Bill Gross, the CEO of Idealab, knows a thing or two about starting a business. He has helped launch 196 companies. He has been involved in 300+ rounds of financing. He has had 35 succesful IPOs. He has also had 40 failed businesses.
Entrepreneurs can learn a thing or two from him.
Bill gave several key learnings from his career, and while a lot of what Bill says is simply ‘common sense’, I find it is the one thing most of us lack.
Market Power Rules: At age 12, Bill founded a candy business. The local supermarket was selling candy bars for $0.10 each. He found a way to buy them where they came to $0.83 each. He then sold the individual candy bars to his fellow school chums for $0.09 each and made over $400. The key here was giving the market what it wanted –> the feeling of getting a good deal, and he had market power as he was able to alter the price of the goods.
Master Your Demo: This is the number one rule, for everyone. It does not just apply to entrepreneurs or to those in the board room. Everyone in the business must learn how to sell, pitch and most importantly, close people. Whether you are standing in front of a VC or talking to your friends in a local pub –> YOU MUST BE ABLE TO SAY WHAT YOU DO, and you must be able to say it well. And you must be able to say it in less than a minute. People will lose interest in 20 seconds if you cannot articulate what you do or what your company does.
Pursue Your Passion: If you are not passionate about what you do, it is a good bet you will not be succeed when times get hard. History has shown several great leaders who were on the brink of failure (like Walt Disney, Steve Jobs), were able to rebound (successfully) because they had the passion to succeed, but more importantly, they believed in what they were doing and because of that – they were able to push through the hard times.
Focus, Focus, Focus.: They don’t call it the ‘shiny object’ syndrome for nothing. I think there are two main ways businesses can easily lose focus; (1) try to do too much at one time and (2) allow critics to dictate a change in your core business. I think both points are easy to fall prey to, and, both points require consideration as they may the right path for your company.
We have experienced the first point at various times in building Social Media Club. While we have never been short on ideas, we have tried to do too much at a time and ended up not getting anything done. This was a hard pill to swallow. We are still learning how to rework our wish list so that we have more small(er) successes rather than one or two large wins, but it is tough as while we know *what* we want to get done, we don’t have the resources to do it all. They key is to prioritize items, scale back when needed and make sure you have the resources in place to see it to completion.
Recognize Your Strengths: In other words, emphasize the positive. Design a structure around your strengths and balance that by having complementary skills around you.
Don’t Overbuild. The world is changing fast. Bill feels it is better to “grow slowly, than go out of business fast”.
Survive Until The Market Is Ready: Many times, great ideas are way ahead of the market it is trying to serve. If you find yourself in this position – how can you cut your burn rate to be there when the market is ready for you?
Test, Test, Test. Find a way to test your customer proposition and then apply resources to build it out. Many times entrepreneurs build something they want only to find their prospective customers need something else. Facebook is a great example of this ‘motto’. Facebook today, is not the Facebook that existed eight years ago, however the intent of the platform is the same. The big difference here, is that Mark Zuckerberg listened to his customers and was smart and agile enough to update the service along the way. So listen to the market to make sure you are right on track, but know the difference between ‘serving needs’ and ‘losing focus’ of what you are trying to accomplish.
Stick With It. When you know in your gut you have something, stick with it, even if the critics tell you otherwise.
Find Essential Partners: Whether financing, promotion/marketing, technology or other types of support – build relationships and partnerships that will help you succeed.
Harness Your Users Passion. If you have evangelists in your community, find ways to integrate them deeper into your business. That can be through user groups, early product releases, have bigger roles in the community participation, or similar. There are 100s of ways to ‘reward’ evangelists for their support and passion.
The video from Bill’s talk is below and I encourage every entrepreneur to take the time to listen to it.
UPDATED: If you would like to see Bill’s presentation slides, you can find them here.