Of dreams, not nightmares

” you might as well dream big, since it’s a dream. It doesn’t cost you any more to own a Lamborghini in the dream than it costs to own a Bicycle” – Unknown.

There once lived two boys in a small township. Boy A, growing up, had always been told how much money the the local cheese sellers made and how great it would be if someone from the family made that much money. As expected, the young boy set his sights on that goal and whenever he went to bed, he had dreams of being the top cheese seller in the town. Several blocks away form Boy A’s home was Boy B. Boy B never felt comfortable in this town, he always thought people were too cautious and the standard of living could be better. He started visiting other towns, reading books and learning about things other people did. He found that there were several other things he could do to make him be who he truly wanted to be. He started dreaming of making money and having people work for him, doing things people really wanted to see! Truth is, people always work toward their goal and you get what you work for…most of the time. Fast forward 40-something years, Boy A is the top cheese seller in Blackheath, England and Boy B is Founder/Chairman of the Virgin Group with an estimated net worth of £2.6 Billion.

When you dream, you open yourself to a whole new world of possibilities. You find that it is possible to imagine things and attempt to live them out. This ability to not only dream, but dream big is a common trait of the most successful Entrepreneurs of our time. When Mark Zuckerberg sat down with some of the board members of Facebook and told them he saw their numbers doubling in 6 months time to over 300million users and refused to back down on his decision to change the Homepage and not carry banner ads, things got heated. Some employees who were starting to see a decline in the rate of pageviews and signups at the time even started to panic, resign and take other positions. Today, the evidence is there for all to see, Zuckerberg did make the right decision.

There’s so much talk in Silicon Valley about the importance of Lean startups and why Investors are looking to invest only in Entrepreneurs who know how to make the most out of a little change. The gospel has spread like wildfire and Entrepreneurs have started cutting back on their goals and asking for less money in a bid to look like they can be “lean”. If you have built a prototype and you’ve shown without a doubt that there is a market for your product, it IS time to take over that market and scale up accordingly. Don’t target the west coast only and ask for 1/4 of the money you need because you want to appear lean, knowing fully well that scaling up and reaching out to the entire country will yield the best rewards. When you work on your startup, how about put it all on the line, dream of the best your company can do and go for that.

“…at Inter Milan  we are a blood team not a skin team. When we play, we leave it all on the pitch. You don’t see skin on there, you see blood. As long as we win, it doesn’t matter.” – Jose Mourinho (Manager of Inter Milan FC after beating Barcelona in the semi finals of the 2010 UEFA champions league)

Innovation comes in handy

Innovation is something you either have or you don’t. Some people will make good Entrepreneurs and some wouldn’t. Simple. The ability to envision something most people don’t even know they need and then make it really happen is what makes a true Entrepreneur. For the life of me I didn’t know why anyone would care about Twitter when I first heard the idea. Evan Williams (@ev), co-founder of Twitter was addressing a room full of Entrepreneurs, geeks and a handful of investors a few years back right after releasing the product to the public. He said “we had this idea of letting people express themselves and share what they are doing with friends in 140 characters or less.” At this time, Facebook was still rather bare and didn’t have the “status” feature it has now, but still a good number of people found the idea totally unnecessary and didn’t see the point behind it. They believed that bit of social interaction where you can tell you friends what you are doing was already available on Facebook, so why tweet?

The founders of Twitter obviously had several other ideas in mind as to what Twitter can be used for. They saw beyond the typical 140 character blab and anticipated celebrities building a following and keeping these “eager fans” updated. They saw Businesses taking advantage of the opportunity to share and showcase their products. They were innovative. The rest is history.

Take a risk

“…he’s gonna have a hard time explaining to Hayley and Laney, these food stamps and this weak sh*t, coz he never risked sh*t. He hoped and he wished it, but it didn’t fall in his lap, so he ain’t even here” – Eminem

Two months ago in donwtown NYC, I overheard some fresh-faced, college students talking about how “awesome” they thought the site textsfromlastnight was. Apparently, one of them had sent in a text he got from his ex-girlfriend two nights prior and luckily it made its way to the site’s homepage. The conversation slowly drifted into a discussion about their own little project they had been working on for a few months. One of them mentioned how it would be absolutely impossible to take on Foursquare, which happened to be their major competitor. He gave several reasons in his attempt to convince his partner to give up on this project and look in a different direction. He said “I am certainly not willing to put all that 10 grand seed money into something that will just fail dude, let’s find something else to do. If someone chooses to invest in us though, then sure, as long as we are not wasting our own money.”. But for the very beautiful girl I was entertaining on the day, I would have turned around, bounce my head around in disgust and told them to “grow some balls”…well maybe not, but you get my point.

If every one starts thinking this way and running away at the first sign of competition, the world we know now will be much different. There’s no way guys like that will make it 2yrs at the helm of any company, if they are even lucky enough to start one. Willingness to take risks has to be a driving force for Entrepreneurs. You have to be prepared to fail in order to succeed. We don’t need to start talking about posthumous stories of Thomas Edison and his lightbulbs, but it is common place, if someone like Ron Conway doesn’t take the risks he takes in investment, he won’t be the man he is today.

So Tolu, what are you saying? Dream big, think deep and lose the fear. What is failure anyway? if it isn’t merely 2 blocks down the road from victory…or so they say.

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These days it seems like startups are springing up everywhere every single day and it’s a bit tiresome really to take it all in. All of a sudden myriads of people want to start companies, they don’t care if they have what it takes or not, they just want to build something successful. Just like me, they are on Techcrunch everyday, they read all these success stories and feel a renewed confidence in their ability to build something better than Facebook. I am no pessimist, but I like being very pragmatic. The truth is that not all of us can do what Zuckerberg has done, but those people who actually have what it takes to cut it need to pay attention, learn from other start-up stories, ask questions and hopefully they will achieve what they have set out for.

One thing I like to do is study failed start-ups, infact I study them as much as I do successful startups. When I read about Mint.com, which is a fantastic company by the way, I also like to read about Thought Inc or playcafe for example. A friend of mine once asked why I was reading about a man investing all his life savings in an idea he has only to see it fail in only a few months. He reckoned that would be too painful for him to read and would put him off ever wanting to build a start-up. Not me. When I read about failed businesses, I actually study. I study how they started, how they sought funds, what equity did they give out? did they even get funded? all these questions and more are what I ask myself while doing this ‘postmortem’.

I am currently working on a startup as well, so you can understand why I would want to know what others have done wrong just so I won’t make those mistakes myself. While many mistakes to one startup might actually be a good move for another, it is up to you to sort through the list and decide which is which with respect to your own startup. Here are some things I have learned:

1.) Find a market for your product first. You would imagine that this is something everyone knows, but it will surprise you how many people fail to do a market survey before ordering the manufacture of 1 million pieces of their new product, or building a software that they like personally with the hope that others will like it. Many times this is born out of the thought that their ideas must be kept secret until the product is released. I disagree with this reasoning. It’s always a good idea to check if people will buy your product, find yourself a customer base, a group of people you can actually market to when it’s time to start selling. What if you invest all this money into the business and find out no one really finds it worthwhile? You’ld have wasted money and valuable time.

2.) If you don’t find the right people, chances are you’ll fail. Simple as that. It takes a skilled sailor to successfully navigate troubled waters and trust me, startups are ‘troubled waters’. I have worked in a few and currently am so I have seen the high tides and low tides. You need the right people on board should in case you encounter unexpected snags. Those times when an investor who promised to invest suddenly pulls out in the last minutes, when you get hacked in the least expected time or when you experience a DoS attack, will you have people to put it right?

3.) Having too much money or not having enough. I know these are two ends of the stick and so you might wonder why I have the two. Have you ever had something too sweet? or had it too bitter? both aren’t as good as having the right balance. When you don’t have enough money, it’s obvious to see how failure can spring up there isn’t it? you don’t have enough to pay your team members, no money to advertise or market your product, no money to keep the servers running etc… these are all obvious. How about having too much money. Ever heard of Monitor110? classic case of having too much money. They apparently raised about $20million in their 3 rounds of funding and still didn’t succeed. Just like me you are probably thinking what the heck? if I had all that money, there’s NO WAY I will fail or not succeed with my startup. The truth is that often times when these people have all this money, they forget the little things and instead start splurging on things that are not even necessary. They will probably go advertise on the biggest TV networks, wall street journal, websites with unrealistically large following and forget to come up with a little feedback page or an interaction outlet between them and their customers. I am not saying it’s a bad idea to advertise on Newsweek, if you have the money and your market happens to be readers, then by all means go ahead! Just don’t forget the little things that happen to be terribly important. Sometimes when you have access to so much money, you might even lose focus and forget the origin of the company, how and why you started it in the first place. Everyone’s idea changes and it becomes all about the money. If you have all that money, why not spend it on strengthening relationships with customers, starting contests and giving away free stuff to winners, why not spend on gift-cards for the most active customers you have etc… Advice: keep up the channel of communication with customers, get the money that you need and not much more. These will keep you grounded.

4.) Marketing is just as important as developing. Never neglect the marketing end of the process. Your development and marketing should go hand in hand. When you are bringing in the best coders around, also make sure to bring in kick ass marketers. If you need some leads, I will be glad to point you in the direction of a few people. Merely creating a Google Adwords campaign isn’t marketing, neither is creating a Twitter account to follow people and hope they follow you back. It’s a lot more comprehensive than that. The emergence of social media has made it alot easier to connect with your fans/customers as well as new ones, but advertising is still a major part of Marketing. PlayCafe failed in this department and despite all the money they had in their disposal, they never really got their Marketing right.

5.) Lack of Organization kills startups. Lack of organization kills anything, period! It’s important early on to get the right people doing the right things. Negotiate you equity vs. investment appropriately, have an actual CEO on board when the time comes (if you know you can’t handle it- and most entrepreneurs can’t if we are being real) and most importantly create a business plan and follow it. The business plan that you submit when you are looking for investment should be different from what you are using as a  guide for yourself. The former is more optimistic that it actually should be and the later must be more realistic.

The more you know about start-ups, the better equipped you will be as an entrepreneur. Take time out to study different startups, read their stories to understand what makes them solid, also pay attention to those that have failed or aren’t doing quite well. It will give you a better understanding and appreciation for what Entrepreneurship is really about. That’s the beauty of it.

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