Startup Disaster Clinkle

Business Insider just released an update on Clinkle, the 3 year old payments app startup with no product and $30 Million invested by big names, the largest seed round in Valley history!

VCs are supposed to be smart, but how smart a move was it to put megabucks into "just another payments app" run by a 22 year old first time founder, manager, CEO, product guy, etc. The website says he's on a 50 year mission. Seriously? No co-founders; only hired-gun outsiders who quit fast at the signs of trouble.  What could go wrong, right?  For the icing on the cake, these smart investors never saw the product that was supposed to be built, only a demo video.  Duh.

It seems that they are having their share of problems. If reading about how screwed up other companies are will help you see how good you have it, then read it here:
http://www.businessinsider.com/inside-story-of-clinkle-2014-4

And for current real-world commentary and answers about how it is possible to bomb so badly, read more on Quora at http://www.quora.com/search?q=clinkle

My guess is that Clinkle will crumple...

What I Wish I Knew...

Business Insider just did a neat bit on "25 Entrepreneurs Reveal What They Wished They Knew Before Their First Startup". This is well worth the read. Check it out now, and then come back to finish the rest of this post...

OK, now let's consider some of the things I wish I knew before I did my first startup, and the second, the third, the fourth, the fifth, etc. It seems there's always more to learn!

If I look back to my last big startup, Landmark National Bank, a collaborative effort with 14 other really excellent business people, the big thing I wish I knew was to stay the hell out of banking! What a miserable business, so many government regulations that bankers are afraid of their shadows and more concerned about their jobs than doing anything truly excellent. Due to some luck and some foresight, I got out without a loss before the big collapse of the financial system, and before the bank was forced to merge into another bank, who was then merged into another. Depositors were fully insured, but today there is no trace of the bank's existence, nor of the investors' money.

But most readers of this post are not going to be entering the banking business, so how about my previous big and successful software startup, TeleMagic, the first CRM product for the PC. I am frequently accused of being the "Father of CRM" or some such title, because I dreamed up, and programmed what would soon have hundreds of competitors in the "contact management" category, then "Customer Relationship Management". At first I had zero competitors, but that didn't last long as it was one of those products that seems so obvious when you look back on it, kind of like the wheel.

Here's what I wish I knew before the TeleMagic adventure:

1. Yoga! The life of a founder/CEO is just about the most stressful thing a person can do, so you need a method to turn off the madness and find peace and quiet, and perspective. Yoga is extraordinarily effective at this. It is great exercise, although it doesn't look like it when you watch it. Yoga is breathing and stretching and Focus. Focus is a key element in any startup. The stress can be a killer, and it was the final straw that lead me to sell the company. Although it was a very rewarding exit, if I could have handled the stress better, I could have stayed around longer and built an ever bigger, more rewarding business on the back of the Internet, which came around only a couple of years later!

2. Board of Advisors. Trying to be the only person with the answers is stupid. There will always be people who have more experience (even though this was about my 6th startup), and a clearer perspective, and who can ask smart questions, provide contacts, etc. One of the best things about enlisting the help of a Board of Advisors is that you get to meet on a regular basis (monthly) and address the key issues of the business and formulate plans for dealing with them. Without a Board of Advisors, the founder/CEO finds it all too easy to be distracted by the "Tyranny of the Idea du Jour" and he/she also has the power to Procrastinate for way too long on important issues. The regular meetings with your Board will serve as a management metronome and add great power beyond what you would expect. This power is often referred to as the "Mastermind Principle" as first discussed in the book "Law of Success" by Napoleon Hill. I finally put together a Board of Advisors only in my final (7th) year of the TeleMagic adventure, and the Board was assembled only for the purpose of positioning the company for sale. It worked perfectly and I feel certain that the sale would not have happened, or happened as well, without their help and perspective.

3. A mentor. Completely different than a Board of Advisors, a mentor is the ultimate resource for a founder/CEO. I never had one during my many startups, and always wish I did. It was a lonely, and highly stressful adventure, and when I finally got on the other side of startups, I resolved to be that mentor to help others going down that path.

There were many other lessons, of course, but these are the ones that come first to mind. Stay tuned for more. That's what this blog is all about...

Again, read the story that started this post:
http://www.businessinsider.com/entrepreneurs-startup-advice-and-lessons-2014-4

Lessons from Shark Tank

Good friend Mitch Russo just posted this excellent article, and I highly recommend it:

http://mitchrusso.com/lessons-from-shark-tank/

Mitch and I both sold our separate software companies to Sage Group Plc at around the same time, and he also now does CEO coaching, so we have some similar experiences, but I think he's a better writer, and I'm sure you'll get a lot from his posts. So, sign up for a free subscription, and tell him FastMikie sent you!

:)

Creativity, by Cleese

This is an excellent talk by comic legend John Cleese on How to Be Creative.  Some of my most treasured principles are mentioned, including Play, Solitude, Reserved Time, Perseverance, the Feedback Loop, and dogged focus on Execution.

Goal Setting Example: Ferrari

One of the more important things a startup CEO can do is to set goals, for the company, for himself, and for each of his immediate team members.  The goals should be achievable, specific, with dates, and should be personalized.

To learn more about Goals, let's take a personal example.  Let's say I want the Ferrari above (I do!):

This is the recently announced 2015 Ferrari California T (twin turbo).  It's very fast and looks great, and I haven't owned a Ferrari for a long time. This model moves me emotionally, so I made it a Goal. I can see myself driving this car. I am committed to owning it as soon as possible. 

There's a built-in limiting factor to owning this car, and that is that Ferrari will not be taking orders for it until "late 2014" and there will be a waiting list so delivery may take a year or more. There is no way of knowing, right now, when mine will be built.  

And that's okay because I still need to figure out how to pay for it. I have already gone through the sofa cushions and every coat and pants pocket and I'm nowhere close to the quarter-million I'm going to need. Again, that's ok too, because Ferrari can't deliver one right now even if I could write a check. I have about a year to put together a plan, and to execute. 

One key aspect of setting Goals, in my experience, is to go public with them. This adds energy to the quest. Keep your goals private and you lose energy; you can always quit with impunity. Tell the world. Be Bold!  

"Whatever you can do, or dream you can, begin it.

Boldness has Genius, Power, and Magic in it.

Begin it Now!"

To do the Bold thing, I have started a blog about this new adventure: 

http://ferraricaliforniat.blogspot.com/

You might want to visit from time to time to see how it's coming along.

The date for achieving this Goal is unknown right now, and it's very important that I get a specific date as soon as possible, which I will get clearer on as Ferrari starts taking orders.  To fulfill the need to be specific, I'll use a placeholder date of September 7, 2015 (my birthday). There Must be a specific deadline.  Deadlines create all sorts of wonderful results.  No deadline; no results.  

"A goal is a dream with a plan and a deadline."  (Harvey MacKay)

I like having a Plan A, and a Plan B.  I'm working on both of those plans now. 

A Goal should also be personalized.  For me, this will be the sixth Ferrari I will have owned in the last 40 years, so I could characterize myself as a Ferrari addict. I have been in remission for about 12 years, since I last owned a 2000 Ferrari 550 Maranello (car history). Bottom line is that I am way overdue for my next Ferrari. Yes, this is a very personal thing for me!

The more specific the Goal is, the better.  To make my goal even more specific, I have already decided it will be blue, with a blue/gray leather interior.  Three out of 5 of my previous Ferraris have been RED, but I was a lot younger then. Nowadays I'm a low-profile kinda guy.  That's not really relevant to this discussion, just that goals need to be specific as possible, down to the smallest possible detail. The clearer the goal, the more likely it will be achieved.

Finally, the most powerful part of achieving your goals is to Commit to it.

"Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative and creation, there is one elementary truth the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one's favor all manner of unforeseen incidents, meetings and material assistance which no man could have dreamed would have come his way. Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it. Begin it now."  (Goethe)

To that end, I have already contacted the Ferrari factory, and the dealer, and registered my intent to buy as soon as they will take my order. Until then I will wait patiently (and execute my plan) until they build it. Fortunately, I can commit to my order with only a small deposit, paying the balance on delivery.

What are your Goals? Are they specific, personal, and with a deadline? Are you committed to achieving them?

Check out 5 principles of Goal Setting, click here.

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Update: Goal achieved. I took delivery of the car on October 2, 2017.  

Bootstrap: Primary Focus: Sales!

A bootstrapped startup is a multitude of constantly changing variables along the path to only one goal: profitability day by day. Without this focus on Sales, it is all too easy to be distracted by one of many other shiny objects that masquerade as Important.

This focus on Sales is necessitated by the decision to Bootstrap the startup as much as possible. The more you bootstrap your startup the less control you give up in the way of equity to investors and others, and the less money you will have when/if you Exit.

The bootstrapping CEO will focus on Sales every day, and will know whether the day's sales will be in the Green, Yellow, or Red.  Sales per day will be posted on a graph by day, week and month.  The CEO will always know the Sales figures.  Per day, week to date, and month to date.

Green: sales are above the Target Sales per day.
Yellow: sales are below Target and above Break Even
Red: sales are below Break Even

If Sales are in the Green zone, you will have the resources to work on other Priorities.

If Sales are in the Yellow zone, you must be working on your plan to get them to Green (hiring additional/replacement sales people, email campaigns, adwords, etc). Other non-sales activities may be done, but only as a second Priority.

If Sales are in the Red zone, all other activities cease and total focus must be put on Sales.

The CEO who gets this will greatly increase probability of success.

On Being a Leader

If your actions inspire others to dream more, learn more, do more and become more, you are a leader.

John Quincy Adams

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If you want to build a ship, don't drum up the men to gather wood, divide the work and give orders. Instead, teach them to yearn for the vast and endless sea.

Antoine de Saint-Exupery