Saturday, January 31, 2009

Leveling the Field

I've been a bit quiet lately, so apologies for that. I've been focusing on a few things ... like getting closer to launching. I'll post more on that soon, but I have a different topic that I want to cover today.

One thing that has always frustrated me as an entrepreneur is the advantage that business people seem to have. Although Groupthink is my eighth startup (and that's not counting Puzzazz), I've never been a business guy and it seems that there's an inherent bias in the startup world toward business types. I say inherent because I don't think it's intentional -- I think it's just that business people have their own language and their way of doing things and it permeates communication. So, despite the fact that I have a great network of contacts, including angel investors and even a few venture capitalists, I've always felt like I've been at a disadvantage.

A while back, when I was working on a business plan for a potential startup, I met up with someone who was also working on a business plan. He was a marketing guy, with limited technology knowledge, so it seemed that we could help each other. His business plan was gorgeous and read well, and it had all the right revenue projections and graphs. Now I'm no slouch as a writer, but mine was dreadful. My plan had accurate descriptions and diagrams of the architecture of the system that I planned to build, and I had a working prototype to go with it. And his plan? He also had some architecture diagrams, but they were basically fiction. I pointed that out to him, but he said it didn't matter -- they were just placeholders and investors wouldn't care. Guess which company got funding?

I'm not saying that technology people like myself are dismissed entirely, but it's certainly a much easier road for people with a business background.

So, I was really pleased to hear about the details of the Northwest Entrepreneurs' Network's First Look Forum (FLF) earlier this week. The FLF replaces the annual Early Stage Investment Forum (ESIF) that NWEN used to run, with some big differences, the biggest one being that it's not an investment forum. NWEN properly recognized that there are already plenty of investment forums in the area, but there was very little for the stage before that. And they recognized that early stage entrepreneurs need more than money -- they need help. The forum is designed to:

  • Recognize early stage companies that show promise and could benefit from the process.
  • Help the companies to take their idea and make it presentable, through intensive, personal coaching.
  • Provide presenting companies an audience of qualified angel investors that they can present to and network with.
  • Provide those angel investors with interesting opportunities that they probably haven't heard about before.
What I like most about the FLF is that you don't need a business plan. Instead, they want people to answer five straightforward questions (paraphrased):
  • What's the Market and Opportunity?
  • What differentiates the concept from others?
  • How can the business scale?
  • What traction do you have so far?
  • Who are you? What's your experience?
I look at this list and, unlike a formal business plan, I think: I can do this. To me, it levels the playing field, allowing me to leverage my strengths without having to suffer because of my weaknesses. It's almost like they designed it for people like me (and maybe they did). The FLF will have a winner that wins some unspecified "fabulous prizes." Sure, I hope to win (we all do!), but I think I'll be a winner no matter what stage of the process I get to. If you're one of my potential competitors, good luck. And, if you haven't signed up yet, do so quickly -- they have limited slots and they were more than half sold out as of Tuesday night.

Note: Earlier, I said I wasn't going to write about the fundraising process. This blog post doesn't change that. I'll probably write more about the FLF as I go through the process, but I still won't blog about fundraising itself.


Tony Wright said...

"If you work your way down the Forbes 400 making an x next to the name of each person with an MBA, you'll learn something important about business school. You don't even hit an MBA till number 22, Phil Knight, the CEO of Nike. There are only four MBAs in the top 50. What you notice in the Forbes 400 are a lot of people with technical backgrounds. Bill Gates, Steve Jobs, Larry Ellison, Michael Dell, Jeff Bezos, Gordon Moore. The rulers of the technology business tend to come from technology, not business. So if you want to invest two years in something that will help you succeed in business, the evidence suggests you'd do better to learn how to hack than get an MBA."


A great business guys is hugely valuable. They can make a great product into an empire and turn a mediocre product into a solid business. But given the stat above, I'm not sure I agree that the playing field isn't level.

As an aside, I think the fact that geeks are so prevalent in business is a good sign. It's a learnable skill. Just like good software it requires building, testing, and iteration.

Roy Leban said...

Thanks for the thoughts.

On the MBA issue, I didn't say MBA -- you can be a business guy without an MBA, just like you can be a computer guy without a CS degree.

Of the six people Graham lists, only Gates and Moore succeeded because of their technical skills. Bezos and Ellison have a technical background but succeeded because of their business skills. And, Jobs and Dell are business people who had an interest in technology.

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