StartOut Smart

It’s the Execution, Not the Idea That Matters

execution1I was recently giving a talk to some aspiring entrepreneurs when a young woman- let’s call her Christine- who wanted advice on the viability of her business idea. When I asked Christine about her idea, she went silent. The kicker was that she wouldn’t tell me (or the rest of the class) what her idea was for fear that someone would steal it. If you’ve been quiet about sharing your business idea with colleagues, friends and family then you might be making a tremendous mistake. Look, we get that you want to protect your idea so that no one else can “steal” it but realize first that a business idea is really just the tip of the iceberg. 99.9% of ideas don’t really go anywhere because it takes time, energy, & money to turn that idea into something viable.

Unless your Uncle Buck can pull together an awesome, expert team as well as bring all of the enthusiasm and energy that you can to the table, it’s not likely that he’s going “steal” your idea. Consider talking to the people around you to see if you can “convince” them that’s it’s a viable idea and take notes when they give you constructive criticism.  You don’t have to take it all to heart, but you need to learn from both positive and negative comments. If you want to see if you’re idea is viable, take my quiz here.

When it Pays to pay for legal services

Many bootstrapping and aspiring entrepreneurs want to save money on legal costs. It’s no wonder when legal fees can potentially eat up thousands and thousands of precious startup dollars. There are many great sites to help you incorporate online, like CorpNet.com or get basic legal documents such as an NDA, like Nolo. These can potentially save you a lot of money for basic, run of the mill legal services. However, there are times when spending money for a bona fide business attorney makes sense. The following 3 items are the situations when you’ll need to seek legal advice from a business attorney:

1) Investors: Getting investment from Angel Investors (high net worth individuals) or VCs (venture capitalists). If you’re like most aspiring entrepreneurs, you’ll be seeking capital. If you’re going beyond friends and family, having expert advice to guide you on the equity structure, terms of the deal, repayment terms will be critical. You can guarantee that any big time investor will have solid legal guidance on their side so you’ll need a legal resource to back you up as well.

legal

2) Partnership agreement: If you’re going to have a business partner or two or three, then having a partnership agreement in writing is the way to go. Having an attorney draft this agreement for you can help identify contingencies in case a partner leaves or there are irreconcilable differences. This agreement can guide how all partners conduct themselves in the business. I don’t care if you’re best friends, you need a solid agreement in place because situations change and you all need to make sure that you’re in alignment. I’ve been friends with all of my business partners before during and after our business deals— and we’ve had agreements in place from the outset, which helped us navigate the murky waters and tricky situations that did come up.

3) Terms and Conditions for your product, service and website: Ok, this sounds boring but it’s important. We’re talking about the terms which you’ll be offering your product or service, whether online or offline. Having a T&C is a must and properly drafting it is way beyond the average person’s capability. A business attorney can work through the legal jargon. Check out our T&Cs.

So, if you need a business attorney, you can always check out your state bar association, or use one of my favorite and easy to use directories called Fizzlaw, where you essentially can crowdsource hungry attorneys who will compete to solve your legal needs.

Money Can’t Solve All Your Problems!

moneyAs much as you’d like

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to think, money cannot solve all of your problems Just because you have a business idea or even a new company doesn’t mean that you should start looking for funding right away to make it happen. Finding investment takes a lot of time and energy— and it will take some solid preparation before you’re even ready to start. First things first, prepare yourself and learn how to bootstrap A.K.A. doing things on the cheap to save precious cash.

In the meantime, get a working version of your product or service and write up a business plan so you actually know what you’re doing for the next 3-5 years. The plan should emphasize your actions for the next 12 months. Think of this as your action plan, your map of goals, direction, milestones etc. to help you get from point A to point B and make sure that all of your stakeholders are in alignment. (Here’s a template of a great biz plan that I use.) Funding might be point Z so don’t even worry about it for now. Prep yourself in every way possible way. Throw yourself into your industry as an intern, apprentice, or whatever you can get your hands on to build up experience in your field. Spend your time meeting the right kind of people, whether it’s finding mentors who can give you advice or trusted experts who will be your future board of advisers, build up a network to support yourself. Take care of everything else first and the money will come later when you’re actually ready to spend it smartly.

Moonlighting

moonlightingThinking about

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starting a business? Try moonlighting first. I’m not talking about watching episodes of the 80’s sitcom with Cybil Shephard … I’m referring to working part-time, either after hours or weekends in the field or industry of the business that you want to start. Doing this will help you gain valuable experience and insight that will absolutely improve your chances of launching a successful business (all while maintaining your day job). Whether it’s a product or service, you can start building your reputation and knowledge of that space. Not only that, you’ll be able to figure out if this business really is something that you want to start.

Plenty of would-be entrepreneurs come to me for guidance about how to turn their good ideas into new businesses. Generally, these ideas are in areas completely unrelated to what they’re currently doing. For example, a guy I knew wanted to open a wine & cheese shop, with the first location in New York, and plans to expand into other cities. He both loved and knew a great deal about wine. “Great,” I said (I was of course excited at the prospect of a hip wine lounge in my neighborhood). “Now, what experience do you have actually running or managing a wine bar?” Having worked on Wall Street, he didn’t have any. I suggested that he take 6 months to work in a wine bar, learning the ins and outs of operating this type of establishment. The knowledge gained and the connections made will make his transition from Wall Street to wine bar significantly smoother.

No matter what industry your idea will revolutionize, get some first-hand experience before you do anything else. While it’s possible to create a successful business without moonlighting, the learning curve will be that much steeper. If you look before you leap, you’ll be far more likely to land on your feet.

A Kick-A** Business Plan Template to Get You Going

businessplan1Every business needs a plan of action; at the very least a 12-month roadmap of where you’re going. Now, if you’ve got a great idea and you’re just getting the business up and running then a plan is even more essential. The value of a business plan has been debated but the skinny is that a good plan highlights the business strategy, direction, and key deliverables for the next 1 to 3 years, with a specific emphasis on the next 12 months. This is so that the management team, key stakeholders, and potential investors can get in alignment. Notice I didn’t say a long business plan, which was more typical 10+ years ago when plans were often in excess of 40 or 50 pages! Many business plans, especially those prepared by MBAs tend to be extraordinarily long-winded. I came from this exact same background and I fell in to this trap. I wrote pages and pages describing the industry, competitive landscape, and excruciating detail about what my product was going to be and wasted the time that I could’ve better spent outlining

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the concrete steps to actually get my product launched (which was NuKitchen, the diet delivery service which was my first business). These areas are important but a couple of pages would have been sufficient.

So, I’ve been using a robust plan template that was initially created by our Chief Technologista, Darlene, which can be modified for just about any business (or business idea). It’s comprehensive so you only need to use the parts that are relevant for you. Feel free to download it here. Now, we used this template to create a real business plan for a company that we helped get funding for- so we know it works. Feel free to review this sample SNC plan and apply it to your own business.

Start planning and keep me posted on your progress!!!

3 Things That Make A Startup Work- Eric Kuhn of The Founder’s Card

arrow1Many entrepreneurs, including myself, think big- really big. Everyone has ideas and some of them are actually quite good but usually they’re too big and broad to actually execute. If you’re serious about building a great business, you’ll need to be incredibly focused to make it happen. Otherwise, your idea will never have a chance of leaving that cocktail napkin. From my experience, the only way you’ll actually get going is by taking many small steps to stay focused. These steps, one by one, will collectively build your foundation for a successful business. Save the world but start by fixing your neighborhood.

I recently had a conversation with a very inspiring and successful serial entrepreneur- the real deal- Eric Kuhn, who echoed my sentiments about staying focused. He founded Varsity Books which he took public and most recently launched FoundersCard- a members only community for leading entrepreneurs and innovators. (I joined and love the perks like free inflight wireless on American Airlines.) I naturally asked what was his secret sauce for staying focused in helping FoundersCard achieve success. Here’s what he had to say:

1) Niche Market? Focus on a segment of customers and build a product that is exceptionally valuable and relevant to them. Don’t get distracted by trying to be too big too fast. After you succeed at accomplishing success in your initial market, you will be much better positioned to grow beyond that initial market.

2) Lean Startup? Cash will always be king. Communicate spending priorities and make sure everyone on your team spends the company’s money as if it is their . Regardless of how much money is the company’s bank account, intelligent

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and thoughtful spending leads to a healthier and more productive company.

3) Ditch the Outdated Business Plan. Don’t be hostage to the original business plan after you raise the money. It’s irresponsible to execute

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on a plan that it outdated. Constantly incorporate new insights from customer feedback to write plans that cover smaller increments of time. I use a three months plan to account for the ever-changing nature of a new business. Put the original business plan on the shelf and bring it out five years later. You’ll get quite a laugh.

Hopefully, these tips can help you in building your own business or taking it to the next level. Feel free to share your own tips for staying focused.

Yes! You Can Work Less and Earn More!

worklessYou hear about the horror stories all

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the time of entrepreneurs toiling 24/7 for months if not years on end to make their business a success. Some people think that’s how it has to be. Well, certainly for a time, while you’re figuring things out, you’ll have to dig deep to find your groove. However, there is no reason for you to have to run your business this way for the long term! I know from my earlier days when I started NuKitchen, an online gourmet food retailer, I was exactly this ‘horror’ story- working nonstop for a couple of years- risking my health, my relationship, my sanity, etc.

Now, I was working super hard and all of my time was accounted for but I was NOT working smartly. I think many early stage entrepreneurs and business owners get caught up in their own stuff and create a micro-managed culture where they’re working nonstop too. After all, who can sell as well as you? Who can write that memo as expediently as you can? It will take less time if you do it yourself…. And so on and so on. Get out of your own way and start working on your business and not in your business.

There are three great reads that I recommend to help you get out of your own way so that you can grow your business and put hours back into your day.

The first is Michael Gerber’s E-Myth. This popular bestseller provides a great primer for figuring out how to get out from under the weeds and start working on your business… he cites some very compelling examples of business owners who are “overworked, overstaffed and eventually broke”. Sounds likes you? Then it probably is.

Next is Tim Ferris’ 4 Hour Work Week. While I think it’s very difficult to actually get to a 4 hour work week- and I’m not sure that Tim actually does from sources I’ve spoken with, there are lots of nuggets of wisdom, in particular the sections about time management techniques to make you more productive, like only checking email twice a day, outsourcing administrative tasks, or becoming an ‘expert’ in your field.

Finally, there is Scott Fritz’s 40 Hour Work Year. I’ve met Scott and I really like Scott’s philosophy. In this practical read, he gives you a roadmap for setting up your business so that you ultimately only have to devote about 40 hours a year to managing it. It may be a stretch but it’s chock full of action items for you to implement in your business immediately. His philosophy has certainly worked for him, Scott has successfully done this in his multi-million dollar business that he founded.

Are you ready to work less, be more productive and earn more money? Happy reading!

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Not Tech Savvy? Here’s YOUR 5-step Guide to Web Development

nottechsavyThinking about a business and dreaming about

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its grandeur is one thing but actually creating a website to support the business is often less than grand. This is doubly compounded by the fact that you may be like me, a non-techie. I’ve certainly been around technology and consider myself on the forefront of new technology and cool gadgets, but I am certainly not a programmer! So, having been involved in co-founding multiple startups with a heavy website/web application component while being technologically “un-savvy”, I wanted to share some of the key tips to help guide you in your own web development. (I’ve written a proper guide/whitepaper, which you can access here but below is a summary.)

If you’re creating a Web-based service and/or product with customized online features and functionality (where a standard website template will not work) then you’ll need to create a web application. The following 5 steps outlined below will help you get going:

1. Document Your Website Requirements

Write down what you want the site to do and how you want customers or users to interact with it.

For example, if you’re an online retailer, you may want to offer the following:
a) incorporate a shopping cart for purchases,
b) maintain a repository of product pictures and descriptions.
c) Compare prices for a product from different stores
d) allow users to create an account so that they can save their billing and shopping cart information

2. Create Wireframes

Wireframes are the mock-ups of the visual presentation in each website page, along with its underlying functionality. This is how you start to translate the functionality of your site with a visual representation of your technical requirements (A Web designer- the person who creates the look and feel of your website- can do these for you, but you’ll have to fork over some cash for it. This will be discussed further in #3 below.)

Although you can literally just draw wireframes for each page on a piece of paper, I recommend using Visio or Axure which are software specifically made to help you craft wireframes with formal specifications to show each page so that’s clearer and easier for others to understand. Describe how each part of the page is supposed to work and function – explain whether or not its an icon, page link or a data capture field etc.

3. Find A Website Designer

The website designer is the person who is going to translate (or even create) your wireframes into the actual visual designs of the Web pages. The designer will create what website users will see when they come to visit your website. (At this point, give some consideration to design: Read our white paper on Graphic Design for more information.) Following the visual design, the developer can create the style sheets. Some designers take it a step further by creating the HTML base on which the development team will code, which then makes it even easier for the development team to understand how to build from the wireframes. Hint: This can mean fewer errors when translating your vision into the intended result i.e., a website that meets your requirements. You can find a web designer on freelancer recruiting sites like Odesk or Elance. These freelance web designers will cost you from $50-$150/hour depending on the experience level of the designer and the complexity of your job.

4. Find a Web developer to Scope Out the Effort

Finding a Web developer is a critical part of this process. The wrong situation could mean a lot of wasted time and precious start-up dollars. It’s better to invest in the time to find the right developer now rather than down road. It’s common these days to consider whether to develop your product using local – U.S.-based – developers or offshore resources (developers outside of the U.S). where the costs are typically 50% less (depending on the region). However, there are many things to consider before you decide to take the cheaper route and outsource.

Onshore:

U.S.-based developers can be easier to work with because there are less time or language barriers, so you may find that these resources communicate better and match better with your schedule. Depending on what you decide, developers can run from $75-$150/hour. With my last business, Nu-Kitchen, I initially hired a U.S.-based developer because I felt that I was taking a big risk with offshoring since I didn’t have a solid background or knowledge in technology, and I didn’t want to manage time zone or language barriers.

Offshore:

These developers are located outside of the U.S., such as India, Russia, Brazil. While these foreign resources charge usually no more than half those of their American competitors, you should be aware that it could be more difficult to communicate with an outsourced development team. To help mitigate the process, there are many project managers and U.S.-based firms that help facilitate this type of offshore arrangement. While it increases the cost, the combination is still typically cheaper than using U.S.-based development resources. If done correctly, this can be a great way to develop a website application.

Where to find a developer

You can find Web developers or development firms by checking out Elance or Odesk, they provide agreat way to source new development. Alternatively, if there is a website that you like, find out who developed it – you’ll often find this information embedded at the bottom of each page. Whatever you ultimately decide, talk to the developer’s current and previous customers who have sites similar in functionality to what you want to do. Get quotes for the scope of the work that you outlined in step 1.

5. Build the website

Once you approve the website design and the requirements that you scoped out above, turn it over to your developers. You’ll need to have regular “check-ins” and daily oversight to make sure that the development is progressing as you expect to and to address any challenges that arise. Make sure to be a part of the testing process so that when you’re ready for the site to go live, it is fully functioning and ready for public consumption. Given the customization that’s required, developers make their best estimates. However, if testing reveals “bugs” or other issues, this could delay your launch. Always add extra time to your budget to handle these unexpected delays, as well as “scope-creep,” which is additional development work that will be necessary to include more features, buttons, and other functionality as the need becomes evident. If you’re operating on a small budget, keep in mind that the total cost of building your website will depend on its complexity and functionality. Good luck on creating an effective and successful web presence!

Don’t look for an “office”… Opt For a “Community” Instead.

whyrentoffice1Don’t settle for renting or leasing an office when you can get so much more. As an entrepreneur, you can feel completely alone when you’re starting or growing a business. In the first business that I started, I felt as though I was the only one going through the challenges of hiring, doing way too much work, micromanaging, keeping the books, finding funding, running the business, etc. Given all of this- I had la lot of anxiety and drama running through my head, which was actually more perceived than real. It didn’t matter because it wasn’t productive. The first office I rented was a tiny but seemingly affordable box behind a dishwasher in the South Bronx. This physical separation from most life in New York City only contributed to my feeling of isolation and being alone. Without sounding too cliche, I just want to say that if you’re feeling the same as I did, you’re not alone! Not at all.

This is why I want to highlight the importance of finding a “community”- a work environment where you can grow and share experiences & resources to build a great business. So, if you’re thinking about renting an office- or your work environment in general- join an incubator or find a community work space geared toward entrepreneurs. If you’re a sole practitioner or in the early stages of growth, these environments can really the provide support you need, especially the psychological support to keep you inspired so you don’t go completely bonkers. The shared energy between entrepreneurs is infectious.

There are many shared workspaces, incubators and community work spaces for entrepreneurs sprouting up all over the country. Many are geared toward specific industries- like high tech- or demographic segments- such as women. I recently met a dynamic and inspirational serial entrepreneur, Amy Abrams. She is the founder of In Good Company, an incubator for women entrepreneurs. She’s created an incredibly flexible & affordable offering to meet the demands of a growing business- full & part-time offices, meeting rooms, and a variety of amenities including WiFi, copying, and printing. And, of course, bottomless coffee, tea & filtered water too! At Wicked Start, we rent from WeWork, a similar service to Amy’s but not gender or industry specific. What I love about the WeWork environment is the energy, design and organization. I also have the flexibility to use meeting rooms across New York City and soon San Francisco, where I do some business.

There are many more incubators that can actually help you develop and grow your business. We’ve compiled a list of some of the top ones in the country. Check it out.

If you have any comments or additional incubators that should be included, let us know!

Authentically You…

score1Last week, I was at a conference in Las Vegas speaking about the importance of vision and core values to a group of entrepreneurs. What I realized- as I was talking about my own vision and core values- is that I kept coming back to the theme of authenticity. It’s authenticity that’s been driving my vision and my core values, especially as I create and build each new business. Being authentic means being real about who you are- and translating that into your product or service.

Authenticity is important for three reasons:

1) It’s a reflection of you and it’s how you execute your passion. If you’re starting or running a business, there are just too many opportunities to ‘quit’. If you’re not doing it because you’re able to express yourself, you’re unlikely to see it through successfully. Cash is low, customers are scarce, market conditions deteriorate, etc. They’re all present every day as you build your business. So, your authenticity will let you indulge your passion, while you follow your vision, and witness your core values in action.

2) It’s the only way that you can effectively compete, especially against big and established brands. It’s easier than ever to start a business, so getting noticed is going to depend upon you. By being authentic, you stand a greater chance of succeeding. Think about why reality TV, YouTube, and even blogs have proliferated and in some cases, gone viral with chatter around the globe. The simple reason is because they’re authentic. Real people doing real things.

3) It can lead to happiness. At least this was what marketing strategist Ivana Taylor says in her OPEN feature where she cites research linking authenticity to happiness. I believe it too, since I’ve found this to be the case from my own life experience. Authenticity can lead to happiness!

For me, I think about what’s authentic to me. I’m genuinely obsessed with building and creating. I express this through the businesses that I’ve started so that I can help people reach higher ground, whether it’s through healthy eating- NuKitchen- or starting a business- Wicked Start. In each of these businesses, you’ll find genuineness coming through all that we do. We’re not perfect but we do our best and are continually striving to improve.

I think about when I first launched NuKitchen- the online diet service- and in our first months of operation, our food delivery van got into an accident. Nobody was hurt but none of our customers got their food that evening. People were upset- I was upset- but they understood because we took the time to email and call them to explain the situation. They knew that we were doing our best as a boutique business. Our authenticity translated into stellar customer service, which was a critical component of our customer experience.

In your own situation, think about what’s authentic to you and how you can let that translate into your own business.

Keep me posted with your stories of authenticity.

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