Frequently Asked Questions
This page has questions I am frequently asked and my answers. This is kind of a primer, too, that could prepare you to be mentored. If you cannot find an topic on this page, feel free to Submit A Question to me. This information is provided subject to this entire site's disclaimer.
IDEA
Q. I have an idea for a new business. Is it any good and will you meet with me to discuss it?
A. Ideas are a dime a dozen. Success is more about execution. Also, greats ideas often do not translate into great business opportunities. Many of the failures in entrepreneurship could be avoided by choosing a better idea for a new business. Sometimes I can find in 60 seconds or less with simple Google searching that an idea is not a good one. A more sophisticated and thorough way is to read The New Business Road Test by John Mullins and take your idea through the 7 domains that form the nucleus of his book. Mullins' website covers a lot of the ground. I am happy to exchange emails with or meet in-person with an entrepreneur after they have read this FAQ and are certain that their idea is a good business opportunity based on their own research.
Q. Should I start a business right out of college?
A. Of the 100 would-be entrepreneurs who think they should, I estimate that less than 5% should start a business immediately. Most should go work and learn how to manage people -- whether the learn what not to do from a poor manager or what to do from a good manager. People management is the single largest deficiency in entrepreneurs. Founder-entrepreneurs, especially the founder-CEO, need to be "pied piper" leaders whose people will "go to the mat for them." However, those select few who should start a business while in school or just out of college know who they are -- they simply can't do anything else.
Q. What type of business should I start?
A. There are 4 types of entrepreneurship (per Steve Blank): small business entrepreneurship (lifestyle companies), scalable ventures, corporate entrepreneurship (intrapreneurship), and social entrepreneurship. It takes a tenacious entrepreneur to start each type. Each is a quest for a winning business model. The results, however, of each are different. I estimate 98% of the new startups are small businesses with a goal of providing a salary to the founder(s). Relatively few are scalable ventures, which aim to create wealth and change the world. Most of the attention and risk capital in the U.S. goes to these ventures. I will ignore corporate and social entrepreneurship in this response. Since time is our precious commodity, I choose to spend time on scalable ventures due to higher returns and more sweeping results. However, starting and maintaining control of a successful lifestyle company is a great endeavor.
Q. What is the meaning of scalable (i.e., what is a scalable venture)?
A. The simplest explanation which seems to resonate with most people is this: a scalable venture is one where as revenues increase the FTE (full-time equivalent) head count grows more slowly. Over time the differential in charting the revenue and headcount increases. Software and consumer product business are good examples. Consultative business such as law firms and accounting firms are example of non-scalable businesses, unless they productize their services.
MODEL
Q.
A.
RAISING CAPITAL
Q.
A.
MISCELLANEOUS
Q. Do you have a reading list or recommend certain books?
A. Yes. Reading excellent books prepare one for being mentored. My reading list is here.
Q. What type of business entity should I use?
A.
Q. How does our founding team work out ownership splits?
A.
Q. Do I really have to do financial projections?
A.
Q. How can I find good service providers (lawyer, bookkeeper, accountant for tax return, etc.)?
A.
Q. I am starting an Internet/software/SaaS company. How do I find a tech guy?
A.
Q. I am ready to take sales to the next level - how do I find a sales leader?
A.
Q. I have an idea for a new business. Is it any good and will you meet with me to discuss it?
A. Ideas are a dime a dozen. Success is more about execution. Also, greats ideas often do not translate into great business opportunities. Many of the failures in entrepreneurship could be avoided by choosing a better idea for a new business. Sometimes I can find in 60 seconds or less with simple Google searching that an idea is not a good one. A more sophisticated and thorough way is to read The New Business Road Test by John Mullins and take your idea through the 7 domains that form the nucleus of his book. Mullins' website covers a lot of the ground. I am happy to exchange emails with or meet in-person with an entrepreneur after they have read this FAQ and are certain that their idea is a good business opportunity based on their own research.
Q. Should I start a business right out of college?
A. Of the 100 would-be entrepreneurs who think they should, I estimate that less than 5% should start a business immediately. Most should go work and learn how to manage people -- whether the learn what not to do from a poor manager or what to do from a good manager. People management is the single largest deficiency in entrepreneurs. Founder-entrepreneurs, especially the founder-CEO, need to be "pied piper" leaders whose people will "go to the mat for them." However, those select few who should start a business while in school or just out of college know who they are -- they simply can't do anything else.
Q. What type of business should I start?
A. There are 4 types of entrepreneurship (per Steve Blank): small business entrepreneurship (lifestyle companies), scalable ventures, corporate entrepreneurship (intrapreneurship), and social entrepreneurship. It takes a tenacious entrepreneur to start each type. Each is a quest for a winning business model. The results, however, of each are different. I estimate 98% of the new startups are small businesses with a goal of providing a salary to the founder(s). Relatively few are scalable ventures, which aim to create wealth and change the world. Most of the attention and risk capital in the U.S. goes to these ventures. I will ignore corporate and social entrepreneurship in this response. Since time is our precious commodity, I choose to spend time on scalable ventures due to higher returns and more sweeping results. However, starting and maintaining control of a successful lifestyle company is a great endeavor.
Q. What is the meaning of scalable (i.e., what is a scalable venture)?
A. The simplest explanation which seems to resonate with most people is this: a scalable venture is one where as revenues increase the FTE (full-time equivalent) head count grows more slowly. Over time the differential in charting the revenue and headcount increases. Software and consumer product business are good examples. Consultative business such as law firms and accounting firms are example of non-scalable businesses, unless they productize their services.
MODEL
Q.
A.
RAISING CAPITAL
Q.
A.
MISCELLANEOUS
Q. Do you have a reading list or recommend certain books?
A. Yes. Reading excellent books prepare one for being mentored. My reading list is here.
Q. What type of business entity should I use?
A.
Q. How does our founding team work out ownership splits?
A.
Q. Do I really have to do financial projections?
A.
Q. How can I find good service providers (lawyer, bookkeeper, accountant for tax return, etc.)?
A.
Q. I am starting an Internet/software/SaaS company. How do I find a tech guy?
A.
Q. I am ready to take sales to the next level - how do I find a sales leader?
A.