by tomnora | Dec 26, 2011 | Angel Investor, Business Development, CEO Succession, early stage, founder, Launch, Revenue Growth, Scalability, startup, startup CEO
One of the things I tend to obsess about these days is startups that have little or even no real lifespan. Almost every day I uncover another one, some even with significant funding. In greater Los Angeles, now being called Silicon Beach, this problem seems to be more prevalent than in most areas. So many people make their goals to just b a startup, get it started and look for funding, without much thought about multi-year growth and sustainability, i.e. Scalability.
A common area of neglect in this early stage is people – Scalable People. Startup founders tend to add people that are close to them – friends, coworkers, spouses, family, neighbors, roommates, similar age, etc. These folks are very accessible and trustworthy, not much interviewing required, and often will start working with little or no compensation. It’s good to have some of these. The biggest downside is that eventually you will have to extract or diminish the roles of most (not all) of these people.
I once had an early employee at a startup I took over who was sales, marketing, receptionist and payroll. Early on we were lucky to have her doing all those things, and she received great stock options for being an early employee. But as we grew there was no doubt that we needed to replace her in most areas with a professional team that could scale with the job. Every change we made pissed her off and she fought for her position, which was counter-productive to our growth. She eventually left with some bitterness, but that went away once we went public and she could pay off her mortgage entirely.
You also have to mix it up as early as possible with real professionals that can scale when the company grows- people who “think differently”, have different experiences, drive initiative that none of you have even thought of, and want the company to be much bigger. These days a popular add in Los Angeles is someone from Silicon Valley; it adds a realness to the group and gets investors excited.
I’ve been on all sides of this situation – I’ve been the founder trying to attract the best people, and just as often I’ve come in as the “suit” to a small group of founders and early employees. It’s more work and trickier to splice the 2 groups together than to just use your inner circle, but it’s the only way to grow now and later. Please contact me if you want to discuss your startup. @tomnora
by tomnora | Nov 14, 2011 | Business Development, CEO Succession, early stage, founder, Launch, Revenue Growth, Scalability, startup, startup CEO
Are You a CEO? Is Your Boss a CEO? Are They The Right CEO for Your Company?
There are those who work as the CEO and those that don’t. The trick is in knowing which one you are.
Are you a CEO? Are you the right CEO for your company? This seems like a silly question at first, but one of the most important for a startup foundation team. In most one-person startups by default the founder is CEO; it’s difficult to resist the temptation of the title. But not all founders do this.
If the CEO not the optimal choice but doesn’t want to admit it, beware, your startup could become an exercise in ego instead of a successful growth/job machine. There’s no formula or perfect background for the “perfect” CEO, and there are many degrees of success; in the end the proof is in the pudding. No one would have guessed Gates or Zuck would have been so successful, but they made it happen. Jerry Yang had many of the right ingredients, but somehow can’t make it as Yahoos CEO. Terry Semel was a great studio head but not a tech CEO. Meg Whitman got slammed trying to run for governor but she was and is a great CEO.
I see many non-CEOs trying to be one in my consulting work. This problem has to be fixed early in the life of a company once it becomes “real”. The first momentum a company has must be nutured like water in the desert;
The purpose if creating a startup is to create something that didn’t exist before – something out of nothing, and thereby create wealth, new money that can be distributed within and outside the company. Even in a non-profit this is true. That goal doesn’t work with the wrong leader at the top. How do you know? Usually you’ll feel it, from the people inside and outside the company. I often play “Shadow CEO” for early stage CEOs, which bridges the gap in experience for many leaders who lack experience but have the skillset. The difficulty comes when the current CEO just isn’t right to scale the business but wants to hang in, often for some very good reasons, but still the wrong choice.
It takes courage to remove yourself as a CEO, but I’ve seen and assisted in the process a dozen times to goos results. Please contact me if you know of any of these situations; they (usually) fascinate me.
by tomnora | Oct 13, 2011 | Business Development, CEO Succession, early stage, founder, Revenue Growth, Scalability, startup, startup CEO, venture
This is an obvious one, but a point too many startups forget or ignore in early stages.
The purpose of a for profit business is to generate revenue, period. Avoiding this fact and/or not planning on it, focusing on it In most cases, the goal is to increase revenues continuously over time, i.e. scalability. It’s even more desirable to never have a dip in revenues, but this rarely happens.
There are tons of articles about many things about the startup world these days. Equity discussions, how to pitch, what’s hot, success and failure stories, etc. But very few articles about how to begin, grow and sustain revenues, what that process looks like or what to do when they stall.
There are also almost as many startups as the number of people I meet these days. Everyone has their own startup, which is usually little more than a reserved url, a $10 commitment and an idea. But can they produce revenues, increasing revenues over time profitable revenues? Can they create jobs? Stay in business for 10 years?
Google just announced their most recent quarter numbers: 26% increase in revenue year to year to $9.7 Billion. Now that’s a revenue focused company, pretty incredible for a 13 year old company to be growing that fast in a bad economy. Google’s original business plan didn’t even include their current main source of revenue – advertising. But they adapted quickly and haven’t looked back yet. Their admirable amount of revenue allows them to do so many powerful things their competitors can’t as well as contribute enormously to philanthropic causes. Not every startup will be a Google of course, but if you figure out how to continuously scale revenue or even maintain zero growth revenue, you can provide viable employment, profitability, benefits and even give back to society a bit.
So how do you do it? There are several components that must work together like a system that incorporate your products, your values, your people, outside advisors, investors and more. Having a great idea of course is key, but that alone won’t sustain you. This is where many startups trick themselves. “We have an amazing idea, so we will succeed. You must monetize properly, plan for hiccups, see the future. Most of all, Revenue has to be nurtured and protected priority #1.
I’m happy to discuss this more, just send me a DM at @tomnora or post on this blog.
by tomnora | Oct 9, 2011 | Business Development, CEO Succession, early stage, founder, Scalability, startup CEO
Chief Executive’s Top Ten CEO Blogs | ChiefExecutive.net | Chief Executive Magazine http://j.mp/nEW767
by tomnora | Sep 15, 2011 | Business Development, early stage, founder, Launch, Revenue Growth, Scalability, startup, startup CEO, venture
http://sfist.com/attachments/sfist_jeremy/garage.jpg
Many dream of being the instigator or part of the “Startup Launch”: First Discussions, Initiation, Developing a business and product(s), and most of all Success. What many dreamers don’t realize is that all of these steps are the by-product of the core reason the startup is being formed – a great product or service. It’s not a TV show where Ashton Kutcher claims he’s an “Internet billionaire” and no one questions it; in the real world great startups become great companies by focusing on Execution of ideas into products and services. A startup becomes a sustainable enterprise by repeating the process over and over.
An idea in itself isn’t worth much, and this applies to the tech world more so than most other segments of industry. Because of the vast amounts of publicity lavished on Mark Zuckerberg, Steve Jobs, and the Google twins, many fashion themselves as making a few key steps and then finding themselves on the cover of Time, or at least in a million dollar home.
I often encounter people who have great tech ideas – friends, colleagues, employees, neighbors. Many are very good ideas; almost all of them drift away into the ether, unless someone else executes one of them. Then my friend will inevitably say “I had that idea! They ripped me off!” Or they tell me that I should execute their idea and then give them a percent of the “winnings”.
Ideas without execution are just talk, I’m a culprit also, for many reasons. I used to try to explain this to people when they approach about a tech idea, but it usually just bursts their bubble and they don’t quite hear the message. The act of execution tests whether the idea can become more – it causes validation, formation, proof of concept, exposes fatal flaws, creates adjustments, essentially turns it into reality or the discard pile. This process IS the company, extremely important and often misunderstood.
There are countless examples of startups that begin as one thing then morphed into something different – HP, arguably on of the first Silicon Valley garage startups, was first successful with an audio oscillator, which they built after very little planning or product thought. Their process was correct.
So your original idea is likely to change some anyway through the process. Other people will help take it over the line; welcome them. So please contact me if you’re anywhere along the startup road, and Ill try to help you turn your ideas into things that the world wants.
personal: @tomnora
business: @cowlow
by tomnora | Aug 30, 2011 | Business Development
People often undervalue Business Development as a critical function in a startup. What is it? How does it differ from Sales, Marketing, Major Accounts? When is the startup big enough to dedicate a headcount to Business Development?
BusDev is less understood than most titles, and widely ranging in responsibilities. It is the critical glue between sales functions and the senior management. BusDev is relationships, longer term thinking, non-revenue partnerships, communication between Sales, Marketing, Engineering and Finance if you have all of those covered.
BusDev people see the potential connections between your company and several others. They find creative ways to do business or vastly improve business relationships, especially when they can work with BusDev counterparts at target partners. It’s like the 2 lead guitarists of 2 bands playing together going off into the corner and working on just their parts, and relationship. They’re focused on one thing.
BusDev people are also focused on one thing –– taking the businesses beyond simple linear transaction based relationships. They don’t worry about this weeks revenue or finance, etc.
In a smaller or earlier stage startup, the CEO covers most areas that have no dedicated leader, BusDev being the most common unfilled spot. Sometimes this works but often not. The problem is when the CEO is not a good match for this position – in experience, skill set or desire. It also distracts him/her from other CEO functions, and is not as impressive to the client, partners.
So, if you can afford a strong BusDev investment early, it can be a secret weapon that ensures your long term scalability and gets you funded.
Contact me if you’d like to discuss more.
