Tag Archives: entrepreneur

The Next Two People You Need to Start Up Your Startup

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Business leader and team

It’s a lot easier to figure out the startup puzzle when you have the right team!

By: Andrew Johnson, Ph.D.

It seems that every week there is an article or post that bemoans the shortage of innovation in America.  However, this is not due to a lack of great ideas and the pace of discovery in the labs across the nation.  The problem is getting the right team to lead and to grow these ideas into commercially successful endeavors.

Don’t go it alone
Having an exciting technology or scientific discovery on hand is not enough to form a successful company.  You need a team of talented people to help you realize your vision.  However, going from one person (you) with an idea and a passion to assembling an effective team and moving forward can seem daunting.  The answer to this is not complicated.  The first thing you need to do is assemble your first board members.

Who are they?  Early Advisors vs. Active Board
Whatever you want to call them, you need others to help you take your idea to the next step along the way to a successful company.  The best way to begin is to gather a small, but powerful group of people that you can rely on to help you develop a realistic strategy, identify productive tactics and complete the critical efforts needed to get this off the ground.  You will find that there are many that will be more than happy to become advisors but far fewer that will become valuable board members.  You need both but you need the active board member more, especially in the early days when this is still an idea.  Here are a few ways to distinguish the two types of people: Table of advisor traits

Your board may typically only have 2 or 3 other members in the beginning which is fine.  You will likely have significantly more advisors at the beginning but some of these may migrate over to the board member column as things progress.  Your advisors allow you to get a breadth of guidance and ideas and your board will provide the depth you need to sort through all of the ‘suggestions’ and actually help you with the heavy lifting of launching your new startup.  In addition to this, it is a lot easier to share the burden of this effort with a committed team than shouldering it all by yourself.

Next Steps:

      1. Identify 10 people who have the experience, resources, talents and connections you need and ask them to be on your board.
      2. Schedule a kick-off meeting to discuss your ideas with them and to identify what commitments you might need from them.
      3. Agree on a regular meeting schedule
      4. Parse this initial group, using the table above and your intuition, into Active Board Members and Advisors.
      5. Continue to recruit until you have at least 2 – 3 board members.

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The Mind of the Startup CEO: Why a Little Crazy is Good

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Person thinking

The successful startup CEO has a particular mindset that tends to favor the chaos and excitement that are typical in the early days.

By:  Andrew Johnson, Ph.D.

We have all heard stories about the ousting of the Founder and his team once their business has proven itself to be a winner.  Steve Jobs was kicked out of Apple (though famously brought back for a second act), Ben Cohen and Jerry Greenfield (The Ben & Jerry of premium ice cream fame) were ultimately replaced when the company was sold to Unilever.  This phenomenon can be scary to many new entrepreneurs.  However, a closer look at the differences between what makes a successful entrepreneur different from a successful manager not only shows why this is a logical progression but also something that should not be feared.

It is extremely rare to find a person that has the mental makeup and desire to be both an entrepreneur and a manager.  The following points show why this is.

The Mind of a Startup CEO

  • Deals with chaos with calmness:  The startup CEO not only has the resilience to withstand the unpredictability and risk associated with a new company but actually thrives in this environment.  Here are a few examples of the things that can keep you up at night with a startup; making payroll, cash flow, technical setbacks, opportunity costs, launching into an unknown market, threats from competitors, dysfunctional boards etc.  The startup CEO actually thrives with these challenges by finding creative ways to resolve these issues while sleeping soundly at night.
  • Doesn’t shy from risk:  The stakes are often very high.  You only have so much time to prove that you have a viable business before either you lose the support of your investors and/or miss your moment to enter the market.  Being comfortable with taking prudent risks allows the startup CEO to move faster towards success or failure.
  • Is creative, resilient and realistic: The startup CEO can maintain a certain amount of detachment from the pressures that are part of launching a successful startup (resilience).  They will look for non-traditional ways of solving problems (creativity). However, they are also realistic.  This crucial balance between Cassandra and Pollyanna (too pessimistic or optimistic) can be the key leadership difference between a commercial success and failure.

The Mind of an Established Company CEO

  • Skilled at maintaining and growing existing business with the least amount of risk:  The market and business of an established company are well known.  Success here is about strong and steady growth that is scalable.  The successful CEO of an established company knows how to execute on the business plan and provides the calm and methodical leadership it takes to keep everyone on track.  There is much less unpredictability here and this type of leader will look to avoid risks when possible and maintain a strong and steady growth trajectory.
  • Generally most effective when things are good – fails terribly when things go bad:  The CEO’s of established companies are excellent managers.  When things are good, they shine at steadily improving the performance of the company using tried and true procedures and policies that can be easily scaled to grow the company.  When things start to go wrong, (e.g. technical problems, labor issues, and/or entry of a powerful competitor into the market) executing on existing plans only makes things worse.  This is a time for innovation and risk-taking, this is a situation where the startup CEO thrives (turn-around experts are often former startup CEO’s).
  • More risk averse, steady hand on the tiller:  Decisions are made after careful and thorough analysis.  If there is not enough data to guide a decision, these CEO’s will defer making a decision and look to gather more information.  This is often the right thing to do in a successful established company where there are fewer unknowns.

Why you want to be replaced
Once a company has seen some success it needs to focus on execution and getting every last drop of profit from its established products.  This is where the mentality of an Established Company CEO is needed.  The startup CEO can find this environment to be stifling and may feel constrained.  The ‘seat-of-the –pants’ style of leadership that worked in the early days must give way to new processes and procedures.  This allows the business to scale up quickly and efficiently with a much larger team.  At this stage, even new product launches will feel different than your earlier efforts.  Phased gate reviews, shareholder communications management etc. will need to be part of the process now.

Know thyself and gun for your exit
The chaotic realm of the life science startup is a fast moving, passionate ride with thrilling highs (achieved profitability) and crushing lows (great tech but no market for it).  This is where the ‘Fail Fast” moniker is celebrated.  If you thrive in the worlds of chaos and speed, you will find the life of a manager to be slow and plodding.  You will no longer be as free to innovate as you were before.  If you know this about yourself, you can start to build in how and when you will exit the company.  Keeping this in mind can even be helpful with investors as they look for entrepreneurs with the foresight to put the well-being of the company above their own ambitions.  Stay as long as it is a fit and plan to leave when it is your time.  With a little planning, you can still participate in the success of the company with good exit terms (seat on the board, profit sharing, valuable equity holdings).  By planning for your exit you will now have even more resources to ease the burdens of starting your next company.

Suggested Reading:

A First-Rate Madness: Uncovering the Links between Leadership and Mental Illness by Nassir Ghaemi, Penguin Books Ltd, 2012. | A New York Times Bestseller.

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Women as Corporate and Entrepreneurial Leaders

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Lions

The business world can be an unforgiving jungle, but women handle it as well as men, and then some.

By:  Michael Kaiser

If you watch nature programs on TV, you have come across at least one dedicated to those Big Cats, the lions and you quickly realize that it is the lioness that looks after and commands the pride. At best, the male serves as a mix of bodyguard, concierge and gigolo. It is the lioness who does all the hunting and caring of her cubs. It is a constant challenge that forces the lioness to erect a fortress of rigorous discipline, alertness and battle preparation. This zoological example serves as an analogy for the vicissitudes and triumphs experienced by women in the business world.

In this second decade of the 21st century no longer can the male gender come up with comments bordering on blatant business misogyny such as “They are emotional”, temperamental”, “They are watching over their family, how can they run the business”, “They will get pregnant”, “They have their period and are impossible to deal with”, “They are capricious”, etc. As if those descriptions were not enough, along came the 2006 movie “The Devil Wears Prada” starring Meryl Streep as the epitome of a ruthless and cynical fashion entrepreneur.

That is definitely not the scenario that we should equate with female entrepreneurs and corporate executives in Western, and more recently, Eastern societies. Time to wake up and get the record straight: women are as strong as men; they are standards of initiative and dedication, intuitive, tactical and strategic leaders, progressive, highly motivated, creative, the list of positive characteristics goes on. And with a good sense of humor, they even bestow positive remarks about their opponents:

“We have ‘arrived.  it means we’re not expending a huge amount of energy battling each other for power, instead we’re having challenging conversations about what we do well and what we need to work on. It’s a fact (I have the research somewhere) that men outperform women in 4 key areas of business. They are better at asking for what they need, for standing out in a crowd, for singing their own praises and speaking up.” Suzy Jacobs in “Can we please change the conversation”.

In a reference quoted for the description of “Female Entrepreneur” we read that:

Studies on women entrepreneurs show that women have to cope with stereotypic attitudes towards women on a daily basis. Business relations as customers, suppliers, banks, etc. constantly remind the entrepreneur that she is different, sometimes in a positive way such as by praising her for being a successful entrepreneur even though being a woman. Employees tend to mix the perceptions of the manager with their images of female role models leading to mixed expectations on the woman manager to be a manager as well as a “mother”. The workload associated with being a small business manager is also not easily combined with taking care of children and a
family. However, even if the revenues are somewhat smaller, women entrepreneurs feel more in control and happier with their situation than if they worked as an employee.

Although many positive changes took place in the 20 years since its authors published their findings, there is still the classical “room-for-improvement” ahead. As an example: early this year the CEO of Yahoo, Marissa Mayer, issued a memo banning the practice of telecommuting for the company’s employees which led to a negative uproar, promptly smothered by a positive retort in her defense from, yes, a male reporter of the Washington Post.

Recent statistics show that women’s level of higher education is on its way of surpassing that of men, which explains the large number of female executives in some of the most complex and demanding scientific sectors. Alas, this has not minimized the obstacles they face due to social mores that still operate under antiquated gender roles; even today, the number of male entrepreneurs exceeds that of women, and that is based more on conventional stereotypes than reality, because women are equally as good as men in starting a company with very few financial resources at hand.

In closing I invite the reader to watch the TEDx video by Gayle Tzemach Lemmon, listed below. It is an uplifting paean to the resilience of women in the face of business entry barriers, and how they have become an integral and much needed part of entrepreneurship and corporate leadership, without gender barriers.

References and Additional Reading

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Entrepreneurs: Their Inspiration, Challenges and Opportunities

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By: Michael Kaiser

Entrepreneurs face an arduous climb as they build their business but the view from the top is worth it!

Entrepreneurs face an arduous climb as they build their business but the view from the top is worth it!

From the point of view of our economy’s present and future direction, we can predict that management and executive jobs that lasted or last for more than five years will experience a sea-change in the financial history of our country, to be replaced by interim executives and entrepreneurs. For the purpose of this blog I will cite The Random House Dictionary of the English Language Definition of who is an entrepreneur: “A person who organizes and manages any enterprise, esp. a business, usually with considerable initiative and risk.”

I will propose another definition of what an entrepreneur is: He/She are the creative parents of a startup company. In the case of high-technology products and services, those parents have become the innovation and R&D sources of the New Economy.

By the aforementioned dictionary definition, entrepreneurs are driven by deep personal convictions, the main one being the vision of a unique opportunity to be successful in their career choice, as well as financially so. They are also driven by the challenge of their essential need to work after the collapse of job opportunities stemming from an economic recession.

In the search for a better understanding of the entrepreneurial ethos, I came across many useful and diverse points of view, some of which are listed for further reading in the Other References section. Kelly Spors, a staff writer for the Wall Street, in a 2009 edition of the WSJ (notice the start of the Great Recession), asks prospective entrepreneurs ten interrogative and advisory key questions in “So, You Want to Be an Entrepreneur”:

1. Are you willing and able to bear great financial risk?

2. Are you willing to sacrifice your life style for potentially many years?

3. Is your significant other on board?

4. Do you like all aspects of running a business?

5. Are you comfortable making decisions on the fly with no playbook?

6. What’s your track record of executing your ideas?

7. How persuasive and well-spoken are you?

8. Do you have a concept you are passionate about?

9. Are you a self-starter?

10. Do you have a business partner?

For her full article and the content of those questions, click on:  So, You Want to Be an Entrepreneur

For those who took or are ready to take the entrepreneurial plunge, Mike Michalowicz in his American Express’ Open Forum article “The 7 Most Common Money Mistakes That Entrepreneurs Make”, warns them in this order:

1. Overhead investments

2. Underestimating miscellaneous expenses

3. Not testing before investing

4. Purchasing extravagance

5. Tax avoidance

6. Spending on do-it-yourself projects

7. Hiring before you can afford it 

To read the full article, click on: The 7 Most Common Money Mistakes That Entrepreneurs Make

Finally, the following is an abridged version of a recent article by Bill J. Bonnstetter, which addresses the skills and performance of entrepreneurs from a useful statistical point of view:

“After assessing the subjects on their personal skills and comparing their performance against a control group, we found a certain set of skills were the most predictive of an entrepreneurial mindset. In fact, by examining these five distinct personal skills alone, we were able to predict with over 90 percent accuracy people who would become serial entrepreneurs.  HBR ChartThe quality serial entrepreneurs displayed above others were persuasion, or the ability to convince others to change the way they think, believe or behave. Persuasion for this study was defined as the ability to persuade others to join the mission. In the study, this was uncovered by ranking on a scale of 1 to 6 prompts such as: “I have been recognized for my ability to get others to say yes,” or “I have a reputation for delivering powerful presentations.” Unquestionably entrepreneurs need to excel at persuasion, whether to recruit a team or get buy-in from investors and stakeholders.”

To read the full article, click on:  New Research: The Skills That Make an Entrepreneur

Further Reading:

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Building Buzz while Avoiding the Buzz Saw: Public Relations and the Life Science Start Up

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Honeybee on a flower

Get the PR buzz you want, avoid getting stung by bad press

By Andrew Johnson, Ph.D.

You have a ton of things to do to get ready for your product launch at the upcoming trade show.  You have got your website in great shape, you have product on the shelf, trained your sales team and/or partners and have a great booth.  You have even spent some valuable marketing dollars to promote your product.  Public relations is often neglected and mainly because it is often confused with marketing.  In its starkest definition, marketing looks to build a positive image and its products to a target audience though advertising and other paid means.  Good public relations looks to do this in an unpaid and perhaps more organic matter.

Public Relations is…
A good PR strategy will include interviews with reporters (both in trade journals and potentially in the mass media as well), speaking engagements, arranging to be on influential panels at scientific meetings and, if appropriate, on state and local panels when your products could have an impact with the general public like a new diagnostic or therapeutic offering.

Why You Want a Professional for This
This is often an effort that is best delegated to a professional.  A good PR consultant will often have a ready contact list of key people that will get you the interviews, articles and speaking engagements that will not only help to increase your visibility to potential customers but will also generate the valuable but hard to grasp concept of ‘buzz’.  A PR firm or consultant can also help to resolve any bad press or negative reactions in the media and on the web should that occur (that’s the buzz saw, in case you were keeping track).

Quick Tips:

  • Do develop a PR strategy with a PR Firm or experienced consultant
    Unless someone on your team is an experienced PR person with all of the contacts you need, include this in your business plan budget as part of your commercialization plan.
  • Do Make sure your website is up and running and contains compelling content
    When your PR activities generate ‘buzz’, you want interested parties to have ready access to additional high quality content.
  • Do prepare a ‘Media Kit’ to better manage your brand and image.
    Put a tab on your website that contains high quality images, logos and other resources that journalists and other media folks can use when they write about your company.  This gives you better (not absolute) control of how your logo and products are conveyed and helps to generate the positive impressions you hope to foster.

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