This interview speaks to what is needed is to begin scaling and targeting companies that have some product market fit and are ready to begin growing.
What's your business, and who are your customers?
We help businesses with 5 to 200 employees scale their business by installing all the systems needed for strategy, management, metrics, process improvement, budgeting, and human capital.
Tell us about yourself Bob
As a serial entrepreneur for 14 years, I built and sold four different companies, returning 25x ROI to my investors and over $1 billion in profits.
What's your biggest accomplishment as a business owner?
Disrupting the real estate industry by creating the first high-definition, remote touring for residential real estate. Also disrupted financial services with five different products and created The CEO Boot Camp (2004), where we have trained thousands of CEOs and entrepreneurs in best...
Prepare for years in advance by study and experience in management, leadership and smaller companies. Read 2–4 books per month. Always be learning. Now, you can build a tiny house alone, but building a significant company requires a team without about 20 different skills that no one person possesses. Many think they can build a skyscraper alone, even without capital! Dumb. A formula for disaster and why 85% of new companies fail. It takes tremendous commitment and perseverance and is always a rollercoaster ride. Almost never a straight, predictable, linear process.
Here are some great educational sources I have created to solve this exact problem click here to check
All entrepreneurs and CEO must be committed to life-long learning. After 31 years as a CEO it gets hard to find and learn new things, but the world changes and there is always something new to learn. Most success comes from great strategy and great team....
No good investors would want to invest in a company where the CEO did not have their head around the capital needed. A financial projections and plan is required to even get a meeting with most investors. That said, there can always be some back and forth negotiations. A VC might want to put more money in to scale faster. A CEO wants minimum dilution and to get the valuation up by achieving key milestones like MVP, traction, team building and quantification of customer acquisition costs. All of these reduce risk and hence increase the share and valuation price.
Pre-seed means smaller amounts and lower valuations because the risks are high. Contrary to popular belie, very few VCs do these stage deals, unless it is a team that has made lots of money for investors before. Typically, these rounds are $250,000 to $500,000 and done by angel investors.
You can see my free webinar on preparing your company to raise...
If you have to ask this question, you are likely not passionate enough or ready in other ways to do this. The commitment to any startup is likely five or more years. And long working hours that can easily be sixty-to-eighty-hour weeks at times. As a result, you need to know for certain you would both enjoy the work and are qualified to do the job offered. You also need to do your due diligence to understand the company’s team, finances and chances of success. About 85% of startups will fail. Just a fact.
Asking about a specific company is almost not relevant because the decision process for you is the same and we (advisers here) do not know your background or private information about the company. Nor did you say if this was a promotion, good salary, equity offer, no pay, or whatever. All 100% relevant to any answer.
My main career advice to people is, “Always be learning”. By increasing your knowledge and experience, your market value and options will go up....
Crowdfunding has a place, and I am excited about its growth possibilities in certain areas. The funding raised has been about doubling each year for some time now.
It is generally for consumer-oriented companies where the vote of the consumer matters. This is a test of the product demand as well as a way to raise funding for a production run of an early version.
Recently the amount that could be raised was increased to $20 million via crowdfunding and the amount of fraud has been low. Of course, the average consumer does not have the skills to evaluate a company, team, market opportunity, and strategy well. And this takes real work. So essentially, they are just betting on the product concept. And since the amount of money raised is generally small (~$100K-$250K) it is enough to replace the traditional “Friends and family” money when the founders have no wealthy family or past success to roll their gains into the next business.
Of course, even professional venture...
There are five key areas in most business plus the softer skills of management, leadership, hiring and creating a productive culture. The five key areas are:
A new venture needs slices of expertise in each area with a senior person that has 5+ years full-time experience in each on tap. Initially the development of the company is mainly about #1 and #3, which Peter Drucker the father of management says are really the two key functions. This is true because they require more creativity and top people.
In addition, under these categories of business there are about 30 to 40 more detailed level skills needed to grow any company. For example, marketing would include: branding, strategy, graphics design, SEO, PPC, copywriting, web page programming, etc.
I created a course to review these skills that is about one hour and free here:
This is about growing significant businesses and building...
Firstly, these are two very different things. A BOA is usually a domain expert while a BOD member may bring skills like finance, sales, operation, scaling, marketing or other expertise. Too many boards are dominated by investors who only know finance.
The right time to start is yesterday. Usually as soon as you are clear on the mission of the company, which allows you to build out the skills you need on your team. It takes time and patience to develop a BOA member. Few want any formal connection until some value has been built, as the risk is so high, like 90% that the company will go nowhere for a long time. You can work with them informally and work your way up to something more formal when needed.
An informal Board of Advisers (BOA) can be started very casually and develop over time. Start with lunch and discussions to get their input of the business plan. Tell them everything, hold back nothing. Be vulnerable to show you are coachable and will listen to people with other...
Absolutely. That is called a “niche” and often is the intersection of a vertical market and application/problem. And even smaller is okay and sometimes an advantage in the beginning. Of course, you also need a vision and steps into larger markets. Generally, $1 billion minimum if you seek institutional capital, as they only invest in companies that can reach $100M in sales after 5–6 years.
Even if your price point is $250 that’s a $12.5M market opportunity. Which may be enough to validate your product, tune it, prove your value proposition, price point, marketing, and sales economics to raise funding and go after larger markets.
An MVP and initial market entry is best smaller, so you are not facing competition from much larger companies and can be the only solution to that problem in that niche. An ideal market size is probably $100M to $250M, but is fine as long as your offering is unique and has some barriers to entry.
Tesla’s first product, the...
Contrary to popular belief, growth is not just limited by your ability to increase sales. It is almost always capped by many other things like management quality, financing, operations, training systems, hiring and other systematization. Many companies have gone bankrupt by simply increasing sales. When this happens without getting ahead of problems with customer service, production, working capital and financial controls, companies can not just ruin their reputations and spiral down but even go bankrupt.
If you are lucky or smart enough to have a product or service with a large market opportunity, your company’s growth will be mainly limited by your ability to hire and keep top people, especially managers. Building a high-performance and innovative culture is usually key to growth. This means having a vision of the future and solving big problems for people. And giving your employees good reason to care about their job and work too. Simon Sinek’s...
I believe a minimum of 25% should be planned for in growth as anything less will likely leave you behind competitors and being a follower, not a leader in the marketplace. I consider “Scaling” to be growth of 50% or more annually. That is far more difficult and requires a quality management team, strong internal processes (systematization) and likely some capital investment in addition to cash-flow.
If you can reinvest your cash-flow and/or get some low-cost debt, which usually requires at least eighteen months of profitability, you can maintain control and avoid the time and complications of raising outside capital. If your market opportunity has a limited time window, you would probably be better off raising some capital and growing faster.
You may also be able to create growth by getting better payment terms with vendors who may have a much lower cost of capital than you and wish to see you succeed, so you can increase purchases from them too. As a company...