Nesheim Online

IS A STARTUP INCUBATOR ACCELERATOR FOR YOU? Some lessons from serial entrepreneurs

The latest startup fad is about "accelerators".

The last generation was dubbed "incubators". The lessons about them, from serial entrepreneurs, is worth thinking about before you choose to go that route for your first enterprise.

The current rush to try using a startup accelerator is well documented.Try reading about it in this Wall Street Journal report: "Start-Ups Crowd Accelerators".

So is an accelerator right for you?

Here are some things to ponder that serial entrepreneurs have learned about startup accelerators:

• They sound great to first-time entrepreneurs. What could be better? Great people instantly welcome you, offer free advice and quick access to real cash. Compared with going it alone, living on your savings for months before getting real money from angels or venture capitalists, that is very attractive. Yet there are some sobering realities to ponder before leaping into an accelerator.
• Their money is expensive. For $12,000 you would be charged 5% to 10% of your startup. That could be worth $2 million of you sell out later for, say $20 million. If you had kept that yourself, it would have gone to you, or you could have used it to attract needed employees.
• The great helpers are busy doing other things. Helpers in accelerators are mostly people wishing they could join the next Facebook. Or they are in the business of selling services such as legal and accounting help. Few have the deep experience the first-timers is eagerly seeking. If you are willing to settle for that level of basic business assistance, then you'll find it at the accelerator. It can be helpful, but it is not from the amazingly talented people pool that you might be expecting to pick from.
• The cash is a drop in the bucket. Your startup can not do much with $10 to $20 thousand of cash. Good technical people are able to find good jobs paying good salaries. Ditto with marketing and business development people. They are looking for full salaries that will use up your accelerator cash in one month.
• You still have the heavy lifting to do. After your initial idea gets scrubbed, worked over, and modified, you still have the hard work to do yourself. It is up to you to execute your first idea and begin the process of transforming it into something very valuable to end users and customers. Your accelerator advisors will be busy with a dozen or so other startups. It is up to you to find the missing people, recruit them (with no money for salaries), and get them working for you. Same goes for developing the product/service, preparing the marketing and so on.
• Other solutions can be free. Advisors and mentors are available who do not work in an accelerator. They include experienced people from the venture community: serial entrepreneurs, lawyers, angel investors, accountants, human resource recruiters, and venture capitalists. I've seen such people welcomed by first-timer entrepreneurs and seen them receive outstanding advice (and they get an offer to return for more) at no cost (stock or cash). Why? Because each knows what it is like to be a first-timer, is willing to contribute advice (as they sought in the beginning) and want to not miss a great idea for a great startup.
• Other solutions can be more useful. Try considering some of these and compare them with an accelerator:
  • Early contact with angel investors often opens a link between first-timer and a very experienced business person. That can lead to a small seed round of financing, with more to follow.
  • Starting with an "advisory meeting" with a great venture capitalist can cement a relationship that leads to a business plan that wealthy private business people finance (often in large public corporations that the venture capitalist financed years earlier).
  • Classes in entreprenership can be found in nearly every school. Taught by experienced people, they cover the basics in depth of what you need to be successful. The cost of the courses are very low and rich in content. Some are online and self-paced.
  • And you can simply spend three months doing "informational interviews" with CEOs and core team members of startups. You'll be amazed at how much you learn listening to them over a cup of coffee or lunch. A few have written books.
  • The nice thing about all of these is that you have not spent any cash or given away any shares.

BOTTOM LINE: "What is my alternative?" is the first question a serial entrepreneur asks him or herself when thinking about doing the next startup. Accelerators have their place in the startup world, but are not the be-all for everyone. To move from idea to clever plan that has a chance to contruct an unfair competitive advantage you'll need a lot more help than can come from an accelerator. Serial entreprenurs know that. So try contacting a few and give your alternatives consideration as you plan your next step.

I wish you The Best on your Adventure!

STARTUP COMPANY CULTURES: Central to becoming the Gorilla of your market

Every great startup -- the ones that become the Gorilla of their jungle -- have CEOs who are passionate about "company culture".

Company culture is so important to serial entrepreneurs that they would rather skip hiring a skilled person if that individual did not fit the company culture.

The startup veterans have learned life is too short to try to do a startup with a lot of people who fight the company culture day after day after day. Every Monday becomes a day to dread and Friday cannot come too soon.

So today I found a real example for you to think about from the Lessons Learned column in Business Investors Daily, Monday, April 30, 2012. A serial entrepreneur says it like it is, in this, his story:

 EXAMPLE

A Tech Entrepreneur Hires People Who Fit The Culture

By MOREY STETTNER Posted 04/27/2012 03:39 PM ET

Entrepreneurs often dream of building a business and selling it for a fortune. Tony Hsieh lived the dream, but it didn't unfold as planned.

Within a year after graduating Harvard in 1995, he co-founded a Web advertising firm called LinkExchange. With Hsieh as chief executive, the startup grew quickly and attracted a large following. In 1998, Microsoft bought LinkExchange for $265 million.

"The real reason we sold the company, which most people don't know, is it was not a fun place to work anymore," said Hsieh, now chief executive of Zappos.com, an online retailer based in Henderson, Nev. "The company culture went downhill. I dreaded getting out of bed to go to my own company."

An early investor in Zappos.com, Hsieh joined the fledgling firm in 2000 as co-CEO. After nearly a decade of fast growth, Hsieh and his team sold the company to Amazon.com (AMZN) for about $1.2 billion.

Unlike his earlier experience selling LinkExchange, Hsieh pursued the Amazon deal with an eye toward preserving the vibrant culture that he and his colleagues had worked to create. The culture remains intact post-acquisition.

Reflecting on his LinkExchange experience, Hsieh admits that he overlooked the importance of fostering esprit de corps as the startup rapidly hit its stride. Managers recruited candidates with technical qualifications but who lacked the right "fun" personality.

"The culture was great at first when we hired friends and friends of friends," recalled Hsieh, author of "Delivering Happiness." "But once we exceeded 15 or 20 people and we had to hire people through resumes and interviews, things changed."

Newcomers didn't necessarily share the same attitudes as the core group who launched the company. Morale started to suffer.

"I should have been more careful about company culture and made sure everyone understood it can go away at the drop of a hat," Hsieh said. "It's easy to take for granted, but over time there's death by 1,000 paper cuts."

At Zappos.com, Hsieh vowed not to repeat his mistake. He says that maintaining the right culture "is the No. 1 priority of the company," and he hires people who embody the organization's values.

Candidates undergo two sets of interviews: one with a manager who assesses their technical prowess and one with a human-resources representative who evaluates cultural fit. Zappos.com has about 4,700 employees. In 2011, the firm hired approximately 1% of its 25,000 job applicants, Hsieh says.

"As long as we hire people whose personal values match our corporate values, you don't need to tell them how to behave," Hsieh added. "They can just be themselves."

BOTTOM LINE: Founder CEOs who want to build great startups will spend huge efforts to build great company cultures. Serial entrepreneurs make that one of their top priorities. They will not hire people who don't fit the company culture, regardless of how smart and talented the candidate is. When you live by that policy, your startup will grow with extra strength, speed and efficiency. Life will be worth living, not hellish. It is part of what makes serial entrepreneurs so successful, it is key to their building an unfair competitive advantage. Learn that and your startup will increase its likelihood of joining their successes.

I wish you The Best on your Adventure!

SPONTANEOUS STARTUPS (PART 2): Learn from a real $300 million example

Spontaneous Startups just happen. Often very well.

Today I'll share an amazing example of a real new enterprise that spontaneously rose from nothing to sales of over $300 million (and climbing).

EXAMPLE

The startup is Wayfair.

Its on-line service sells "everything for the home."

Why don't you know about them? That's part of their story and it's a clever one, filled with excitement, risk and extraordinary success.

I highly recommend you read the well written story (just click on the Wayfair link above) in which the two founders, Niraj Shah and Steve Conine, tell how they moved from startup idea to startup idea until one day they found a very special idea for their new enterprise would become Mayfair. It simply "occurred to them".

As you dissect this amazing saga (it took years and a lot of hard work), keep the following characteristics in mind, they'll help you glean extra value from your thinking, they will generate things to apply to your own startup:

• Stalled with several startups, bailed (wisely) one after the other, until they got The Big Idea.
• Took no venture capital until success was very clear, years after starting.
• Stayed focused, did not get distracted during early formation years.
• Looked and looked and looked for a better idea than the one they had at the moment.
• Techies made the move to marketing savvy as a natural consequence of their processing of ideas.
• Settled on a very simple idea, yet one with huge potential.
• Bold vision: "determined to think big -- really big."
• Flanking Strategy: moved into uncontested territory, a new market not yet dominated by a Gorilla.
• Profitable from Month One.
• Quick to follow successful step after successful step (and to not repeat failures).
• Creative with cash flow management.
• Learned how to do the (retail merchandise) business by doing it.
• Avoided attacking Gorillas.
• Figured out what customers were frustrated with, solved that problem.

I'll leave the rest of the story thinking up to you. Read, think and repeat several times how you analyse this Wayfair story. Each reading offers to you the chance to glean a fine harvest of stimulating ideas for how to do a Spontaneous Startup.

BOTTOM LINE: Wayfair is a find example of how to do a Spontaneous Startup. You can do the same. Study the process the founders went through. That is where the low hanging fruit is waiting for you. When you "get it", you'll know the secrets that made serial entrepreneurs serial winners. And you'll be able to use your idea to build an unfair competitive advantage.

I wish you The Best on your Adventure!

SPONTANEOUS STARTUPS: They just happen (and often do, well)

Spontaneous Startups are a special class of new enterprise.

They are the ones that just happen.

One or two people. No business plan, no MBA, no VC money, no whatever else, just that sudden "Hey, why don't we do XYZ?!" And they go do it. Often very well.

I've recently realized there are a lot of amazing entrepreneurs out there who "didn't have a clue" about what they were getting into. Something triggered in their brain one day and presto! Out came a clever idea that became a clever new enteprise.

They are so fresh and different from the classical venture capital backed startup to IPO model that I had to pause and dwell upon them. Like a breath of fresh Spring air, I found them stimulating and inspiring.

My research has revealed so many of these Spontaneous Startups that I decided today to reflect on them for you and supply a real example to think about.

SPONTANEOUS STARTUP IS

Here is what makes a Spontaneous Startup so special:

• Sudden. There is no gradual effort leading up to the formation of The Idea for the new enterprise. It springs up with a loud "Surprise!"
• Wherever. The Idea can occur anywhere. On a plane, in a classroom or shower, watching television, during a sporting event, even on the job as you work.
• Instantly compelling. The Idea is immediately appealing to the founders who sense it is will also be appealing to many paying customers.
• Personal Product/Service. Sports clothing, baby seats, racing bicycle parts, casual digital games and other ideas resonate naturally with the founders.
• Mostly consumer. Industrial startups can be born as Spontaneous Startups, but most are ideas about selling something to ordinary people (or they are about supplying a product/service free to end users and making money via the classical Internet advertising business model).
• Clever. Something is triggered that jumps out as at least novel, or very new, if not extraordinary.
• No Special Education. While founders of this kind of startup range from high school dropouts to PhDs, the founders appear to include relatively high portion of people with no college education.
• Venture Capital Missing. Founders got started with their own savings, typically in the form of going without salary. They begin work in their homes and rented apartments. Cash is precious.
• Quick Time to Launch First Product. Months rather than years are consumed to get from start to first sales.
• Quick to Profit, Mostly. Most are profitable after a few months of first sales. Exceptions are in Internet centric businesses (e.g. mobile photo sharing: Instagram) which race to be first to get the gorilla share of end users in the new market category.
• Hyper Growth, Mostly. The first product/service catches on and spreads like wildfire, with sales following with the same remarkable growth. Exceptions like Linkedin do seem to require decades to get established before the hyper growth occurs, and thus have to get additional funding from wealthy angels.
• Friends Do It. The founders and early core of employees are friends. They may have worked together, but more are simply social friends, often very close friends.

 EXAMPLE OF A REAL SPONTANEOUS STARTUP

I have a real Spontaneous Startup for you to think about. It was born in Norway and is thriving. It is Onepiece.

Here is their story, from the startup's spontaneous beginning.

Early one Sunday morning in 2007, Henrik, Knut and Thomas, three Norwegians in their twenties, fantasized about the ultimate chill-out wear that would be perfect for a lazy day at home.

They all agreed on the merits of the sweatsuit for recovering from a night on the town. "But without the tight waistband and the pressure to go jogging," Thomas said. Knut had been staring at a light bulb when, eureka, it all became clear:
"Why not sew together a hooded sweatshirt and a pair of sweatpants? Let's make it so big that no one in their right mind would think of working out."
"If we can skip the waistband, I'm all for it," said Thomas. "But how are we going to get into it?"
"No sweat," replied Henrik, "we'll just put in a big zipper."

And with that the OnePiece Jump In was born. The three friends dropped everything and invested all their savings to realize an idea they believed was unique and brilliant. They made the loose-fitting, all-in-one hooded sweatsuits in soft, thick cotton fleece in a wide variety of colours and patterns.

For two years they sold the OnePiece to friends and marketed it to high-school seniors in Norway. Then, in autumn 2009, some bloggers wrote about how much they loved the OnePiece, which triggered other bloggers to rant about how much they hated it. Fuelled by massive debate in social media, the OnePiece Jump in became a huge trend in Scandinavia in 2010, and is now catching on in England and other European countries.

"We were as surprised as anyone when people started wearing the OnePiece at clubs and it became a fashion and lifestyle statement," says Thomas, who has left university to devote all his time and energy to the OnePiece. "I think that the versatility of our jumpsuit and the fact that it is extremely comfortable are the main reasons for its success."

Even as the OnePiece wave hits country after country, gaining a foothold, Knut, Thomas and Henrik are busy developing new ideas and concepts. To be sure, the OnePiece won't be their last innovative fashion item.

BOTTOM LINE: The class of new enterprise known as Spontaneous Startup is large and filled with exciting fresh business ideas. This kind of startup is able to be created by nearly anyone. The specialness of a Spontaneous Startup opens doors for many budding entrepreneurs looking for a way to do a real startup. The ones that succeed seem to be intuitively able to build unfair competitive advantages (which says a lot about the intuitive brains of the founders of this class of startup). Think about a Spontaneous Startup for your own new enterprise. It may be just what you are looking for.

I wish you The Best on your Adventure!

MANAGING A WINNING STARTUP: The importance of "Trust"

"Trust" is critical to a startup.

The core team (typically consisting of a CEO, techie lead and business development head) have to be trustworthy.

Every stakeholder needs to trust the core team.

Employees need to trust the core team.

Investors need to trust the core team.

Customers and end users need to trust the core team.

Strategic partners need to trust the core team.

Yes, it's a very important word, central to building a winning new enterprise.

EMPLOYEES

Those engineers, marketing people and all the rest trust the leadership to provide three things:

• Competence: the core team is able to shape this great startup idea into a winning business.
• Benevolence: the leaders will not rip me off, they will provide fair compensation, challenging yet still reasonable workload, and a justified reward to me.
• Equity: the people at the top will treat me with the same standard as the rest of the employees.

When you get trust working in employees, you the core team are way ahead of the competitors who do not get it right. The top quality stakeholders will seek you out, give you the first opportunity to work with them.

INVESTORS

There is not enough time for experienced investors to closely manage the core team. Whether inexperienced or old bull-headed, core teams have to be trusted to execute a plan that can win. The people with the money just want to be excited cheerleaders.

When you find investors interfering with your daily tasks, beware: the money people may be sensing you are not trustworthy, less able then they thought to pull off the winning startup they put a lot of money into.

CUSTOMERS AND END USERS

You will get the first wave of end users willing to trust you for their first purchase. If they feel let down, you have a problem. If they feel betrayed, you have a crisis.

The same goes for customers (who send you cash).

Both constituencies must trust you.

When they do, they will rave about your product/service, spread the word around the planet via the Internet, recommending your business to many others. That's a big win. It is central to the primary thing Steve Jobs focused on in his quest to build great products that customers loved.

STRATEGIC PARTNERS

Suppliers, channels of distribution, sales outlets, etc. all need to trust you to deliver what your excited speech said. They joined you because they believed in you. Yes, they expect to benefit significantly, but it begins with trust in your ability to execute as you said you would. They expect you to be faithful and true to your word, not suddenly changing allegiances, not violating contracts, not even breaking promises and handshake deals. Complete trustworthiness is what they expect of you and your core team.

ETHICS AND HONESTY

Trust is not bout ethics and honesty alone. Yes, they are two aspects of what all the people cited above expect when trusting you (to be ethical and honest, among other things). But trust is larger than those individual aspects.

BOTTOM LINE: Trust in a startup is central to the entity's value to the many stakeholders who expect to benefit from trusting the leaders of the new enterprise. It is very personal. It is difficult to overcome a lack of trust once it has formed and thus it is vital to not do things that lead to that demise of relationship. When your stakeholders trust you, they will do amazing things for you. They will become part of your unfair advantage. Serial entrepreneurs understand the power of trust. Use it well to build and manage your winning new enterprise.

I wish you The Best on your Adventure!

BURNOUT IS GOOD NEWS AND BAD NEWS FOR ENTREPRENEURS: Lessons from the real world startup trenches

"I am so burned-out!"

"Man, I can't take it anymore, I'm out of here!"

"This is no fun, it's wading through an endless swamp. Time to stop everything."

Those are some of the emotional outbursts I've heard over the years of working with startup leaders. The intense expression of agony and capitulation are very real and not uncommon. They are symptoms that something very serious is going on inside the souls of such human beings.

The term "burnout" is now a real medically classified disease. In less than a quarter of a century it has moved from an obscure term to a word used daily. Attention to burnout has been intense from the professionals as well as amatures. Startup founder CEOs are all too familiar with the term and what it signifies.

STARTUP BURNOUT 

When your new enterprise is so difficult to manage, so disappointing and seemingly beyond the reach of the dreams of success you had at the beginning, your emotions are going to be seriously impacted.

When your emotions become damaged, you and your startup personnel are heading for burnout.

You are highly advised at this stage to see if you and your core team are suffering or headed for burnout.

The diagnostic is easy to do and well validated by MDs from reputed organizations. See the link below for a simple diagnostic test by the Mayo Clinic.

Burnout can affect your entire team of people and when a startup begins to lose key talent to one after the other, it signals deep problems that need immediate attention.

Remedies for burnout in startups call for professional help. Amateurs are not skilled enough to bring about the needed healing. As an MD doctor for help. Licensed professional behaviorists and therapists will come to your aid.

BURNOUT OPENS THE DOOR TO DOING A STARTUP

There is a positive side to burnout.

I've seen winning managers drop out of global corporations due to burnout (e.g. drowning in office politics, 24 x 7 hours managing teams of people in time zones all over the planet, enormous effort to grow sales less than 3 percent a year, endless meetings with no purpose, constant criticism from boss, peers and employees, etc.).

And I've seen such tormented people take a break, get professional help, recover and then do a startup.

Venture capitalists often welcome such talent into their offices as "executives in residence", letting them recover and find a startup to go manage. The individuals are refreshed and welcomed, and bring with them "lessons in the school of hard knocks": "This time I will do it right!"

Others I have seen buy an RV and drive with their wife to visit all 50 States in one year. They return and start looking for a startup to lead.

TOOLS AND TIPS

 A behavioral expert touched base with me yesterday as part of his research into burnout. I told him I had found these to be practical and helpful to company leaders concerned about burnout in their businesses:

Best Summary:
http://www.mayoclinic.com/health/burnout/WL00062

Best Article:
http://www.christianpost.com/news/living-the-simple-life-fighting-job-burnout-54298/

Related Issue:
http://www.mayoclinic.com/health/coping-with-stress/SR00030

BOTTOM LINE: Burnout is real and seriously dangerous, to people and to companies. Startups are not immune, nor fated to end that way. Knowing how to diagnose burnout is a first step. Knowing who to contact for help is the next step. With that knowledge, founder CEOs can stay sensitive to what causes burnout and work their cultures to avoid the disease setting into their startups. People wisdom is part of what makes unfair advantages unfair.

I wish you The Best on your Adventure!

JOHN

SHOULD YOU JOIN A STARTUP NOT YET TO IPO?

"Should I join a startup that is three or more years away from IPO? It is selling its first products, growing quickly and wants me to help open a new market for the startup."

That's essentially the question I addressed yesterday with a business development specialist.

What we talked about can help you make a wise decision when you are faced with such a career decision:

• How large are the odds that this startup can emerge before IPO as the Gorilla of a new space? We dug into the market, competition, and what the company's unfair advantage was composed of. The Conclusion: This startup has what it takes to become First To Get It Right in a New Market Category.
  .
• Is the core team ("top management) able to lead the startup through the next growth phase and get it IPO ready? We dug into the LinkedIn and other readily available material, Googling and reading about each person. The Conclusion: This core team has deep and successful prior experience with high technology product breakthroughs, building new businesses and startups.
  
  
• Are the investors of high quality? This was simple, the About web page touted the names of the VCs and Partners. I knew the firms and of their reputations. The Conclusion: The money comes from among the world's most respected venture firms.
  
  
• Is the cash in the bank sufficient for several years before requiring another VC round? Again this was easy to find on VentureBeat and other Googled sources. The B Round had been completed less than six months ago for a tens of millions of dollars financing. However we still needed to know the burn rate (use of cash per month) to know how long that huge financing would last (the company must build its own factory in order to produce its products with its new proprietary technology). The Conclusion: The cash in the bank is probably good for at least two years, but in the next interviews the candidate will inquire more about this issue. The reason for the sensitivity with this matter is because this candidate has been asked to start opening a new market for the products, one that has a very large order per customer and takes years to close on a deal (currently the startup is selling a lot of high volume, lower priced products to retail product producers).
  
  
• How supportive of your challenging assignment is your boss and his/her boss? We reviewed the reporting ladder, discussed responses about this issue (after his first round of interviews), and speculated on what each of the bosses would want/expect of the candidate. The Conclusion: The right people want very much to have the doors opened for the startup to enter this new market.
  
  
• Is the level of job risk for the candidate reasonable? The candidate explained his contemplation of this issue, what he would be leaving behind (compensation, stock, track record, employer relations, etc.). And his answers to my questions told me he had a reasonbly realistic grasp of the risk he would be taking by terminating a fine employer and moving on to a much more relatively higher risk startup. The Conclusion: The candidate had his head out of the clouds and had removed his rosy glasses, leaving him with a clear understanding of what he was seriously about to do with his career.
  .
  
• Are your dreams of freedom and creativity and joy-filled-living realistic? In this discussion this issue was premature. But it is very important to test before making your decision. Too often escaping from a job and joining a startup is like jumping out of the frying pan and into the fire. Be realistic: startups are a lot of chaos and hard work. And not all founding CEOs are angelic, or what you need to thrive in the new job. The startup's culture may be right for some but hell for you.

There are a lot more questions we discussed, including compenation (cash and stock options), but the above are more important to be sure about.

BOTTOM LINE: Be deliberate about your decision to join a startup. Then you have a chance to make the Big Leap with your eyes open. And remember that the startup you are going to join will look to you to add something important to help the new enterprise build its unfair advantage.

I wish you The Best on your Adventure!

"PROVE IT!!" IS THE NEW STARTUP MANTRA: Back to the Future circa 1970

"Prove it and then we'll consider investing."

"I want to see how the app catches on before I jump ship."

"We will get this thing launched and then figure out how to make it sensational."

Those are comments I've heard often from investors and talented people as 2012 begins to emerge.

To me they signal we have arrived in a fresh startup era, one that reminds me of the "good old days of the 1970s." Back then software startups were getting hot (and got even hotter when the personal computer ushered in the 1980s boom). Investors (not yet dubbed "venture capitalists") were cautious, wanting to see the software running before signing the check. That process launched a wave of successful startups running large applications and new databases. It became a tsunami as the PC followed Apple's arrival.

Central to the process was "Proof of Concept" followed by "First Product Launch". After those two steps, investors signed checks.

Today, I find many two and three man techie teams coding at night and on weekends. Often working remotely from each other, their friendships link them to the focused effort: get this thing up and running, then we'll find some seed money.

The good news for entrepreneurs is that this process opens the door for more ownership (percent). You take the risk for the earliest phase of the new enterprise and thus keep those seed round shares for yourself (e.g. Zuckerberg with Facebook.).

The bad news is that you have to finance the early stage by yourself. That reduces the number of people willing to join you. And it slows development time to market. And it makes it likely that you'll find a lot of competitors emerging the same way.

I'm back from Cornell University where I again saw this phenomena at work. It is here to stay. So plan on it.

BOTTOM LINE: We are in a fresh modification of the traditional process of launching a new enterprise. Investors are expecting to put money into potentially large deals only after they have shown success with an infant product or service. The "success" of the initial launch is what attracts the people with the money. It is tricky to do, partially because you need some friends to join you without being paid. Serial entrepreneurs know how to do this. You can figure it out. So get started, it will be a solid first step on your way to building an unfair competitive advantage.

I wish you The Best on your Adventure!

STARTUP 2012: What style CEO will work best?

"What type of management style works best for a startup?" is a question I'm often asked.

Some of the veterans of new enterprise land have concluded that the best answer is "Whatever style gets the job done."

Unfortunately that's not very helpful, especially to first-time entrepreneurs who are wondering if they have "the style" it takes to be the CEO.

My research tells me that there are as many different startup CEO management styles as there are sports coaches. Both groups compete to win. Both groups are composed of CEOs with vastly different styles of getting the job done (through people, ergo by managing people).

So the first tip today is: Any style of managing opens the door to any person to be a founder CEO. You are not ineligible because you lack "the winning style" because there is no one style that wins.

What distinguishes the CEOs is the company culture they create because of the kind of person they are. CEOs dominate the values of the new enterprise. They hire people with similar values and those people do the same. The result is a collection of startups with vastly different cultures. Google is not Facebook is not Apple is not your Newco startup. In essence the new enterprise mirrors the values of the founder CEO. That means you become the designer of the culture of the startup by just managing via the style that is natural to you.

I'm currently studying the biography of Steve Jobs, picking out elements that get me thinking about management style and startups. I knew Jobs and people close to him over decades, thus the book is less news and more of a way of thinking about management styles for startups. This is one reason I recommend startup people read books to study people.

There was little innovative about management style at Apple. There is at Google. Both are very successful new enterprises. Their founders' values are the primary determinants of how their company's culture is built. And that brands each company forever.

TEST YOUR STYLE

What is your management style?

One refreshingly different way to examine your management style is to see how it measures up with love.

For a definition I use a passage from the Bible:

1 Corinthians 13:4-9

New International Reader's Version (NIRV)

 ⁴ Love is patient. Love is kind. It does not want what belongs to others. It does not brag. It is not proud. ⁵ It is not rude. It does not look out for its own interests. It does not easily become angry. It does not keep track of other people's wrongs.

 ⁶ Love is not happy with evil. But it is full of joy when the truth is spoken. ⁷ It always protects. It always trusts. It always hopes. It never gives up.

 ⁸ Love never fails.

Try asking yourself (and then a good friend) how you are the same or different when using that criteria to measure how you manage people.

Then consider what you might do to alter your managerial style to get even more results.

BOTTOM LINE: Knowing your management style reveals how your startup will build its culture. That will show you what kind of people will be repelled or attracted by your style. It will open you eyes to what you need in people around you, talent required to complete the managerial skill set required to make your new enterprise a success. Serial entrepreneurs know that. It's what they use as the foundation to build their unfair competitive advantage. So can you.

I wish you The Best on your Adventure!

Merry Christmas Entrepreneurs!

Here is my Christmas gift to you: Mary Did You Know?

Wishing you The Best on your Adventure in the coming New Year.