It’s Virtually Business as Usual
First, the bad news: I have no idea where you’re going to get the money to launch that start-up business you’ve been dreaming about.
I know what you’re thinking: “Don’t they just hand you a stack of money if you bring them a business proposal with a ‘dot-com’ attached? Isn’t that how the so-called new economy works?”
What I can tell you from experience is that it never really worked that way, except for maybe a week and a half last year at the height of dot-com mania, and even then the investment contracts that got signed involved rights to first-born children and deeds to family homes.
But what about all those news stories about stacks of venture capital sitting around with not enough businesses to give it to?
The problem may be in the fine print at the bottom of those articles, which most of us are too excited to finish reading. You can still have all the money you want, of course, as long as you don’t really need it. You can still get that critical money to get started--but only if you’ve already gotten started and can prove how much money you’re already making.
The same old conundrum is still at work no matter how new this economy may pretend to be. There really are billions of dollars waiting for the right ventures to come along and claim them. But as the gap widens between the ventures these capitalists consider “right” and the start-ups too broke to get started, the only real financial help will have to come from the same places it’s always come from: friends, family and fools.
I’m sorry for this last piece of news. And even sorrier for the friends and family members who want to help but don’t happen to have an extra $200,000 or $300,000 to help get you through the first year, even with a skeleton crew and no-frills office.
If you’re thoroughly discouraged by now, I may have one comforting piece of news: There are some people trying to change all this.
Last month in a San Francisco hotel ballroom, more than 1,000 people gathered to hear panel after panel of the Silicon Valley’s gurus of high tech. They strained to catch every piece of advice from these venture capitalists, bankers, accountants, attorneys and successful entrepreneurs. After all, these were the deal makers behind Yahoo, America Online and EBay, to name a few. Instead of just hearing about how much money these superstars went on to make, the audience was reminded that these giants were once start-ups just like the ones they themselves are trying to launch. The question on everyone’s mind was: Are there any secret formulas, any sure-fire insider tips?
Enter Guy Kawasaki, longtime Apple Computer evangelist and emerging champion of the high-tech entrepreneur. Using the example of his own company, Garage.com, Kawasaki encouraged his panel members to reveal as much as they were comfortable sharing--or a bit more--about how they make the big deals and what myths have to be overcome before real progress can be made.
At the end of the first day, while other attendees were eating and schmoozing, a crowd of about a hundred gathered around Garage.com’s president, Bill Reichert. He invited any and all to give him their 60-second “elevator pitch”--a rapid-fire recital of their business plan. One objective of this conference was to help entrepreneurs condense their proposed enterprise into sound bites that won’t overtax the attention span of a busy investor or influential executive.
Standing beside me in line was Monty McIntyre, an attorney specializing in settlements. His business card features a photograph of two hands shaking, and it reads: “SettleSmart.com: the online way to fast, fair and inexpensive settlements.”
“You’ve got to show them what your Web site is about at a glance,” he says. “Some people are condensing their whole business plan to fit onto a fold-over business card.”
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I left him about 30 people back in the line with a stack of cards in his hand and a look of sheer determination on his face. Having explored these general issues for long enough, I sought the answer I had really come for. What pearls of wisdom were there for the entrepreneurs of Ventura County or Santa Barbara’s ‘Silicon Beach’? Do Kawasaki and his crew believe it can only happen in the Silicon Valley?
“Don’t try to follow us too closely,” he says. “We’re just making it up as we go. The thing is, wherever you are in the world, you have a much better chance of being successful if you’re doing what you love.”
Reichert seemed even more enthusiastic about Southern California as a new Mecca for high tech: “L.A. has crossed the chasm. You definitely have critical mass between your venture capital groups and entrepreneurs. You’ve got a deep and broad talent pool and a world-class entertainment industry ready for digital content ventures.”
*
Still, as I looked around the room at the end of the conference, it occurred to me that speaker after speaker had emphasized the same thing: Only a handful of the business plans submitted to them are ever going to be funded.
Trying to visualize what this might mean to the thousand people who had come from all over the country, I wondered if there might not be a more fair way to deal with those who weren’t quite ready yet. Maybe the entrepreneurs with successful business plans could somehow be identified and invited to move up to the first three rows. The next 90 rows of entrepreneurs who weren’t going to be successful could then go home before they got their hopes too high.
Of course, this would be missing the whole point of the entrepreneurial quest. Long odds are not the issue. Even making a lot of money isn’t the issue for many of the people in that room. The motivation for all this may have more to do with the quest itself.
As I was getting ready to leave the next day, I saw McIntyre headed toward me with a huge grin and one of the conference’s real success stories.
“They loved my idea. They think it has potential.” I couldn’t help myself as I listened to him. As much of a long shot as it might be for the rest of us, somehow McIntyre’s success made it all seem worth it.
A good idea, a good plan, the right support--could it really be so hard?
