SCORE.org Presentation on Startups and New Businesses
SCORE.org – No Startup Left Behind
I was recently asked to be a guest speaker at a SCORE.org event in California for the Capitol Corridor region. As per their website, SCORE is the nation’s largest network of volunteer, expert business mentors, and is dedicated to helping small businesses get off the ground, grow and achieve their goals. Since 1964, [they] have provided education and mentorship to more than 11 million entrepreneurs.
The talk was based on several chapters from my new book, No Startup Left Behind: Learn How to Launch an Idea and Skyrocket to Success During the global pandemic, millions of small business owners have faced unprecedented challenges keeping their doors open, employees safe, and cash flow coming in. Moreover, millions of people who lost their jobs due to the global, multiyear long situation, are now considering starting their own small business in the hope to create an additional income stream for themselves and their families, while launching in their local communities.
My goal for the talk was to highlight a few keys to how one might approach starting a new business – how to spot a ‘good’ idea, how to price your product by design, how to use the 5 W’s to win a sale, how to effectively measure Return on Ad Spend (ROAS) in your marketing, how to improve the customer experience journey with G.P.S. Rank (Goals, Problems, and Solutions), and what to do first when launching a new startup.
I began my presentation off with one of my favorite quotes from Reid Hoffman, “If you’re not embarrassed by the first version of your product, you’ve launched too late.”
I proceeded into my next topic which is a bit thought provocative at first blush, Do ‘Good’ Ideas Even Matter?
As the facts point out (from GEM Consortium and WSJ), 100 million companies are launched annually on a global basis. 75% of Venture Capital backed startups fail. Which means that most product ideas simply don’t gain sufficient traction since launch to truly scale and becoming self supporting ventures. The fact is, most startups and small businesses require years of experimentation and pivots of their initial markets/models/business plans to find some success or profitability, to unlock the coveted Product-Market-Model fit.
As the traditional Business School model, which was once heralded as the way to launch a business – a Ready, Aim, Launch approach, that included a well-thought out, extensively written formal business plan (often 30-50 pages), hiring plan, stock offering term sheet, and 5 year proforma financial analysis – today’s Silicon Valley model is markedly different in design, simplicity, and execution.
Today’s founders prioritize speed over preparation, scale potential over product-market-model fit, and valuations over profitability. Silicon Valley’s Ready, Launch, Pivot! approach has become the de facto modus operandi for startups globally looking to attain massive valuations with large exit potentials.
The question is, is this new Silicon Valley growth focused model healthy as a playbook for the average small business? What keys can we learn from it to apply on a smaller scale in our local business ventures and smaller communities? Should we find a different path that favors profits over borrowed investor capital, customer relationships over global scale, and slow, steady growth over warp, VC-backed speed?
I implore entrepreneurs to find what works for them, by first thinking about the end and working their way backwards. Rhetorically asking them, what kind of life will this business provide for you? Do you visualize this outgrowing your local community or would you be happy with simply running a successful coffee shop over building the next Starbucks empire?
Without seeing where we want to really go, we can easily fall for copying the model of successful VC-backed stories we read in the latest issue of INC magazine or the Wall Street Journal – intoxicating, exciting, memorable, yet that rarely work for the small mom and pop.
I next asked the audience, “What does a ‘good’ idea really look like to you?” – the answer, I continued, depends on what you want.
You could build a VC-backable business that does between $100k-$10M in revenue per month, or a SMB (small to medium size business) that does $100K-$1M per month, or a Lifestyle Business that generates $25K-$100K per month, or even a profitable Side-Hustle that yields $5K-$25K per month. The choice is yours, but the way in which you design, build, launch, adjust and scale each differs significantly – there are different mechanisms, key performing indicators, capital requirements, tradeoffs, and sacrifices that each require depending on their growth potential and your intended desire. No Startup Left Behind outlines how you can navigate that decision to find the best style venture for you and your goals, how to get to market quickly, generate early traction and measure results effectively. Should you decide you want a VC-backed venture, I outline several methods to follow and how to understand the decision making process that investors follow to make their investing decisions in portfolio companies.
I continued my talk with a deeper exploration of the aforementioned topics that all founders will face once they eventually launch (regardless of growth potential) – to find early customers, build early sales, simplify their operations to scale, and pivot when their thesis don’t work out as planned.
Today’s challenging market environment has put a damper on many companies’ ability to continue to find profits, launch new products, and hire effectively. It appears to me that the pandemic recovery will come in ebbs and flows – getting better in more of a zigzag pattern than a straight-line, as countries face mutating variants across the seasons. For many, this will be a headwind that stifles their ability to be creative and find new ways to innovate and grow. For others, it will unlock new opportunities and force them to innovate in divergent ways in order to thrive in the ‘new’, ever-evolving normal. Regardless of how you view the current climate, entrepreneurial leaders of every size, type, geographical location and venture type are having to adapt to the circumstances and find a way to just make it work.