How Do I Start My Own Business From an Idea?

Well, I think the question is the wrong one to ask, really. It trivializes entrepreneurship. Would you ask, “How do I do my first brain operation?” Or “how do I play Carnegie Hall?  Nope!  The question should be what do I do to prepare to launch a startup?

First understand that ideas are literally worthless. The press promoting the concept that an "idea is worth millions" is a problem. Building a company takes many things, and the person with only an “idea” has no chance. It is typically a 3 to 5 year to turn an idea into a business. And that process will require hundreds of ideas, maybe thousands, and many skills on a team.

The truth is, there are hundreds of things you should do and learn before you even think and launching a company. Pretending it is one is ridiculous. And that is why over 85% of new companies fail. The number one reason for failure is underestimating the skills, time, money and team needed. 

When I launched...

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Simple, Yet Powerful Management Methods

There are far too many texts and systems on management, and I do not want to create another.  However, there is a simple and effective system I use that leverages many of these wonderful systems that can be anywhere from fantastic to disastrous in a particular situation.  In every case, some thought must be given as to which technique is appropriate for each special circumstance and individual. 

A simple, yet very effective, model for people management uses the following combination of well known management styles by selecting the appropriate method for each individual.  This is an easy model to understand and implement, and adjusts the management style to each individual's specific abilities and limitations.  In general, you are going to work very closely (micromanage) with anyone when they are first hired to help determine where they are on this scale and then move down the scale until you reach their current ability to perform.  Initial...

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Overloaded? Lead Your Way Out!

By Harvy Simkovits

Are you starting the new year over-extended, over-committed, overwhelmed, and over-stressed in your business? Maybe you suffer from being under-leveraged as a leader!

"Too much to do and not enough time" is a common mantra for most business owners. Too many demands and expectations from customers, employees, vendors (even consultants), not to mention your own family (who want a piece of your time), can throw off-kilter your well-intentioned New Year's business resolutions (those important "to-do's" you promised yourself in December to get to in January).

Here are some thoughts to leverage yourself better (using yourself to your utmost capability, and better working through and with others) during those high-demand and high "to-do" times, like right now.

1. Share the "water-carrying". Does your business load rest just on your shoulders for you to carry alone, while everyone else is watching or waiting for you? If so, then you are...

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Job Scope in Early Stage Companies

In any startup company, EACH employee MUST wear many hats. In a large company, job specialization is the rule. However, job specialization does not make for a successful startup, as it requires too many people and both the costs and risks would greatly increase with the added levels of people and communication.

It is a well-known fact that there are diminishing returns with each layer and additional employees on any project. This is even more pronounced in knowledge-intensive areas and professional services like software engineering and other knowledge and design-intensive areas.  (Read The Mythical Man-Month). In early-stage and smaller companies, each employee must provide a range of value-added responsibilities that might encompass several jobs at a large company.

Therefore, employee selection in early-stage companies is not only more critical because there are so few people, but also more fraught with danger because each person's "scope", ability and attitudes must be...

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How Do You Grow a Company To $100 Million?

Launching a startup company may be the hardest thing you ever do.  This is a big question with many moving parts and hundreds of things to get right that comes from experience and art, not just black and white answers. However, there are many things that can be easily agreed on that will go a long way to getting you there.  First, let's talk about the stages because it is clear that there are very different skill sets and modes of operation at different stages of the company's development.  Let's call these stages Raw Startup, Early Revenue, and Established.  Raw Startup is the idea development stage, working out of the home or "garage" without a significant burn rate.  Generally, you are spending most of your time developing your plans, researching the market and customers, and defining the product.  You may also develop the actual product, or need to raise funding to accomplish this.  Early Revenue is when you have a product or service...

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Hiring Wisdom Collected From Many Sources

John F. Welch Jr., CEO of General Electric, identifies four types of managers:

1) People who deliver on commitments and share the new values—retain and reward these people;

2) People who don't meet commitments and don't share the new values—these people must go;

3) People who sometimes fail to meet their commitments, but who share the values—give them a second chance;

4) People who meet commitments but don't share the values—they must change or go, because their results aren't worth the price.

 

Southwest Airlines has been successful hiring by the smile.

Power vs. Powerlessness
Powerless Empowered
Create bureaucracy Do the right thing
Are insecure Are self-confident
See "them and us" See "we"
Focus on task Focus on result
Follow rules Take risks
CYA (cover your assets)  
See win/loss issues See win/win issues

Hire consultants for skills. Hire senior people for attitude and ability....

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Giving Toothless Boards Some Bite

Giving Toothless Boards Some Bite

 By Peter Cohen

 

Most directors are stuck in a system that makes it tough for them to protect shareholder interests. The author offers two solutions.

The possibility of directors paying out of their own pockets for corporate misconduct occurring under their watch has been raised by three recent cases. On January, 18 Enron directors agreed to pay $168 million -- 10 of them spent $13 million of their own money -- to settle their portions of securities class-action suits. In February, a deal fell apart that would have had 10 former WorldCom directors settling shareholder lawsuits by paying a total of $54 million -- $18 million from their own pockets, representing 20% of their net worth. And Walt Disney (DIS) shareholders are suing the company's former directors -- demanding they repay a $140 million severance package awarded to Michael Ovitz, who spent an unsuccessful 14 months as the entertainment giant's president. If Disney shareholders...

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When and How to Use Consultants Cost-Effectively

Consultants And Getting The Most Value Added

As a CEO I struggled long and hard over any decision to use a consultant. There are many issues that need to be managed by the client to keep a consultant from going overboard on time and costs.

Too many need to long to get up to speed on your business (on your dime), cost too much, and can not provide tangible results on a limited project basis. Too many are unproductive and do things in ten hours that I know I could have done in 2-3 hours, as paying by the hour is often a de-motivator while paying by the task aligns the client's and consultant's interests more.

All that said, I currently make my living as a consultant and do believe there is a better way.

The old saying that a consultant is someone who you pay to learn your business who then goes down the street to sell that expertise to someone else next week can be true if you let it happen that way. But it does not have to be that way if you use consultants appropriately and as a...

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Fixing Venture Capital

From www.Joelonsoftware.com  

Many software companies these days are built using some form of venture capital. But the VC industry has been hurting lately. A lot of investments in dot-coms turned out to be spectacular flame outs. As a result, VCs are becoming ever more selective about where to put their money. To get funded these days, it's not enough to be a pet shop on the web. Nope! You have to be a pet shop on the web with 802.11b wireless hotspots, or your business plan is going right in the dumpster.

The formerly secretive world of VC has become a bit more transparent, of late. VCs like Joi Ito, Andrew Anker, David Hornik, and Naval Ravikant has created weblogs that are a great source of insight into their thought process. That dotcom thing resulted in three great books by company founders that look deep inside the process of early-stage financing (see footnote). But as I read this stuff, as a founder of a company, I can't help but think that there's something...

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Finding Out What You Don't Know You Don't Know

What gets most early-stage companies in trouble is the areas that they just don't understand, that they don't know enough about.  In other words, the biggest problem is that they don't know what they don't know.  Nearly every failed company will say they ran out of cash, couldn't raise enough capital, or just did not get the sales they expected quickly enough. But these situations are generally the effect, not the cause. Generally speaking,  other problems that the company or entrepreneur does not understand very well are usually the root cause. This situation is actually far more dangerous than just not knowing because you cannot tackle a problem that you do not even know exists.  The best entrepreneurs and CEOs are learning machines and understand what they do not know.  I call this the Prudent CEO or person that appreciates the fact that the last Renaissance man, or woman, existed hundreds of years ago. In this day and age, there is just way too much...

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