In reading this profile of the artist Rachel Harrison in the 12/22/14 issue of The New Yorker I found many traits that are common among successful entrepreneurs; particularly her focus and mindset. It also reflects the travails she endured and hard work she put in that is similar to the entrepreneur’s path to success; an overnight sensation many years in the making. And, yes, she is my sister.
entrepreneurship
Sticking With What You Love (and Do Best)
Tristan Louis posted a wonderful piece comparing Apple circa 1997 and Puls’ recent launch. Either will.i.am is an astute student of history or he and his team have no sense of history.
While the post cites the eerie parallels, there are two key differences:
1) Apple was around 20 years old when it launched that campaign in 1997 and Jobs came back to save the company; so it had some cache and history. There was an effort to build an expand the company, ideally maintaining cutting edge innovation. As the article inferred, the bigger you get, the harder it is to innovate, be leading edge. You have to buy new ideas while preserving what you have. Institutionalization sets in.
2) I think Puls is a product/business that is being built to be sold (a la Beats). The mindset and preference of will.i.am is to create, build and flip, so he can continually create and not have to worry about maintaining a business long-term; that is not in his DNA.
Which brings me to a key takeaway from the piece – stick with what you love and do best. There are very few people who have the whole package – the dynamic depth of intelligence, managerial skills, business savvy/people skills, product expertise and vision – and the PASSION to take a company from start-up to Fortune 100 company. In this case, will.i.am just wants to create.
More power to him.
RIP, Digital Entrepreneurship 1.0
by Andy Harrison
Fatigue is overtaking the digital startup world. The economy as a whole is cyclical in nature, as is each segment. So why is the tech/start-up/digital space any different? There is product fatigue – a lack of substantive innovation. Only incremental work. Nothing resembling a game changer – nothing new is there – how many more new ad tech algorithms do we really need? There is consumer fatigue (e.g. app downloads are down by up to 25% depending whose research you believe) and device overload. There is investor fatigue – concerns of 1999 – The Sequel.
But as importantly, this fatigue shows that key parts of the startup world are in need of significant overhaul. Yes, it’s Darwinian. But for the start-up ecosystem to sustain long-term health, there needs to be a significant purging of the crappy businesses, as well as the short-sighted business practices that have become common in this first wave of digital entrepreneurship.
Digital Entrepreneurship 1.0 is dead. It is time to move forward in the continuum.
Overall, how startups are born and grow needs to be revisited. What happened between 2007 and 2012 is gone. To quote John Lennon, “The dream is over.”
Bootstrapping will only take most startups so far. The minimum ante now is $100,000 out of your pocket (both living expenses and business expenses). You don’t starve an infant. And there is a difference between running lean and being financially anorexic. Either way, young businesses increase the chances of failure by not making the necessary investments of resources and personnel in the gestation period. If you don’t have the money (or a sugar daddy or momma), expect to fail and hope someone adds you to their team for your next gig.
But mainly, I think that the start-up accelerator model is broken, especially now when there is such an explosion of such programs around the United States. Accelerators are becoming institutionalized, which is a subtle form of stagnation. Understand that there are certain accelerators that are excellent (e.g., ERA, Kaplan Education, DreamIt), but the current model is a flawed.
- Three-to-four months is not enough time to accomplish more than an MVP, maybe. An MVP is a waste of resources if there is no pressing need for the product and you have no clue how to monetize it. Smart investors are looking for entrepreneurs who understand their businesses – the key drivers, what and who they have now, what and who they need to add, the financial fundamentals of their businesses and their markets, milestones, the competitive landscape. And you’re not going to learn all of that in three-to-four months while working 20 hours a day building that MVP and going to sessions where you don’t fully understand the material.
- Companies get admitted that shouldn’t – These companies have an inferior product/service offering and people who are not leaders or even managers. They lack the basic business building tools and the requisite business savvy.
- Lack of Commitment, Part I – The resources/people offered by a corporate accelerator aren’t easily accessible nor are they always top-notch (i.e., the A-team is not going to drop everything to help a startup or two).
- And the programs themselves aren’t well-thought out in terms of training/structure/etc. Some accelerators are glorified 120-day efforts to develop and deliver an investor pitch – with no substantive assistance in developing and building the companies they admit.
- Certain accelerators/incubators use a template-model partnering with companies that want to start an accelerator. It is highly dependent on 1) the company finding the right people – people who understand how an accelerator is supposed to operate and have a culture of mentoring and intrapreneurship, 2) Structuring a program of substance; and 3) a substantial commitment of corporate resources (people, access to the host company’s resources, etc.) to make it happen. It is not like getting a plug-and-play franchise like a Subway sandwich shop.
- Lack of commitment, Part II – $20,000 to $40,000 is not a lot of money to invest, particularly If you’re in New York City, it barely covers the living expenses of team members (a diet of Red Bull and Ramen is highly overrated.) If a company is accepted into a program, it should get more resources and cash. It must be nurtured. This isn’t Survivor. Presenting inferior companies at the end of a program not only damages the inferior company, it tarnishes the reputation of the accelerator.
Not everyone is meant to be an entrepreneur. I think people who offer programs like Entrepreneurship Boot Camps or Entrepreneurship in 12 Easy Steps are missing the point because these programs are built on a flawed premise and are a form of opportunistic cashing in on success. Some entrepreneurs may be sincere in wanting to share their knowledge, but they are not sharing all of their secrets, contacts and other true, critical elements to their success (besides timing a market perfectly or dumb luck). They are offering false hope. It is a mirage.
Further, funding is broken. There are unrealistic investor expectations (no hockey stick) from an investing cohort where a 15% success rate is considered amazing. That is sad. Crowdsourcing sites have become a fuster cluck. Just like the App Store, discovery is difficult – to get people to invest, a full-bore marketing/PR plan is necessary to build awareness and get people to your listing. Do you really want to spend time and money to attract low-dollar investors, as opposed to putting it towards building your business?
Another concept that has become distorted is the MVP. It has devolved to the point where MVPs are being designed for investors, not customers. While there have been a number of posts in the last month or so on what an MVP really is or how to build one, there is still a mentality of “slap together a few features and throw it out there” with no plan on how to incorporate feedback, let alone how to build out the platform, app, service, whatever.
Finally, there is culture. The nature of startup community has changed as 1) it matures; and 2) MBAs who once flocked to Wall Street now go to Flatiron, which results in an odor of arrogance that is permeating New York.
So what’s the solution? How do we evolve? Embedded in this piece are the cornerstones for Digital Entrepreneurship 2.0. It’s not for everyone. For those who participate, investors need to change their expectations (singles and doubles, not home runs), accelerators and development programs must be fully committed (no lip service) and the entrepreneurs they choose to help must have substantial products and services – which they have developed to an “investment ready” level. But that is a conversation for another day.
sbjopinions by Andy Harrison 