions for them to do so. Subordinates inherently have both the willingness and potential to be empowered to do their work with competence and pride.
All people have the inherent potential to be creative. The leader’s role in improving performance is to eliminate the unnecessary interferences so that followers’ potential can be optimally unleashed.

The link to the entire article is here.

Lucky? Well, Yes and No...

2011-01-31T20:43:00.000-08:00

In a time long ago, about 2000 years ago actually, a Roman philosopher named Seneca thought deeply on the subject of Luck, and he came up with this clear and concise summary:

"Luck is what happens when

Preparation meets Opportunity"

Allow me a moment of your time to share a brief story that illustrates this quite well. It happened to me just last Monday...

I was attending an early morning breakfast meeting of the San Diego Venture Group. A panel of Venture Capitalists was chosen to discuss the outlook for funding startups and early stage companies. It's a topic that fascinates me, so I made an exception to my long-standing schedule which reserves all mornings until noon, for ME. This means, above all else, quiet time, no phones, no meetings, nothing planned, no contact with the outside world. I usually read, write, meditate, exercise, etc. But every once in a while, very rarely, something comes along that will be just so outstanding an Opportunity that I break out of my committed routine. This was just such an occasion.

I'm milling about in a room of about 400 people, give or take a few multi-millionaires, and as usual, I know nobody, but I take a seat at a table up front because it's easier to see and hear what's going on. The table seats about 8, and several seats are already taken. I could have chosen any of several tables, but for some reason I focused on a silver haired gentleman, already seated. He caught my attention because he was obviously not like the other people in the room. He wasn't wearing a suit, not even sport jacket; not the "business casual" that is recommended for these elite functions. Sure, I'd like to sit next to Bill Gates, but since I didn't see him there, and breakfast was being served, I figured: What the heck, this guy is either in the wrong room, or he's a rebel, a non-conformist just like me. In either case, it might be interesting...

I sit, I introduce myself, which is the politically correct thing to do, and right off I learn that he is Bradley J. Fikes, of the North County Times, and he is here covering the event. Well, of course I mention that the North County Times is one of my favorite newspapers, because I do live in North County, and then almost as a reflex I reach into my pocket for the Pocket Guide for Entrepreneurs: Ten Principles for Managing a Young, Growing Business. It's a little something I put together a few months ago, a nice little booklet of only 28 pages. Just a trinket, really, but it looks reasonably good for the prototype that it is. It's designed to be an order of magnitude better than a business card; something people will remember, and get involved with. Not easily filed away, not easily discarded...

Before I left home I put two copies in my shirt pocket, just in case I met someone who might be a worthy recipient. That was the Preparation. And this was the moment when Preparation met Opportunity. Luck!

The result of this was that Bradley J. Fikes wrote his story in the North County Times, a short piece about the state of Venture Capital, and went on to mention the fellow he happened to sit next to at breakfast (yours truly) and the Pocket Guide for Entrepreneurs, and even quoted two of the Principles contained therein (#1 Think Straight and #8 Let There Be Cash) and even gave his readers my website address! You can read the story here: http://bit.ly/ftQgkJ

What is interesting to me is that Mr. Fikes did not contact me about the article, and I would never have known about it at all if it were not for something I did several years ago. I set up a Google Alert with a search term of my name. It's a free service that Alerts me anytime the term Michael McCafferty pops up on the World Wide Web. Of course, there are other people with my name, including the one who also appeared in the alert, a fellow in England who was arrested for house burglary, but that's another story. I doubt if he uses Google Alerts on his name.

Of course, I would never have known about the story if it were not for the Preparation I did several years before the Opportunity. More Luck!

How Prepared are you when Opportunity presents itself?

As a reward for reading this far, I'll send you a free copy of my now-newsworthy Pocket Guide for Entrepreneurs, just for sending me your mailing address in an email to fastmikie@gmail.com

The Secret of Those Who Amaze The World

2011-01-22T16:14:00.000-08:00

The secret of those who amaze the world

is that they regard nothing as impossible.

Henry David Thoreau

80% Of Success is Showing Up

2011-01-21T11:06:00.000-08:00

I had not been planning on entering it, and I felt rotten when I woke up the morning of the Big Quarterly 8-ball Tournament. I didn't get much sleep at all. I was listless, and unfocused, and when I tried to hit a few on my table, every shot missed by a mile. My vision was fuzzy. I figured there was no way I was going to win the tournament, so why even show up for it?

But, the deciding factor was that I kinda missed hanging with the guys who frequent the room; I hadn't competed in this tournament since I won it 9 months ago. That was the second time I won it, so I have been staying away in order to not wear out my welcome.

So, with my fuzzy vision, and well over 2 years of not practicing at all, this was a good opportunity to show up and let them beat up on me, and we can all have some good fun, and then the Next time I'll try for the 3-peat. This was my humble plan.

Strangely, I won it anyway. I wasn't happy with my game at all. I missed some shots that were inexcusable, giving my opponents many opportunities. I lost one match to "Lefty" Bob, who won it last quarter. But somehow I just hung in there until the end.

So what can you learn from all this? I guess it kinda proves what Woody Allen was saying: "80% of success is showing up". Thanks, Woody!

Top Ten VC Blogs

2011-01-20T18:14:00.000-08:00

According to a story in the Wall Street Journal blog "Venture Capital Dispatch", the top ten Venture Capital blogs are listed below (numbers in parentheses are the unique visitors per month, and bold if it is an increase):

Paul Graham, YCombinator, Essays (97,227)
Fred Wilson, Union Square Ventures, A VC (81,483)
Mark Suster, GRP Partners, Both Sides of the Table (53,655)
Brad Feld, Foundry Group, Feld Thoughts (38,821)
Chris Dixon, Founder Collective, cdixon.org (20,988)
Charlie O’Donnell, First Round Capital, This is Going to be Big (13,970)
Larry Cheng, Volition Capital, Thinking About Thinking (13,215)
Dave McClure, Founders Fund, Master of 500 Hats (11,127)
Ben Horowitz, Andreesen Horowitz, Ben’s Blog (10,686)
Jeremy Liew, Lightspeed Ventures Partners, LSVP (9,344)

The #1 Mistake CEOs Make

2011-01-19T13:58:00.000-08:00

By far, the number one mistake CEOs make is "waiting too long to (whatever)". This is the answer given by 80% of those interviewed.* This amplifies my previous post about "not taking action". Now that you have learned this most important fact, DO SOMETHING! That's your job, right? Chief EXECUTIVE Officer. Executive means to "execute". That's another word for Do.

The way I see it, we learn nothing by doing nothing. It is only by taking Action that we learn something. We learn that the results of our actions are either good or bad. If the results are bad, then we need to take Action again, quickly, until we get the good results we want. But "waiting too long" is a prescription for mediocrity, and possibly even extinction.

*The source for this statistic is the instructor in my class on Entrepreneurship at UCSD. He's a Venture Capitalist. He should know.

5 Mistakes Entrepreneurs Make When Getting Mentored

2011-01-10T08:45:00.000-08:00

Something to remember when looking for help from a mentor, from GigaOm:

5 Mistakes Entrepreneurs Make

When Getting Mentored

And while I'm thinking of it,

I would add at least one more mistake:

Not taking Action!

Entrepreneurship is like Pornography...

2011-01-08T11:57:00.000-08:00

"I can't define it, but I know it when I see it." In 1964 Supreme Court Justice Potter Stewart wrote words to that effect when he tried to define pornography/obscenity.

If you had asked me yesterday how to define Entrepreneurship, I would probably have given you a similar answer, but today I have it down cold.

Entrepreneurship is "the pursuit of opportunity" according to "New Business Ventures and The Entrepreneur" (sixth edition). That's the textbook for the class I'm taking at UCSD starting next week.

Can you believe it? I'm going back to school, at the age of 68, to learn what it is that I have been doing for the last 50+ years. For me, it was just some natural bodily function; I was just doing what came naturally, and now I learn that there's actually a methodology, a System for being an Entrepreneur. I just can not pass up this opportunity, so I'm going back to school. Probably be the oldest guy in the class!

I am going to try mightily to NOT say to fellow students: "I was starting businesses before you were born... heck, I was starting businesses before your *parents* were born!"

Wish me luck...

A Simple System for Success

2011-01-03T15:37:00.000-08:00

Looking for success in the new year?

This is the simplest system yet devised by man (me).

It is free, and guaranteed to work,

but you must follow this fiendishly simple plan!

Think - Plan - Do - Repeat

Failure?

2010-12-31T11:21:00.000-08:00

Setbacks are not failure,

they're feedback.

It's data.

Bill Gates

"At some point, every great company was a dumb idea"

2010-12-26T23:40:00.000-08:00

That very refreshing bit of wisdom comes from a very successful VC Bryce Roberts, in this blog post. So the next time someone tells you how dumb your idea is, re-read his post!

What went wrong? Why did it fail?

2010-12-26T22:55:00.000-08:00

Sometimes, you can learn more from "failure" than from success. Wouldn't it be great to know why things didn't work, but without all the time and money lost?

The creators of no-longer-with-us web products explain what went wrong in this blog post by 37Signals.

Straight talk from a Protégé

2010-12-22T19:20:00.000-08:00

I was having a friendly lunch with a former Protégé a few days ago, and she mentioned that she attributed her success with achieving a major priority of hers was because she just did what I suggested.

I took the opportunity of her kind words to ask if there were just one thing she would suggest to me that would help me be a better mentor. She thought for a moment, but not overly long, and said "Don't overload the Protégé." We talked on that for a bit, and she felt that there was too much to do, or too little time to do it, or both.

Fair enough. I guess that's my impatience coming through. And it resonates with another Protégé who was also feeling rushed with our weekly meetings, and wanted to have them half as frequently.

What I'm finding is that regardless of the frequency of the meetings there will always be more to do than you have time to do it. The purpose of the meetings is to stay on course, to stay focused on the priorities, and to take action.

The feeling of being overloaded is similar to the feeling of vertigo when you look down the mountain. When you change where you look, the vertigo goes away. You will feel overloaded if you look too far down your list of priorities, at the infinite number of things you can think of that need to be done. This feeling of being overloaded will evaporate immediately if you simply focus on the number 1 priority on your list. You can't possibly feel overloaded if you are taking care of your number one priority.

This way, you will always be doing the most important thing.

Straight talk to a Protégé

2010-12-22T13:53:00.000-08:00

What should the mentor do when the Protégé doesn't do what the mentor advises?

I have been dealing with that issue and have come to the conclusion that some people move faster than others, and that I need to show patience, which is not one of my great assets.

How long should I repeat my advice and exercise patience before I give up on the Protégé and move on to help someone who does take action? That's a judgement call, but I'm thinking that a year is plenty of time, and if after a year the Protégé still doesn't get it, there is something basic going wrong and I must not understand it but since my best advice isn't being taken then I'm wasting my time and the Protégé's time (and money). It should be time for the Protégé to get another mentor, or go it alone.

I never liked firing a customer who pays right on time and treats me right in every other regard, but I'm not in this for the money, only to see results. If there are no results, then it's not fun for me, so I should move on. I figure I do owe the Protégé a final meeting where the options are discussed, and then at most a few more weeks to see if anything is going to change, but then if there are no changes, it's time to move on...

I would never reveal the identity of a Protégé without his/her permission (it's sort of like a doctor/patient confidentiality thing). However, I can speak in broad terms about the nature of the situation and the advice, which I feel is of the most essential importance. Here is my last written correspondence on the matter:

Here are the priorities the way I see them:

1. Increase profitability.

a. increase prices - if you have a question about an item, or group of items, then just write it down on a separate list and continue with the price increases that you can do right now.

b. advertise - spend money on ad words where you can prove that it is worth the investment. do not spend a penny on ad words if you can not track the investment and know that it is worth while.

c. increase sales to existing customers:

- have your customer care reps up-sell on all current orders

- have customer care reps call past customers who have not purchased recently.

d. decrease costs - review purchasing policies, establish systems for optimum order points and order quantities.

There is no # 2 priority, just #1.

Do 1a first, then move on to 1b, and when 1b is done, then do 1c.

When you have finished with the above priority list, then you should be in good shape,

and can focus on whatever is next.

If your sales for the year will be 1.5 million, and you could have raised your prices 8% at the beginning of the year, as planned, then 8% of 1.5 million is $120,000 in profits ON THE BOTTOM LINE, that you have thrown away by not taking action. Every month you delay the price increases, you throw another $10,000 away, and you seriously endanger the existence of your company and your personal and family financial strength and success.

There is only one thing that matters in this world, and that is ACTION. It is irrelevant what we think, or what we plan, or intend, or hope, or want, the only thing that matters, or will ever matter, is what we actually DO.

Do not fear that you will take the wrong action. You are smart and have experience with your business. It is unlikely that you will take the wrong action. It is highly probable that you will take the right action. If you take action, you learn something. If you take no action, you learn nothing.

If you take action, and you learn that the action is wrong, you can stop, or change your action based on what you have learned. Taking action is done in steps, as you have learned in Principle #10: Test. This limits the downside of your actions, and optimizes the upside.

Be Bold. Take action now!

Need money for startup? Check this success story!

2010-12-20T08:39:00.000-08:00

Great story:

This design shop only wanted $15,000 to get a new product going (touch screen watch made from new iPod nano), so they put the idea up on Kickstarter.com and they got almost a MILLION BUCKS!

Check out the story, and the neat product here.

List of Incubators & Accelerators (like Ycombinator)

2010-12-19T12:26:00.000-08:00

Check out the list of startup incubators put together by Launch.is (Jason Calacanis).

Why Work Doesn't Happen At Work

2010-12-02T10:24:00.000-08:00

On the nature of work, and why work doesn't happen at work. This TED video by Jason Fried hits the mark. Check it out:

Now Available: Pocket Guide for Entrepreneurs

2010-11-30T16:53:00.000-08:00

The timeless wisdom in this booklet was first printed 27 years ago on a large poster. Now available for the first time in this high quality pocket version, with additional material for the motivated entrepreneur.

Free copy to the first 10 people who request it via email to FastMikie@Gmail.com

These Ten Principles were published in 1983 as a large (11"x17") poster, suitable for framing. At first, only 100 copies were printed, and they figured prominently in the startup and subsequent success of my software business. Over the years, several thousands of these posters were given to friends, suppliers, customers, and employees.

Now, for the first time, the wisdom of the Ten Principles is available in a pocket-sized booklet. Today I picked up the first 100 copies from the printer. This newly updated version commemorates that first poster and signals the beginning of a new business adventure.

StartupDigest University announces first course

2010-11-29T19:13:00.000-08:00

StartupDigest is doing a great job. Here's the latest announcement from them:

You can now register for StartupDigest University's first course

We started StartupDigest University back in September to capture Silicon Valley’s knowledge about building a great startup and spread it to every startup community around the world.

We’re proud to announce that you can now register for our first course, a seven-part series on raising capital for your startup on Udemy! Here is exactly what you get with the course:

- Access to seven 45-minute tactical videos (the first three classes are already up) on fundraising.

- Each video is an in-depth class on a specific part of fundraising, like what you need before fundraising, how to get intros to investors and building a killer pitch deck.

- Classes taught by handpicked professors, including Naval Ravikant (Venture Hacks and AngelList), Dave McClure, Adeo Ressi (Founder Institute), and more.

- Sample pitches, real investor emails, and example decks to go along with the videos.

- Regular updates to the course with more material and content based on your questions and suggestions.

Register for all 7 classes for only $29 here.

I checked out the first video (Raising Capital for Startups) and it is, in a word, EXCELLENT. The first video is free, the entire course 29 bucks. How can you go wrong?

How great leaders inspire action

2010-11-24T17:40:00.001-08:00

Khan Academy, an Entrepreneur's Dream

2010-11-20T10:44:00.000-08:00

Khan Academy (http://www.khanacademy.org/) is an excellent resource for quickly learning what you need to know. It's free, online, and learn at your own pace, own time. Salman Khan is the genius/faculty and idea guy.

He is "Bill Gates favorite teacher", and funded by Google, Gates, and others. This can only get lots better!
Check out the video interview with the founder on This Week In Startups.
Go to Khan Academy and check out these Entrepreneur topics (more being added all the time):
Venture Capital and Capital Markets Raising money for a startup Getting a seed round from a VC Going back to the till: Series B An IPO More on IPOs Equity vs. Debt Bonds vs. Stocks Chapter 7: Bankruptcy Liquidation Chapter 11: Bankruptcy Restructuring
Valuation and Investing Price and Market Capitalization Introduction to the Income Statement Earnings and EPS Introduction to the Price-to-Earnings Ratio P/E Discussion ROA Discussion 1 ROA Discussion 2 Depreciation Amortization P/E Conundrum Enterprise Value EBITDA
Additionally, there are tons of videos on math, statistics, chemistry, banking, history, finance, biology, the bailout, and more...

Enthusiasm!

2010-11-19T07:06:00.000-08:00

"Every memorable act in the history of the world is a triumph of enthusiasm. Nothing great was ever achieved without it because it gives any challenge or any occupation, no matter how frightening or difficult, a new meaning. Without enthusiasm you are doomed to a life of mediocrity but with it you can accomplish miracles."

Og Mandino

Pocket Guide for Entrepreneurs

2010-11-14T08:31:00.000-08:00

Soon to be published, this truly pocket-sized (3x5") guide features the content you've grown to love in the poster-sized (11x17") Ten Commandments of Managing a Young Growing Business.
Over the last 30 years, the big poster has graced tens of thousands of office walls, but entrepreneurs are more mobile nowadays so a more portable medium is appropriate.
Now in the hands of the printer.*

*Electronic Printing Solutions

Ten Principles for Managing a Young Growing Business

2010-11-14T07:18:00.000-08:00

I. Think Straight

Maintain a detached point of view. Managing a growing business requires unyielding dedication that can consume the body, impair the senses and warp the mind. Such effects are harmful to the individual and the enterprise. Clinical objectivity is the only preventative. Growth implies and entails risk. Risk begets failures as well as successes. Wide perspective gained through nonbusiness experience or study helps one endure the pressures and accept with equanimity the results, good and bad, of business decisions.

II. Travel Light

Limit the number of primary participants to people who can consciously agree upon and contribute directly to that that the enterprise is to accomplish. There are many reasons people become involved in young, growing companies as owners, investors, or key employees. The broad range of satisfaction sought runs from an opportunity to personal expression on one end of the spectrum to capital gains on the other. Unless there is compatibility between what each primary participant wants out of the business, debilitating conflict is likely to ensue. The process of trying to consciously agree on the purpose of the enterprise is often difficult and revealing.

III. The Customer is King

Define the business of the enterprise in terms of what is to be bought, precisely by whom, and why. Businesses are organs of society that perform tasks associated with providing most goods and services the public decides it wants. Under the capitalistic system, a business can prosper to the extent it performs its particular tasks effectively and efficiently. The nature of the tasks to be performed usually changes over time as those served change. The successful company predicts and responds to the needs of its chosen customers. Customers, therefore define the business. At all times, some customers are growing in their ability to buy, others are declining. The astute manager ascertains which is which.

IV. Write It Down

Prepare and work from a written plan that shows who does what, by when. Until committed to paper, intentions are seeds without soil, sails without wind, mere wishes that render communication within an organization inefficient, understanding uncertain, feedback inaccurate, and execution sporadic. Without execution, there is no payoff. The process of committing plans to paper is easy to postpone under the press of day-to-day events. In the absence of a document, fully coordinated usage of the resources of the business is unlikely. Each participant travels along a different route toward a destination of his or her own choosing. Decisions are made independently, without a map. Time is lost, energy squandered. Do it, Document it, Delegate it.

V. Hire Experience

Employ key people with proven records of success at doing what needs to be done. People do what they like, they like what they know. Experience adds depth to knowledge. The best indicator of how a person will perform in the future is how he or she has done in the past in the same or related activity. Criteria for selecting key people is dictated by the plans, the blueprints for the business. The plans reflect the operational objectives and the intentions of the primary participants. The interest and capabilities of a new person must harmonize with both. If experience is not required, hire Attitude. Hire slow, fire fast.

VI. Motivate

Reward individual performance that exceeds agreed upon standards. Performance above the perfunctory level is a discretionary matter for each employee. Most people have alternative off-the-job ways of using excess energy or talent. Channeling such excess into activity beneficial to the business requires a tailored approach to each individual. A manager must first insure that there is understanding of the minimum results to be achieved. Then, for performance above the minimums, forms of compensation important to the performer - or in some cases, teams of performers - must be used.

VII. Conserve Energy

Concentrate all available resources on accomplishing two or three specific operational objectives within a given time period. Enterprises have finite resources. A smaller company achieves competitive advantage when playing for limited, explicit gains in a marketplace of its own choosing. Specialization breeds an organization sensitive to opportunities and quick to act. But any advantage withers if follow through is weak. It will be weak if resources are dissipated. Resource dilution is a sure formula for mediocrity, a state of being that aspiring growth businesses cannot afford.

VIII. Let There Be Cash

Project, monitor, and conserve cash and credit capability. Cash flow is the blood of a growth business. A company's ability to continue is determined daily, not at year end, by the contents of the checking account rather than the financial statement. Keeping money in hand or readily available for both planned and unplanned events is not only prudent but necessary in unsettled times. Cultivation of financial sources is an enduring duty.

IX. Be Not Greedy

Expand methodically from a profitable base toward a balanced business. Optimism is both the poison and the antidote of the growth company manager. It may be possible to accomplish all things, but not simultaneously. With limited resources, sequential growth over time is the judicious prescription for prosperity. Seek logical, incremental extensions of existing activities, but avoid a growth for growth's sake psychology. Bigger is not automatically better; more is not necessarily merrier. Make managing a competitive advantage. Increase customer dependency on the enterprise.

X. Test

Anticipate incessant external change by continuously testing adopted business plans for their consistency with the realities of the world marketplace. The past will not come again. Neither isolation nor insulation from tomorrow is possible. The problems of the times are the opportunities of the times, as always. If you can't measure it, you can't manage it.

Now available in handy Pocket Guide.

Complimentary copy to those who "Follow" this blog.

Testimonials: What other people say...

2010-11-14T00:08:00.000-08:00

From time to time, unsolicited testimonials filter in. The words are nice to hear, and remind me that I have done some good in the world, and that gives me the encouragement to continue to do good. Here are a few of the things that people have said, and given permission for me to go public with their words:
When I started my firm in 1986 I didn't have a PC, I kept my client information on index cards in shoe boxes. When I found TeleMagic my company was catapulted forward.. I must have been one of your first year clients...

TeleMagic is what drove our sales from nothing to 20 Million plus.
No words will ever do that program's power justice, but regardless I'm glad to be able to share my experience.

Von Bedikian, President GBH Communications, Glendale CA (via email)

Wow, now that I am consciously thinking about what we WANT to do as a company vs. what we CURRENTLY do, I see how I got into this mess. The requests for my time are endless and many of them serve the client but not my business. Now I understand the value and importance of focus in a whole new way. Thank you for that.

Kirk Ranta, Ranta Consulting, Inc., La Mesa, CA (via email)

“There is one word to describe MM: Visionary. He has the ability to see the future, and to inspire people to achieve it.”
Jeremy Heyman (via LinkedIn)

I first found TeleMagic in the early 90's and continued to use the product until I sold my company about 4 years ago. We used the software to invoice over 60,000 customers every month. Now as I begin a new business, I started searching for TM and ran across your story. I found it quite fascinating and didn't stop reading until I finished it, inspired and refreshed. Your story reminded me that it is not how many times we get knocked down, but rather the number of times that we get up. Thanks for the inspiration.

Randell Brooks, Dallas, TX (via Guestbook)

I just wanted to say I still use TeleMagic for DOS every day on my mini-network at home telemarketing. TeleMagic is a fabulous product. Thank you for creating it!

Paul Faulkner, England (via Guestbook)

“Over the decades (yes!) that I've known and worked with Michael, I've found him to be consistently brilliant, always eager to found his opinions on flawless logic, and absolutely honorable. This is a guy with extraordinary vision, who is also grounded in reality. He's a big thinker, and I'd bet on him every time. I write books on marketing and communications. Michael PRACTICES them daily.”

George Walther (via LinkedIn)

“Over a 4 year period of working with Michael McCafferty I found him to be an exceptionally talented business owner. He consistently demonstrated an uncanny insight in what features customers would find valuable. He was a great motivator of his employees and sales agents and quite frankly one of the best salespeople I have ever met.”

KC Truby, Wyoming (via LinkedIn)

The 18 Mistakes That Kill Startups

2010-10-20T16:56:00.000-07:00

Some quality reading:
The 18 Mistakes That Kill Startups
Since I'm so into Startups, the title caught my attention, but when I clicked to find the causes for startup failures, the first one on the list was a shocker: "Single Founder". In this context, they are talking about single as in No Partners, not unmarried. I was shocked because my successes have been without partners, so I guess there's hope for you lone entrepreneurs!
Check out Paul Graham's other essays on startups, here.

Looking for a Mentor / Advisor?

2010-10-20T16:42:00.000-07:00

I just got an email from a startup who got my name from a spreadsheet he got online. That seemed curious to me, so I asked for more information about this spreadsheet.
Click here for list of Mentors - Advisors
Notice that there is nothing to indicate who is the owner, or author of this list. Additionally, there is nothing to indicate how these people were chosen to appear on this list. Most curious, indeed. And yet, there I am! Along with another 50 +/- names from all over the world.
And then, I remember, vaguely, being on the Ycombinator Hacker News site, and noticed a post about mentor/advisors and I filled out a survey form. And here's my contact info, in a database that I can't edit!
There are a lot of lessons to be learned from this experience. Not the least of these lessons is that "It Pays To Advertise". But then, that's something Google has been proving all along.

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Top 5 Reasons Why Salespeople Fail

2010-10-13T08:58:00.000-07:00

Having a quality sales force in place is essential to the success of most businesses. Why do some salespeople succeed and others fail? Here is a list of the top five reasons some salespeople fail.

1. Most salespeople spend too much of their time selling with prospects who will not buy. It is important to prospect efficiently and effectively.

2. They don't have a consistent sales process. Do you treat each sale differently? It is important to have a sales process that you use with all your prospects and customers. Use a sales process that has the highest probability of producing high closing rates on all your prospects. This way your results won't be hit or miss.

3. Many salespeople don't spend enough time building trust. Prospects want to purchase something from someone they can trust and respect. Build a trusting relationship with your prospect from the beginning.

4. Most salespeople close at the end of their sales process. Top salespeople start closing at the beginning of their sales cycle and continue to close throughout the process.

5. Most sales people do presentations about their product and company rather than determining the real need of their prospect. This will make your prospect feel neglected.

source: http://www.rbdata.com/ (check it out!)

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Why Wesabe Lost To Mint

2010-10-03T18:02:00.000-07:00

In 2007, two startups launched to create a better "Personal Finance" solution to be delivered over the web.
They were Wesabe, the first to launch, and Mint, which eventually was acquired by Intuit for $170,000,000. Wesabe went belly up.
Why? For some great reading, check out this blog post by the founder of Wesabe, and the CEO who was there right through the end.
It is interesting to note that the reason why Wesabe lost is the same reason why TeleMagic was successful...
For more excellent reading on the subject, written by hacker-types, click here.

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Square!

2010-09-28T21:55:00.000-07:00

"Square"
Check out the new credit card swipe device and app, all free! For iPhone and Android devices. Simplest Point of Sale method to get paid yet devised. Click on https://squareup.com
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Good Management

2010-09-19T10:25:00.000-07:00

Good management is the art of making problems so interesting and their solutions so constructive that everyone wants to get to work and deal with them.
Paul Hawken
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Acres of Diamonds

2010-09-07T22:01:00.000-07:00

"Acres of Diamonds" is the name of a lecture that was delivered more than 6,000 times over the long career of Russell Conwell. It is one of the greatest stories ever told and is just the sort of thing that we all need to hear again and again. Enjoy:
Acres of Diamonds
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Unhappy customers

2010-09-02T16:30:00.000-07:00

"Your most unhappy customers are your greatest source of learning."
Bill Gates

Of course, he ought to know. He had a lot of them.And of course, they are only a source of learningif you actually ASK them WHY.

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Checklists: why you should use them

2010-08-17T18:49:00.000-07:00

I am a firm believer in checklists, both in flying and in business. Managing a successful business is at least as complex as flying a modern airplane. Today, it is THE LAW that commercial and military pilots use checklists because the results of missing something can be disastrous. Do you have checklists in your business?
Here is the story about how the first checklists came into existence:

On October 30, 1935, at Wright Air Field in Dayton, Ohio, the U.S. Army Air Corps held a flight competition for airplane manufacturers bidding to build its next-generation long-range bomber. It wasn't supposed to be much of a competition. In early evaluations, the Boeing Corporation's gleaming aluminum-alloy Model 299 had trounced the designs of Martin and Douglas. Boeing's plane could carry five times as many bombs as the Army had requested; it could fly faster than previous bombers, and almost twice as far.

A Seattle newspaperman who had glimpsed the plane called it the "flying fortress," and the name stuck. The flight "competition," according to the military historian Phillip Meilinger, was regarded as a mere formality. The Army planned to order at least sixty-five of the aircraft.

A small crowd of Army brass and manufacturing executives watched as the Model 299 test plane taxied onto the runway. It was sleek and impressive, with a hundred-and- three-foot wingspan and four engines jutting out from the wings, rather than the usual two. The plane roared down the tarmac, lifted off smoothly and climbed sharply to three hundred feet. Then it stalled, turned on one wing and crashed in a fiery explosion. Two of the five crew members died, including the pilot, Major Ployer P. Hill (thus Hill AFB, Ogden, UT)

An investigation revealed that nothing mechanical had gone wrong. The crash had been due to "pilot error," the report said. Substantially more complex than previous aircraft, the new plane required the pilot to attend to the four engines, a retractable landing gear, new wing flaps, electric trim tabs that needed adjustment to maintain control at different airspeeds, and constant-speed propellers whose pitch had to be regulated with hydraulic controls, among other features.

While doing all this, Hill had forgotten to release a new locking mechanism on the elevator and rudder controls. The Boeing model was deemed, as a newspaper put it, "too much airplane for one man to fly.” The Army Air Corps declared Douglas's smaller design the winner. Boeing nearly went bankrupt.

Still, the Army purchased a few aircraft from Boeing as test planes, and some insiders remained convinced that the aircraft was flyable. So a group of test pilots got together and considered what to do.

They could have required Model 299 pilots to undergo more training. But it was hard to imagine having more experience and expertise than Major Hill, who had been the U.S. Army Air Corps' Chief of Flight Testing. Instead, they came up with an ingeniously simple approach: they created a pilot's checklist, with step-by-step checks for takeoff, flight, landing, and taxiing. Its mere existence indicated how far aeronautics had advanced.

In the early years of flight, getting an aircraft into the air might have been nerve-racking, but it was hardly complex. Using a checklist for takeoff would no more have occurred to a pilot than to a driver backing a car out of the garage... But this new plane was too complicated to be left to the memory of any pilot, however expert.

With the checklist in hand, the pilots went on to fly the Model 299 a total of 18 million miles without one accident. The Army ultimately ordered almost thirteen thousand of the aircraft, which it dubbed the B-17. And, because flying the behemoth was now possible, the Army gained a decisive air advantage in the Second World War which enabled its devastating bombing campaign across Nazi Germany.

(Personal Note: I have flown two different B-17 bombers, and have over a thousand hours flying other aircraft, and I can relate from experience that going flying without a checklist is just plain (plane?) stupid. I wish I had my flying experiences before I had gone into business, as I'm sure my use of checklists from flying would have served me well in my early business experiences.)

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From Homeless to Multimillionaire

2010-08-09T09:31:00.000-07:00

Jerry Chamales' and his rags to riches story. He was one of the early users of my software TeleMagic, and a big fan of the product. He even wanted to work for us and then wanted to buy my company! Check out his story:

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Prepare for the worst, expect the best

2010-08-05T12:08:00.000-07:00

Here are some wise precautions that will prepare you for adversity and ensure your success:

Assume that vendors will be slower than they promise - and that you may have to stand on their heads to get things done (not that you should accept this if it's going on though!)
Assume click prices and advertising rates are going to go UP, not down
Assume Google's gonna slap you sooner or later, even if you've got the most righteous product on God's green earth
Assume your best source of customers could dry up with no advance notice
Assume the buying cycle is longer than you think it is, not shorter
Assume it's gonna get harder to raise capital, not easier
Assume some unforeseen problem, like a product defect, legal challenge or financial setback may pop up
Assume your top 3 plans might not work out, so have #4 and #5 in place too

(from a Perry Marshall email)

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2010-08-01T10:40:00.000-07:00

The
Ten Commandments
for
Managing a Young, Growing Business

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How to start a startup

2010-06-18T19:29:00.000-07:00

How to start a startup
by Y Combinator founder Paul Graham

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Dan Pink on the surprising science of motivation | Video on TED.com

2010-06-18T16:33:00.000-07:00

Dan Pink on the surprising science of motivation | Video on TED.com

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