In previous posts I have eluded to the scary part about joining a startup company. Playing entrepreneur is one thing, jumping in head first and going all in is completely another. Knowing the failure rate of an early stage startup is something a person needs to understand before making this jump. Many cities have a challenge finding good talent in the startup world. Recently the CEO of Rivalry Jon Birdsong eloquently described the situation in Atlanta HERE. With the mix of tight funding, a talent crunch for tech and environment of the unknown makes for a serious uphill battle.
Understanding the risks is one part of the equation. Accepting accountability for the success or failure of your product or efforts is also part of the deal. What happens when you start hearing about the realities of your baby (product). Failing Fast is important and shifting the direction of your concept is vital to the survival of the company. Even if that means the demise of a role within the company. Typically, the person on the front lines gathering intel and feedback from customers is typically the person who can figure out the direction of the product the best. Most of the time this should be the CEO or Biz Dev person.
When your company feels it is ready to take the product to market, do so aggressively do not be passive. Get the product in the hands of everyone that will use it. There will be many opportunities for feedback either from what customers tell you or more importantly what they don’t tell you. The devil is always in the details. If you run into to many barriers of entry it may be time to go back to the drawing board. One major signal is a pricing objection. If you are getting in front of a bunch of people and never get a price objection, that is a strong signal that you need to pivot .
Let me elaborate, when you are consistently arriving at the price negotiation stage with your customers it means you may be on to something. If you are not getting here this means the customer does not see enough value in what you bring to the table or they have a similar solution that they do not see the value in changing from. Overcoming objections and learning from them is one thing. At some point, the product needs to sell itself. Keep in mind that potential customers are eager to get to the price stage if they want the product. It is typically the only stage in which they have control of the situation it is a very important stage that will tell you a lot.
Accepting accountability in any organization is a big part of personal and professional growth. With limited seed funding available, that may mean making some tough choices as development costs will take priority over everything else, as they should! If you do not fit in to developing a better product (technically) for the customer, this may mean you need to step away or your position will be eliminated. This is a reality, as it should be in any position in a startup or in the corporate world. For many people this is a tough pill to swallow. I have struggled with this portion for years. For me, if you are stagnating at a cube in a corporate environment and not adding any value collecting a pay check I would challenge you to step up.
This means many things for many people but you will know your boundaries, try to cross them. Ask a question in a meeting, take on that new challenge that you know you could do but don’t think you will be called upon. Do Something! If you fail, good for you. Learn, Grow and know that you tried to make a difference. You will be much better for it, trust me I fail a lot.
What else is involved with the fear of failure? What are some of the factors that are in play? How much risk is too much risk? How do you hedge the risks you take? I would love to hear from you.
I am going to suspend the history lesson for a moment. I wanted to share some comments on the art of pivoting . In the corporate world being able to pivot can take years if not decades. Notable exceptions are of course Apple , IBM etc.. In a startup you sometimes will have to pivot and pivot quickly. A very good example of recent pivot came from Groupon. Basically a pivot is to change the course of a product or service based on the needs of your potential or current customers. This modification may take place based on feedback from customers or a new feature added to an existing product that changes the course of the business model.
I found many times in the corporate world people would often times get frustrated when an obvious opportunity evolved from changing a legacy business model. Often times senior management was unwilling to “rock the boat” or try new things. This typically leads to a slow and painful death for the company or its growth and often times leads to employees leaving.
I am learning that it is ok and very necessary to pivot. I have been fighting the urge to hold on to an original business model and try new things to see how they resonate. It was the way I was raised in the corporate life. It is ok not to pivot sometimes for a tried and true proven model. There is certainly something to be said for holding to your core values as a company, but not in all cases see Kodak and many others.
We recently may have stumbled on to a potential home run at Flashissue by listening to our clients needs. One thing to remember about a pivot. Not all pivots are successful. Listening to the clients needs are paramount that will typically lead you to a successful product change. Holding on to an old inefficient business model never serves the client or the company well. Learn to listen, learn to change and be nimble or you in turn are learning to fail. Not all great ideas succeed but you will have a better rate of success by executing on the needs of your clients.
Any other thoughts I may have missed? Have you ever observed a pivot in the corporate world that worked?
In my previous post I shared my first failure. It would be the first of many. After I accepted bootstrapping my own company was not in the cards at the age of 19, I was trying to figure out plan B. I knew I could not flip pizzas my whole life. Although at the time, it was paying the bills and I ultimately made some life long friends doing it. I needed to make a big move. I needed a fresh start.
I was looking around for a few days and then I saw it. An ad in my favorite publication (at the time) Car Audio magazine. It was an ad for a store in Chicago. The job description fit me like a glove except for the 10 years of experience part. I talked to my mom and she said go for it. Ok the next problem, I was flat broke. I needed a place to live. I called my aunt and uncle who lived in the area and they agreed to let me stay until I got on my feet. Now, all I had to do was get the job. A few interviews later, the job was mine and I was moving to Chicago. To make a long story short… 4 months later I was out of a job. The abbreviated version was I simply did not have enough experience but I learned a ton. Failure number two, the time with my aunt and uncle was a time I will never forget. They did not have to do that, and I will always be thankful for giving me the opportunity.
I returned back to the Quad Cities for two weeks. It did not take me long to re-group. I was not going to give up. I found an ad for a job installing car stereos for a company called Circuit City. The ad stated they were willing to train and teach. It sounded perfect for me. At the time I had no idea what Circuit City was, but they were a larger retailer and were growing fast. The job was again located in Chicago. It was quite a ways from my aunt and uncles house. Luckily I had another aunt and uncle who lived in the general vicinity of the store they were hiring for. They graciously offered me a room for a few months. Long story short. I interviewed and got the job.
Time to move back up to Chicago. I packed everything I owned and made the 4 hour drive back to Chicago. Exhausted from the drive and the stress of trying to make my vision happen my relatives welcomed me with open arms that night. They gave me a meal, and we chatted about my game plan and set goals to move out on my own. It was important for me to tell them I would be out soon. They were more than accommodating and knew I was serious. They told me not to worry about the timeline and to just do what I could. I agreed and went up to bed exhausted. At 6am I was awakened by my uncle. This was unusual since it was Saturday morning. Uncle George said that there was a police officer outside that wanted to talk with me.
In a sleepy groggy mess I stumbled outside. The officer pointed to my little Honda Civic and asked if that was my car. I replied “yes what seems to be the problem?” He said you may want to take a look inside your car. I walked over to the car looked inside and there was nothing in it. I looked down the street and there were a few of my clothing items laying around. I fell to my knees. Everything I owned was in that car. Clothes, all my notes from school, my tools for work… everything. I was crushed. I just wanted to jump in my car and head back home. But I did not……… To be continued….
In my last post, I talked about making the jump from the corporate life. This week I am going to try to do some soul-searching and replay some history on how I got here. Once I (barely) graduated from high school, I wanted to something big ( at least in my mind). To me, at the time “big” meant anything to do with loud car stereos. I touched upon that in my last post. The feeling I got from a finely tuned auto sound system was intoxicating. I liked flipping pizzas, but knew that was not going to pay the bills for long. Also, I doubt it would support my habit of louder sound systems. Why not start my own business? Sounded like a great idea at the time! My best friend and I put together a plan to get a business loan and start a company. We literally walked into a bank with no business plan and literally asked a guy for 30K to start a business. Pretty funny huh? We did not think so at the time we were dead serious.
Unfortunately, so was the bank. After about 20 mins of a loan officer probably hold back tears of laughter at us. He finally broke it to us gently. He would not be loaning us money. Ok, plan B. Let’s just find a location and bootstrap ourselves. Easy right? Our parents were very supportive. They said “yeah sure, run out and sign a commercial real estate lease” “no problem knock um dead”. I still remember the look on their face when we came home and said “ok we got our shop! We had confidence, we had moxie, we had no idea what we were doing. This is how it happened.
After the bank episode we re-grouped. A few weeks later we walked into a business in Davenport, Iowa (VTR TV repair) and convinced they guy to rent us his three bay shop in the back that was vacant. We had no first months rent. We would just pay him as soon as we could. I don’t remember if it was my smooth talking Tim’s or what, but who cares. Ok, we were in! Next problem. We knew how to work on our cars just not anybody else’s Hmmm ,may need some help with this one. Being the scrappy passionate guys we were we found our solution. In the back of a Car Audion magazine that we frequently read was an ad that solved all our problems. The school of Mobile Electronics Installation Certification Program. The program was two weeks of a crash course in Daytona Beach, Florida. After begging our parents to loan us the money, they saw our passion, let us go, and off we went.
The road trip from Rock Island,Il to Daytona Beach, Fla was one we will never forget. It was a two day drive. When we entered Daytona something was not right. It was March of 1993 we had no idea what we were pulling into. I will never forget. We pulled in on a Sunday. The last day of “Bike Week” in Daytona. At the time, we had no idea what this was, or what the next day would would signify. What I am referring to of course is spring break. And not just any spring break. Being from Rock Island, we never heard of spring break. Let me take you back. Think MTV, Think Snoop Dogg , Dr. Dre, Adam Sandler early years, think of the debauchery and mayhem that was going on during that time. Yes, MTV spring break was on site, and it was basically right outside our door. Yes, our hotel was right on the beach (came with the tuition). Funny thing was, Tim and I were the first one to class every single day. We studied harder for that class than any high school class we ever had. We both graduated at the top of the class and were coming home armed with (in our minds) life changing knowledge about our craft. I think it is fair to say. The vehicles we put together were some of the loudest and most incredible sounding hacked together vehicles in the city. A we had a crew of friends that helped us keep it that way. I will be forever grateful to all of you. ( And you know who you are) Don’t get me wrong, we had some fun in Daytona, but we were focused on our goals. Long story short, the business was closed in less than 4 months. We were defeated, but not going to be held down. Traffic Jamz will still live on in our hearts. The next phase was a bigger move ….stay tuned for the next chapter…
So as I begin to blog my journey from corporate life into a concept that I absolutely fell in love with. I do what any clueless beginning writer does. Google the topic I want to start with. What is the first thing that I see? The 5 pitfalls of jumping from corporate to startup well that’s just peachy!
As I read the article, I do a mental checklist making sure I do not fall into the traps associated with the article. (Of course after I have already made the jump cause that’s how I roll) . Not that I jumped in without doing research. I talked with very trusted friends and family. Talked with carefree people and conservative folks alike. Everyone I spoke with, all of them, said the same thing to me. “Eric it’s time for you to do this”.
Comforting? Not really. It was nice that everyone believed in me. It means more to me than they will ever know. This move to me is big, my wife and parents will probably smile if they ever read this because looking back this behavior is not new. In retrospect, I have done it from the early stages of my career and just never realized it ( which I will chronicle in future posts). You see when I was 18 I thought I had the world by the cojones. I had it all figured out. I would leave my small town home of Rock Island, IL, move to Chicago and install car stereos for a living. You laugh, but during this first stage of my career I was mentored by some pretty incredible people early in my career. If you have ever read the book Good to Great it chronicles the early 90’s successes of a company called Circuit City. Well that’s where I went to install car stereos. I took the risk and that experience literally changed my life. I never got the chance to share my gratitude with the people who I learned from and were mentored by. Later in my corporate career I always tried to “pay it forward” to the people I eventually was fortunate enough to manage. I tried to believe in people, when they did not believe in themselves, I pushed people to do things they never thought they could do. I recruited the underdog that always had the fire but may have been overlooked. I tried like hell to make that person shine among their peers. All of my good intentions with my people, the successes, the failures the track record that I had tried to establish. It all means nothing at this moment. That is what you truly you need to embrace when you make this jump. Take your experience, but check your ego, your “track record” and your sense of entitlement at the door.
This blog will hopefully chronicle the good the bad and the ugly of this journey. In a start-up environment I know this journey could last a few months. If you are thinking about the same move you need to accept that reality. Everything is not as glamorous as Shark Tank . This is real, not edited. It is time for me to take a bunch of my own medicine that I tried to instill in the people I have coached. Believe in myself, educate myself to the best of my ability, leave “everything on the field” surround myself with the most talented people I can possibly find, execute, and above all… pour every ounce of energy listening and focusing on our customers needs!
Would love to hear some words of wisdom from others who have made the jump. What else should I think about? Anything to avoid? Best Practices??
Thanks for reading,