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See any relevance to entrepreneurship?

July 30, 2009, General Thoughts
http://www.schoolforstartups.com/see-any-relevance-to-entrepreneurship/

I would like to share a passage that all entrepreneurs-to-be should hear:

      It has been said that the wisest man who ever lived in America was Ralph Waldo Emerson, the Sage
      of Concord. Emerson declared, “A man is what he thinks about all day long.”

      A famous psychologist says, “There is a deep tendency in human nature to become precisely like
      that which you habitually imagine yourself to be.”

      It has been said that thoughts are things, that they actually possess dynamic power. Judged by
      power they exercise one can readily accept such an appraisal. You can actually think yourself into or
      out of situations. You can make yourself ill with your thoughts and by the same token you can make
      yourself well by the use of a different and healing type of thought. Think one way and you attract
      the conditions which that type of thinking indicates. Think another way and you can create an
      entirely different set of conditions. Conditions are created by thoughts far more powerfully than
      conditions create thoughts.
                                                                                                                                          by   Norman Vincent Peale

See any relevance to entrepreneurship?

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New Way to Say the Same Old Thing

July 29, 2009, Bootstrapping
http://www.schoolforstartups.com/new-way-to-say-the-same-old-thing/

One of the most important things we want to teach at TheEntrepreneurSchool is bootstrapping.   We believe very strongly in the benefits of bootstrapping.  Some businesses require huge investments to get started, but many of the best businesses get started with very, very little money.  Bootstrappers borrow $2,000 in capital or finance start-up with their credit cards.  They cut corners whenever possible to save money, like learning to do their own web editing to save money.

Bootstrapped businesses have many benefits.  First, instead of spending time raising money, the owner spends time selling things, learning what the market thinks of the product and the proper pitch to sell it.  Also, this company learns to grow through internal profit-based financing, a much healthier route.  And in the end, the entrepreneur ends up owning much more of the company.

I have two favorite entrepreneurial stats: the average US based entrepreneur ends up owning 8-10% of their own business.  I have seen it quoted as low as 4%.   That’s it!    4%!   This happens because they sell off parts of the firm to finance growth, the “its better to own a small slice of a bigger pie” strategy.

My second favorite stat, from “The Millionaire Mind” by Stanley and Danko, you take all the self-employed, all the doctors with private practices, all the lawyers in partnerships, and all the entrepreneurs and add them up, you find that 86% of all millionaires are first generation millionaires.  They got there in one generation.  The rich are not inheritors or actors or sports stars, but individuals that made themselves rich in their lifetimes.  Powerful stuff to me.

Anyway, I digress.  I was reading BusinessWeek magazine (July 27, 2009).   They had a good article about bootstrapping.   Apparently, bootstrapping is back in style in Silicon Valley, but it has a new name, “going lightweight.”   They refer to several businesses that are being started by entrepreneurs that live in their offices to reduce monthly payments.   And, they quote a venture capitalist that praises them for going lightweight, treating it like it is something new!

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The Spirit of Entrepreneurship

July 24, 2009, International
http://www.schoolforstartups.com/the-spirit-of-entrepreneurship/

Do the skills taught in a corporate setting transfer over to entrepreneurial ventures?

This is an interesting question in a time where corporate jobs are disappearing in a number of different industries.  But is it the right question?  Is it a matter of skill set as much as a matter of having a spirit of entrepreneurship?

An interesting distinction exists in the Japanese language.  Their direct translation for Entrepreneur is the same word used when referencing a young entrepreneur that has become greedy.  Many times, this Japanese entrepreneur has stacked up on exotic cars & apartments.  This does not bode well in a communal society where the welfare of the group supersedes the welfare of the individual.

So, if you walk into a store in Japan where the owner clearly started the business from scratch and ask him if he is an entrepreneur, he will say no because he does not want to be associated with the negative stereotype of an individualistic entrepreneur.

However, if you ask that same man if he has the Spirit of Entrepreneurship, he will reply yes.

So, in Japanese society, the distinction is between being able to start a company, and having the spirit of entrepreneurship.  One who starts a company may be a good businessman or woman.  One who starts many companies and is constantly thinking of new ideas and better ways of doing business has the spirit of entrepreneurship.

But, let’s come back to the original question.  In general, an established corporation has the goal of maintaining their market share with the hope of a little growth each year.  In general, Coca-Cola is unlikely to develop a small project when their shareholders demand certain returns.  Entrepreneurs seek opportunities with rapid growth in new niches.

For musicians, reading music for a song that has already been written requires a completely different skill set than a composer writing a brand new song.  Same goes for skill sets in maintaining market share compared to building a new product or service from scratch.

But just because you have worked in a corporation for 20+ years, that does not mean that the Spirit of Entrepreneurship has been squelched.  The spirit of entrepreneurship is still there, you may just need to dig a little deeper to overcome the corporate training.

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Is Venture Capital Funding right for You?

July 24, 2009, Venture Capital
http://www.schoolforstartups.com/is-venture-capital-funding-right-for-youto/

We often hear conflicting stories about Venture Capitalist. First, we hear the success stories of funding that enabled Google, but we also hear horror stories of unmitigated evil perpetrated by Venture Capitalists.

As an entrepreneur, which side are you to believe?  When should you use VC funding?

In today’s economy, entrepreneurs are trying to bootstrap their businesses as much as possible for a few reasons:

  1. To grow their business using cash flow as opposed to debt funding.
  2. To maintain full ownership of their company (funding collateral usually consists of a % of your company).
  3. To maintain control of the growth of their business.

But what happens when Venture Capital funding becomes necessary?  What should you be looking for when seeking VC funds?

First of all, when researching Venture Capital firms, be aware that VC’s are not just about funding.  Perhaps the more important issue is the experience the VC firm brings to your business.  They are around businesses all day long.  They have seen many failures, and a few home runs.  They have their eyes on the market and can see how a new product could be better structured to meet the demands of the marketplace.  Approach VC firms not just as financial partners, but as business partners.

Secondly, a VC firm can bring a certain clout to your business that is not present as a start-up.  This clout can bring about instant recognition and credibility with both bankers and potential clients.  VC firms have no choice but to brag about you to the market.  It is in their best interest, and yours as well.

But be aware.  Venture Capitalists must make a certain return within a tight time frame.  To do this, they are likely to make drastic changes to your company (to the point of removing you as the entrepreneur).  That is why careful consideration must go into seeking VC funding and limiting the % ownership (ie. level of control) you give to them.  Before seeking VC funding, do all that you possibly can to bootstrap your business.

At the end of the day, you as an entrepreneur have a product or service to bring to the market.  You want to be able to work with a VC firm that will help you bring the best possible product that will garner the most sales, making it a win-win for everyone involved.

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2Q Venture Capital Numbers

July 21, 2009, Venture Capital
http://www.schoolforstartups.com/2q-venture-capital-numbers/

The Dow Jones VentureSource just released data regarding the amount of Venture Capital invested in the USA during the 2nd Quarter of 2009.  The numbers are quite startling when compared to last year:

Venture Capital investments during 2Q 2009 were $5.27 billion (down 37% over same period last year).
Venture Capital investments during 2Q 2008 were $8.33 billion.
Venture Capital investments during 1Q 2009 were $3.99 billion.

The 1Q 2009 investment amount was the lowest since 1998.

What does this mean for entrepreneurs?  Although VC funds have increased over last quarter, many entrepreneurs are concentrating on bootstrapping as many parts of their business as they can and only seeking VC funds for major purchases to bring their business to the next level.

5

New Google Search Options

June 30, 2009, Ranking #1 on Google
http://www.schoolforstartups.com/new-google-search-options/

The Entrepreneur School Google SearchGoogle has just announced some key changes in how search is conducted.  Google believes these changes are the future of where search is headed.

So, for you entrepreneurs out there wanting to be sure that your website will excel in these changes, take a look at what these changes will mean for you:

First of all, you have probably noticed a new link under the Google logo titled “Show options…”

New Google SidebarOnce you click the “Show options…” link, the side bar to your left appears.  Take a look at the top 3 options.

- Videos – This option only returns videos relevant to your search.
- Forums – This option searches out forums related to your search term, even if they are deeply embedded within a website.
- Reviews – This option finds reviews about your search term, whether it be about a company or a product.

So what do these things mean for your online business?  First of all, videos are important.  And research shows that videos under 4 minutes are the best to gain and capture your client’s attention.  The days of text-only sites are coming to an end.  Include well-thought-out videos.  Also, does your site warrant the necessity of a forum for people to discuss your idea or product?  Have a place for people to debate.  Finally, include a section on your website for product or idea reviews.  Allow client feedback, both good and bad, because it will be better for you to have control of the review section than for Google to find another review section for you and list that first.

The other items to note are that people will be narrowing their search to recently posted content.  Are you regularly updating your website content?  Also, people will be searching directly for images.  Since there is nothing inherent in an image to tell Google what the image is about, they will be relying on the Alt Text that you place behind the image as well as the file name of the image.  Have you strategically named your images?

Erik Rostad

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Ten SEO Tips & Stats

June 11, 2009, Ranking #1 on Google
http://www.schoolforstartups.com/ten-seo-tips-stats/

Hello - 

After reading through some Search Engine Optimization tools, I assembled a list of ten pieces of information that I thought were valuable.  Here they are:

  1. Include live chat on your website – be accessible as possible for questions.
  2. Nielsen reports that 65% of streamed videos are viewed during working hours – 9am – 5pm.  Yep, that’s right, people are taking advantage of their company’s high internet speed to catch up on videos.
  3. The average duration of a video viewed online during the month of December 2008 was 3.2 minutes.
  4. Regarding the importance of clean code and fast page loads – a half second delay in page loading time was reported to cause a 20% drop in traffic.
  5. Autoplaying videos on your website is frowned upon.
  6. Only include one video on each page.  More than one can decrease load time.
  7. Images hold website viewers attention the most.
  8. Videos still have a high perceived value.  Blogs are viewed as a place to get news.  Post videos on your blog and you combine two arenas with relatively high value perception.
  9. The best way to use Twitter as a marketer is to constantly give value to your followers.
  10. Google Analytics is still one of the best tools out there for analyzing website traffic.  And it is free!

Check out The Entrepreneur School website to learn more Search Engine Optimization techniques including How to Get to #1 on Google.

Erik Rostad

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